1. CONFIDENTIAL 1 1 Discuss Proposal of Expanding the Definition of Colorectal Cancer Screening to Include Anesthesia and Valuing Services that Include Moderate Sedation for CY2015 PFS (CMS-1612-P)

2. CONFIDENTIAL 2 Objectives Provide additional insights into the increase in the percentage of colonoscopies and upper endoscopy procedures furnished using an anesthesia professional Recommend CMS clarify covered anesthesia services as medically necessary anesthesia services in proposed new definition of screening colonoscopies to include Anesthesia Services (page 186, CMS-1612-P) Recommend CMS gain additional understanding of current approaches when valuing services that include moderate sedation as an inherent part of furnishing the procedure (page 114, CMS-1612-P)

3. CONFIDENTIAL 3 JAMA Study Found Anesthesia Use Grew by 17% Annually 3 Liu H, Waxman DA, Main R, Mattke S. Utilization of Anesthesia Services during Outpatient Endoscopies and Colonoscopies and Associated Spending in 2003-2009. (2012). JAMA, 307(11):1178-1184.

4. CONFIDENTIAL 4 JAMA Study Also found Discretionary Anesthesia Use Doubled in the Medicare Population 4 Liu H, Waxman DA, Main R, Mattke S. Utilization of Anesthesia Services during Outpatient Endoscopies and Colonoscopies and Associated Spending in 2003-2009. (2012). JAMA, 307(11):1178-1184.

5. CONFIDENTIAL 5 Cost of Discretionary Anesthesia in the Medicare Population Almost Doubled from 2003-2009 5 Liu H, Waxman DA, Main R, Mattke S. Utilization of Anesthesia Services during Outpatient Endoscopies and Colonoscopies and Associated Spending in 2003-2009. (2012). JAMA, 307(11):1178-1184.

6. CONFIDENTIAL 6 Clinical Practice Pattern Not Completely Reflects the Standard of Care 1.Current standards indicate moderate sedation is appropriate for diagnostic and uncomplicated therapeutic endoscopies – Delivered by gastroenterologist-nurse team in low-risk patients – Anesthesia professionals not required for low-risk patients 1 2.Increased use of anesthesia professionals has not demonstrated evidence for better patient satisfaction or outcomes 2,3 3.Regional variation in use of anesthesia professionals is correlated with payer requirements for medical necessity – Proportion of procedures with anesthesia coverage in Northeast is 3x that of those in the West 1.Existing MAC Coverage Policy 2.John J. Vargo, Douglas O. Faigel, Paul Niklewski, James Martin, Jeffrey L. Williams, Jennifer L. Holub; Safety and Risk Factors for Procedural Sedation in the 21st Century: a Review of Over 2 Million Patients From 2000-2011, Volume 77, No. 5S : 2013 GASTROINTESTINAL ENDOSCOPY 3.Kilian Friedrich1, Wolfgang Stremmel1, Andreas Sieg; Endoscopist-Administered Propofol Sedation Is Safe – a Prospective Evaluation of 10,000 Patients in an Outpatient Practice

7. CONFIDENTIAL 7 Additional Drivers Behind Growth 4.Patient and gastroenterologist preference for propofol 1,2,3,4 – Current labeling limits use by gastroenterologist-nurse team 5.Advantages for gastroenterologist – Earlier detection and improved screening 5 – Reduce backlog for screening colonoscopy 6 – IV sedation method creates a comfortable experience for some patients 7 1 Koshy G, et al. 2000. Propofol versus midazolam and meperidine for conscious sedation in endoscopy. Am J Gastroenterology; 95:1476-1479; 2 Comparison of propofol and midazolam on psychomotor performance. Horiuchi, DDW Abstract 2006. 3 Quality of psychomotor recovery after propofol sedation for routine endoscopy: a randomized, controlled study. Riphaus, DDW Abstract 2006. 4 Huber DA. 2004. Use of propofol in gastroenterology practice. Gastroenterology Nursing 27(5);242-243 5 AA Website; AGA Supports Increased Access to Colorectal Cancer Screening for All Eligible Individuals; March 8, 2011 6 Cohen et al., Endoscopic Sedation in the US: Results of a Nationwide Survey, 2006 7 Gasparovic, et. al; Comparison of colonoscopies performed under sedation with propofol or with midazolam or without sedation. Acta Med Austriaca 2003; 30:13-16

