Approximately 30 companies sell a sacroiliac (SI) fusion implant in the United States. One, SI-BONE, Inc., has received exclusive reimbursement support from Blue Cross Blue Shield and other payers.
SI-BONE’s share of the SI fusion market is about 60%.
Indeed, in what other orthopedic or spinal implant sector does one company enjoy “most favored nation” status among payers? How is that possible?
One answer can be found in the company’s commitment to research and development.
Since 2016, the company has invested an average of $6.8 million per year in research and development. As a publicly traded company, SI-BONE’s value is pegged at around $670 million. Not bad for a company which, most Wall Street analysts expect, will post more than $100 million in sales this year (2022).
The other answer can be found in investor support for management’s strategic, single-minded pursuit of clinical data and courting payors. If this were an MBA case study, it could be titled: Nine Steps to Reimbursement Dominance.
The road to payor exclusivity started with a single retrospective study.
Get started. Even if it is a small and basic study.
Ten years ago, 2012, for SI-BONE, it was a simple retrospective study by a single surgeon at a single site.
The distinctive triangular 3D-printed, cannulated titanium rod (which kind of looked like an unsegmented Toblerone chocolate bar) was a first of its kind. The shape, a triangle, resisted rotational forces better than, say, cylindrical cages or screws. Physicians inserted it over a K-wire, which improved accuracy, and the implant had a bone friendly surface topography.
That first study presented data for 50 patients. Their pain and functional improviement was quick, sustained (12-month) and statistically significant improvement at all post-operative time points. Complication rates were low.
Upwards of 80% of the study patients said they would have the SI joint surgery again.
SI-BONE was doing about 400 cases per month at the time.
Then Pivot to Randomized Control Studies
“Sooner rather than later we were going to need to bring convincing clinical data to both physicians and health plans,” recalls Daniel Cher, M.D., SVP of Clinical and Regulatory Affairs. “We planned carefully and chose high-level clinical designs so that our data would be convincing. We didn’t want to spend $5 million on a trial design that nobody would believe. If that had happened, we would not have gotten anything. We understood that if we had to spend $8 million to do a randomized trial, then we had to do it.”
At the time, iFuse was the first and only MIS (minimally invasive surgery) SI joint treatment option with published peer-reviewed clinical data.
That year, 2014, one of iFuse’s early studies, a 263 patient retrospective comparison study, authored by Arnold Graham Smith, M.D. was accepted for publication. The data covered pain and function after both 12 and 24 months and showed statistically significant improvement.
Also in 2014, a prospective, single-arm, multi-center clinical trial of iFuse released preliminary data and showed that 32 subjects experienced an average 49 point improvement in Visual Analog Scale (VAS) and 15.8 point decrease in Oswestry Disability Index (ODI) at 6 months.
SI-BONE’s CEO Jeffrey Dunn, the company’s founder Mark Reiley and its board were planning multiple randomized control studies, including one or more in Europe. Remembers Jeff Zigler, VP of Market Access and Reimbursement, “Sometimes U.S. physicians are skeptical of data coming from Europe, the Europeans told us they were also skeptical of data coming from the U.S. We had substantial European business, so we decided to do RCT’s (randomized controlled trial) in both the EU and U.S.”
“We found that there was a substantial benefit from doing two randomized clinical trials. (We even did a third trial in the U.S. for physicians who did not want to randomize, but they did want to participate). Having three trials that all showed the same results…a patient level analysis of the pooled results of the three trials was published in 2019…which was very helpful. It gave even the most skeptical commercial payer evidence that the implants effect was long lasting and consistent.”
Major Milestone: 5-Year Data – Promoted Everywhere
The company began commercializing iFuse in 2009 and by 2014, the first group of SI-BONE patients had reached the 5-year postop mark. The Open Orthopaedics Journal published the study, but Dunn and his team made sure payers and users saw the headline and read the outcome data. OTW played a role in amplifying SI-BONE press releases to the broader spine market.
The data covered 15 patients who had returned for X-rays and CT imaging five years postoperatively. Their satisfaction rates, (82% at 12-months) pain improvement (Visual Analog Scale improved from 8.3 baseline to 3.4), functional improvement (ability to perform light, moderate and vigorous activities, a mean Oswestry score of 21.5) were substantially equivalent at 5 years as they were at 12 months.
Dr. Gunnar Andersson, then president of the International Society for the Advancement of Spine Surgery (ISASS) told OTW at the time: “This most recent publication reporting 5-year results provides further clinical evidence that this minimally invasive surgical technique is safe and effective and provides lasting relief for patients who suffer from certain SI joint disorders.”
