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PROBLEM: Added cost for medical patients with treatment resistant major depression SOLUTION: Transcranial magnetic stimulation?

December 04, 2013

Transcranial Magnetic Stimulation (TMS) may be the best way to help patients with treatment-resistant major depression (TRMD) – people who have tried antidepressants at least once for the appropriate amount of time on the appropriate dose, according to Pete Mumma, Administrative Director of the Behavioral Health Service Line in the Department of Psychiatry at Lancaster General Health in Lancaster, Pennsylvania. But that doesn’t mean it’s easy to “sell” the TMS device to financial people in your institution.

Here’s how Mumma did it: 9.1 percent of the population has depression, and .05 percent has TRMD. These people are “superutilizers,” who consume 18 percent of a health system’s uncompensated or undercompensated spending. “It’s unsustainable,” he said. “We expect people who have extreme needs to be treated in pathway models that don’t meet their needs – what will we do with these patients, not just from a mental health perspective, but from a total medical perspective?”

For example, an individual with TRMD who also has cardiac disease or cancer is going to be very complicated to treat. “Any medical provider who is helping patients with TRMD is going to bump up against some or all of their issues,” said Mumma. Symptoms such as lack of energy, lack of concentration, and sleep problems create further distractions for the patient, he said. The recommendations of the cardiologist or oncologist won’t go as far as they would if the patient didn’t have depression.

The impact of mental health problems on physical treatment is more relevant now than it was in the past because of the way health systems are being reimbursed, said Mumma, citing in particular the penalty for readmissions within 30 days. If a patient fails cardiac treatment – perhaps because he didn’t exercise, something that is notably difficult for people with depression – and needs to be readmitted, that’s a ding to the hospital’s bottom line. “So cardiologists and every other doctor wants to make sure they eliminate barriers to good outcomes,” he said. Mental problems that make it difficult to follow through with physician recommendations are suddenly seen as very important – a good thing for both patients and the health care system.

“We can spend a little money up front to treat the depression, and the patient’s cardiac care goes farther, faster,” said Mumma.

The treatment

Typically, patients start with a daily course of treatment, which takes about 37 minutes. This would go on for four to six weeks. The treatment is painless and requires no sedation. Once the initial course is done, some patients may come back every three months, said Mumma.

While Mumma can’t give Lancaster cost data, he did share information about the average cost of a session – $300 to $350 per session for a cash patient, five days a week for four to six weeks. That totals a minimum of $6,000 and a maximum of $10,500. What insurance companies and Medicare pay may be less. Providers who look at TMS as a profit center usually don’t deal with insurance, but just cash patients, said Mumma.


What really excited the Lancaster board was the prospect of saving money on the superutilizers who have TRMD by using TMS, said Mumma. Treating the really sick who are typically covered by Medicare – not the best payer as it is – is challenging. “If Medicare doesn’t cover the costs, how can we support TMS for that population?” asked Mumma. “The obvious answer to me is to ask how much we can save Medicare if we were to treat the sickest of the sick. Could we invite them to be more compliant or alliant with treatment through the lifting of major depression? Could we reduce obesity, diabetes, the silent killers?”

Many of these patients use the emergency room two to three times a week because they don’t live near a primary care center, or because their primary care provider doesn’t take Medicare, he said. They tend to call 911 because they can’t drive themselves.

But TMS as being used by Lancaster is not a money-maker – it’s a money-saver. Medicare now does have TMS on the fee schedule in many regions, said Mumma. “Frankly, the fee schedule is neutral to the cost,” he said. “We’re not making money on TMS at the Medicare rate.”


The first line of treatment for depression is medication, but people with TRMD are patients for whom medication isn’t working. On the system side, the clinical benefit is important, but on the patient side, it’s crucial. “The tragic thing is these patients aren’t getting better,” said Mumma of TRMD.

Doing depression care differently – what Mumma is suggesting is avoiding the “shotgun approach” that most depression patients who have tried one medication after another have experienced. At Lancaster, before selecting a medication, the psychiatry department does “pharmacogenetic” testing via a cheek swab to at least narrow down the type of medication to try in the first place. “But many patients get agent after agent, and have had no other options over their lifetime.” Now, at least patients who have failed one course of medication with an appropriate dose and duration have another option.