That same year the current SI-BONE Chief Executive Officer Laura Francis joined the company. “I joined in May 2015. At the time, a new code 27279, had just been put in place by CMS [Centers for Medicare and Medicaid Services] and we felt we were in a great position to take advantage of that. The problem, however, was that there was zero payer coverage of 27279.”
Francis joined the firm as its new chief financial officer (later to become chief operating officer). As she soon realized, payers really did not want to cover new technologies. It would take an extraordinary effort and, from her vantage point as the CFO, an equally extraordinary amount of money, to get that coverage.
“I would really say there was a rallying cry for the business around reimbursement. While we had randomized clinical trial data, even multiple randomized clinical trials in process—one in the U.S. and one in Europe and a significant prospective study, it was still difficult to get commercial payor coverage.”
In contrast to the private payers, Medicare was providing coverage. As Francis remembers, “It took around two years of randomized control data before the commercial payers started to pay attention.”
Go Back to CMS to With Economic Data: Ask for Higher Reimbursement Rates
In 2016, CMS issued its Hospital Outpatient Prospective Payment System (HOPPS) payment recommendation and increased outpatient payment (CPT 27279) 14% to $10,538.
CMS also increased physician reimbursement 25% to $722.
Aside from the obvious (more pay for clinics and doctors) the message coming out of SI-BONE was that this is a vote of confidence based on overwhelming clinical data. Said Michael Mydra, VP of Health Outcomes & Reimbursement at SI-BONE: “With increased reimbursement for both the surgeon and facility, CMS continues to recognize the increasing value of MIS SI joint fusion.”
And then Mydra said this: “The iFuse Implant System fits strategically with the overall goals of the Affordable Care Act (ACA) by providing a safe, effective, and cost beneficial solution for the treatment of low back pain due to degenerative sacroiliitis and SI joint disruption.”
In addition to being “First and Only”, iFuse was now “Cost Effective.” CEO Jeff Dunn, instead of touting more pay for surgeons or clinics, spun the CMS news to show how cost effective the implant and procedure was. “In this challenging reimbursement environment, we believe our clinical and economic data has been a primary driving force in securing reimbursement for iFuse for people suffering from degenerative sacroiliitis and SI joint disruptions.”
Make the Surgeon Societies Your Partner As You Lobby Payors
Within a year, based on the growing body of clinical data, both the North American Spine Society (NASS) and the International Society for the Advancement of Spine Surgeons (ISASS) lobbied CMS and the payer community on behalf of Si joint fusion. Of course, one company had the lion’s share of clinical data—SI-BONE and its triangular implant.
Work the MACs – Hard!
By 2017, Medicare Administrative Contractors (MAC) were starting to issue positive coverage decisions and SI-BONE made sure that the good news came to other payers and surgeons like a steady drumbeat.
The MAC covering the states of Kentucky and Ohio issued a positive local coverage determination (LCD) for MIS SI joint fusion in 2017.
A year earlier, the MAC covering Iowa, Indiana, Kansas, Michigan, Missouri, and Nebraska published a positive local coverage determination (LCD). The MAC covering ten states including Connecticut, Illinois, Massachusetts, Maine, Minnesota, New Hampshire, New York, Rhode Island, Vermont, and Wisconsin issued a draft coverage decision. By the end of 2017, MACs covering 49 out of 50 states and 48 million Medicare beneficiaries were reimbursing SI fusion.
Jeff Zigler explained to OTW , “The MACs really care about data. They’re about patient safety, and they’re about data.”
“It’s only gotten more difficult because now their walls are much higher than they were 5-10 years ago. It’s harder to get a meeting. You have to be that much more differentiated. You can only use the email inboxes they want you to use. You have to be persistent but, most important of all, you have to have ‘the goods’. That means you must know that you have solid clinical data.”
“That’s the real reason we felt empowered to be persistent with the MACs and tell them ‘I would love to introduce you to Dr. Daniel Cher.’ It’s that attitude that ultimately cuts through all the committees and all the different annual review windows and timelines that they’ve set up to slow your progress.”
Leverage Step’s #4-6 to Get Private Payers Moving
Saying: “based on professional societal organizations, literature reviews, in vitro studies, surveys, and cost-effective studies showing success and/or support for treating SIJ [sacroiliac joint] dysfunction with minimally invasive SIJ fusion, including a 2016 retrospective study group of patient surveys greater than 3 years” an independent licensee of the Blue Cross and Blue Shield Association (BCBSA), had issued an EXCLUSIVE positive medical policy determination for iFuse in 2017.
And SI-BONE repeated its most important positioning statement: First and Only. “iFuse is the only SI joint fusion device in the U.S. with peer-reviewed publications detailing evidence from prospective trials, and is the only SI joint fusion device with a FDA-cleared indication citing clinical studies that demonstrate improvements in pain, patient function and quality of life.”