“Through medications, we’re trying to light up some parts of the brain and quiet others,” said Mumma. That’s the same thing that TMS does – the magnet near the head “reaches deep into the amygdala, which scientists think is responsible for mood,” he said. “Instead of washing the brain with chemicals, this seems to isolate the problem.” Many patients continue to take medications while getting TMS but find they can reduce their medications over time, he added.

Another issue is the cost of medications. Abilify, the medication used for treatment-resistant major depression, is very expensive, said Mumma. “The health plan might be paying more than $1,000 per month” for Abilify, he said. “Add to that the costs of Celexa or other medications, plus the medication management.”

Tracking medical costs

TMS is non-medication based treatment, so there are no drug-drug interactions. But it is expensive, and by itself it can unbalance what is supposed to be a cost-saving device. So at Lancaster, officials are looking at the population health impact in various ways – for example, they will be conducting a 12-month lookback to see if costs were reduced for these patients. However, the unfortunate reality is that much of this data is impossible to get to, said Mumma. The best way to find out would be to track medical costs for Lancaster’s own employees, to see if those who use TMS have lower costs. (Like most hospitals, Lancaster General is self-insured.)

Mumma also has scrutinized the literature, finding that one study showed that the most costly expense to employers was depression, at a cost of more than $350,000 per thousand employees. That isn’t only medical costs, of course, but aggregated costs of medical treatment, pharmacy, absenteeism, and “presenteeism” – in which employees are still at work but unable to function. “If we were to do depression care differently, that’s a huge savings,” said Mumma.

Proving it works by billing insurance

At Lancaster, TMS is only used as indicated – for TRMD – but some physicans are using it off-label for various conditions, said Mumma. Providers can’t bill insurance for off–label uses, but many providers do cash-pay only. Mumma thinks this could be a mistake. “The challenge is that this treatment is so effective, with anecdotal as well as statistical reports, but we won’t see the real benefit until major medical and psychiatric insurance companies realize that by spending a little more on TMS, we are going to reduce the overall costs.”

Mumma wants to differentiate the TMS provided by Lancaster from the “boutique” plans. “We don’t take cash, we put everything through insurance,” he said.

Asked how much Lancaster paid for its TMS equipment, which is made by Neuronetics (the owner of the technology), Mumma demurred. He also was not able to say how much Lancaster charges for the treatment, although he did say it is not a being used as a profit center, but rather as a way to decreases cost for these patients.

Lancaster started offering TMS at the end of August. In mid-November when we interviewed Mumma, there were six patients in active treatment – at 37 minutes a day per patient, not including checking in and checking out, that’s about the most they can have. So far, four patients have graduated into the maintenance phase. An additional 16 are in various stages of the preauthorization process with insurance.

Once insurance companies recognize that TMS can help them save money they would spend elsewhere on these patients, they will be even more supportive of it, said Mumma.

Patients paying

Some researchers are looking at TMS for other conditions, and patients are sometimes so desperate for improvement that they are putting their own money into it, said Mumma. “Shame on the system for making that happen,” he said, adding that there are positive anecdotal results from patients with autism, PTSD, and other conditions.

In clinical trials, suicidality was four times higher in the placebo group than the TMS group, said Mumma. (In the clinical trials, TMS was compared to sham TMS, not compared to medication.)

Major depression is a devastating disease for people who don’t get better, and 40 percent of the patients experience remission, said Mumma, who is not compensated by Neuronetics.

The big question is whether TMS is going to be as effective as electroconvulsive therapy (ECT), said Mumma. Clearly TMS is much more appealing to patients. “ECT is scary as hell, and it has ugly side effects like memory loss,” he said. ECT is effective, but many studies are showing comparable results for people with TMS, said Mumma.

“Nobody’s using the word, ‘cure,’” said Mumma. But TMS is different from medications, he said. “It’s difficult to get off of antidepressants once you get on, and antidepressants are basically a band-aid for a problem – just symptom improvement, not managing the illness.”  TMS does allow patients to return to functionality with fewer side effects than medication, said Mumma.

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