Remind Blue Cross Blue Shield of Long-Term Data FromTheir Customers
On the first day of 2018, SI-BONE marked an historic milestone when Blue Cross Blue Shield Association upgraded their assessment of SI-BONE’s unique triangular shaped implant for sacroiliac (SI) joint fusion to “Moderate” quality evidence recommendation.
The announcement was a significant shift in how private payer healthcare insurance companies viewed new technologies and sent a clear signal that new products needed level 1, RCT, long-term clinical evidence in order to be covered.
SI-BONE’s Joe Powers, VP of Corporate Marketing, said it best: “Over the past six years, we have invested substantially in multiple clinical trials that demonstrate that our patented triangular iFuse Implant, which we launched commercially in 2009, provides long term pain relief and improvement in patient function and quality of life. Through our extensive efforts and investment in evidence, we have established that among SI joint products and therapies, only iFuse has sufficient evidence to obtain a positive evaluation by BCBSA.”
BCBSA issued a statement saying, in part: “The evidence used to develop the upgraded assessment was developed exclusively using the patented triangular iFuse Implants, which have been commercially available since 2009.”
And, then, BCBSA pointedly REFUSED coverage for corticosteroid injections, radiofrequency ablation or cylindrical threaded implants—all competing therapies for SI Joint pain.
SI-BONE’s Daniel Cher, M.D. reminded surgeons that “the SI joint has been under-diagnosed and under-treated for decades and our philosophy has been to take a high level scientific approach, including well-designed and well-executed clinical studies so that the data from these studies could stand on their own for educational, clinical and patient purposes.”
Laura Francis’s job at the time was CFO so she was looking at the rate of spending with a critical eye and thought about baseline scenarios, worst case scenarios and best case scenarios. As she recalls; “Jeff [Zigler] was assuring me, ‘We should be able to get exclusivity and here’s why.’ He kept saying, ‘Laura, we’re going to get exclusivity.’ And I said, ‘I hope we do, I hope we do, but I’m not planning for it.’ It was January 1, 2018, when Blue Cross Blue Shield Association put together a recommendation for minimally invasive SI joint fusion and it was exclusive to triangular titanium implants.”
Add Humana: Ask for Another Reimbursement Bump
On December 10, 2020, the fifth largest U.S. insurer, Humana, Inc. decided to reimburse SI-BONE’s iFuse triangular implant for sacroiliac (SI) joint fusion (SIJF)—exclusively.
CMS also increased SI joint fusion reimbursement by over 25% as of January 1, 2020.
President, CEO, and Chairman Jeffrey Dunn was careful to tie it all in with the major spine societies. “We are thrilled with Humana’s decision to cover MIS SI joint fusion procedures that use iFuse for its members, and with clinical criteria that aligns closely with guidelines from professional spine societies like NASS [North American Spine Society] and ISASS [International Society for the Advancement of Spine Surgery].,”
Humana joined 36 other health plans that cover MIS SI joint fusion using the iFuse Implant System exclusively. The other payers, UnitedHealthcare, CIGNA and Aetna, offered positive but inconsistent and non-exclusive.
Lessons Learned
Today, more than 23 commercial health plans have published exclusive positive coverage policies for SI-BONE’s triangular iFuse Implant System, including the two largest, UnitedHealthcare and Anthem—representing more than 35 million health plan members. There are maybe 9-10 million covered lives still without a stated coverage policy.
It seems almost inevitable now. But looking back, it was touch and go. As SI-BONE’s current CEO Laura Francis recalls during her tenure as the CFO: ”When I came into SI-BONE, it was a tricky time in terms of financing and it took longer than anticipated to get reimbursement coverage. Anthem didn’t cover minimally invasive SI joint fusion until July 30, 2021. It was seven years AFTER we started our randomized clinical trial and 5-year data was available. It took them that long and then, interestingly, they made an exclusive decision as well.”
Francis’s advice to other medical device companies: “You have to make these decisions very early on in the company and you have to understand that it is at least going to take 3-4 years to get traction. Then it may take as many as 7-10 years in order to fully see the impact of all these investments. You have to be thinking about it long-term.”
The Importance of Board Members and Investor Experience
One of SI-BONE’s key advantages was board of director and investor support. Recalls CEO Francis: “In the early days, around 2015 and 2016, SI-BONE’s investors were key decision makers. One board member, John Freund, M.D. from Skyline Ventures, our first lead investor, was a leader in terms of backing the decision to invest heavily into level 1 clinical research data.”
The flip side of that, of course, is that the founders of SI-BONE, Mark Reiley and Jeff Dunn, did a good job recruiting like-minded investors who put their money behind differentiating the business through level 1 clinical data.