8. CONFIDENTIAL 8 Therefore, We have Some Concerns Over CMS’s Proposal on Definition of Screening Colonoscopies J&J appreciates CMS review the definition of colonoscopy screening as clinical practices change J&J supports removal of barriers to patients seeking this very important screening procedure J&J strongly recommends waiving deductibles and coinsurance for anesthesia services considered medically necessary for screening colonoscopies – Without the clarification of “medical necessity” may lead to increase in discretionary use of anes

9. CONFIDENTIAL 9 Existing MAC Coverage Policy Includes Languages on Medical Necessity Nordian’s Coverage for Monitored Anesthesia Care (MAC) is allowed if the anesthesia service is medically reasonable and necessary and if the procedure for which MAC is given is itself a Medicare benefit and is medically reasonable and necessary. "The routine assistance of an anesthesiologist for average risk patients undergoing standard upper and lower endoscopic procedures is not warranted and is cost prohibitive.” 1 This position of the gastrointestinal endoscopy community justifies this LMRP/LCD’s position that, to allow payment, MAC for these procedures must be justified by the presence of one of the listed conditions. “ 1. Gastrointestinal Endoscopy, Volume 56, No. 5, 2002, p. 616

10. CONFIDENTIAL 10 Anthem and Empire BCBS Monitored Anesthesia Care is considered medically necessary during gastrointestinal endoscopic procedures when there is documentation by the operating physician or the anesthesiologist that demonstrates any of the following higher risk situations exist.

11. CONFIDENTIAL 11 Valuing Services That Include Moderate Sedation As an Inherent Part of Furnishing the Procedure We support CMS’ goal to improve the payment accuracy for the diagnostic and therapeutic procedures listed in Appendix G of the AMA CPT Listing We support separately valuing the procedure and the provision of sedation where moderate sedation is no longer an inherent part of the procedure Recommendation: – CMS should gain additional understanding of various approaches to delivering moderate sedation and how they differ from each other in terms of resource use

12. CONFIDENTIAL 12 The SEDASYS ® System Approved by the FDA on May 3, 2013 the SEDASYS ® System is an on-label means for trained physician-led teams to provide minimal-to-moderate propofol sedation for colonoscopy and EGD procedures The SEDASYS ® System must only be used in hospitals and/or healthcare facilities where an anesthesia professional is immediately available for assistance or consultation as needed. For complete indications, contraindications, warnings, precautions, adverse events, and additional product information, see Instructions for Use and Essential Product Information.

13. CONFIDENTIAL 13 A Computer-Assisted Personalized Sedation (CAPS) Device The SEDASYS ® System enables physician-led teams to personalize minimal-to-moderate propofol sedation based on individual patient physiology for colonoscopies and EGDs. The SEDASYS ® System integrates physiologic monitoring, automated responsiveness monitoring (ARM), and drug delivery to minimize the risks associated with oversedation. For complete indications, contraindications, warnings, precautions, adverse events, and additional product information, see Instructions for Use and Essential Product Information.

14. CONFIDENTIAL 14 SEDASYS ® System Indications For Use The SEDASYS ® System is indicated for: Administration of 1% (10 mg/mL) propofol emulsion Minimal-to-moderate sedation ASA Physical Status I and II patients Patients undergoing colonoscopy or esophagogastroduodenoscopy (EGD) procedures Patients 18 years of age or older The SEDASYS ® System must only be used in hospitals and/or healthcare facilities where an anesthesia professional is immediately available for assistance or consultation as needed. For complete indications, contraindications, warnings, precautions, adverse events, and additional product information, see Instructions for Use and Essential Product Information.

15. CONFIDENTIAL 15 ASA Guidelines 1 The SEDASYS ® System SpO 2 Pulse Oximeter Respiratory Rate, EtCO 2 Capnometer Heart RateECG, Pulse Oximeter Blood PressureNon Invasive Blood Pressure Level of Consciousness Automated Responsiveness Monitor (ARM) SEDASYS ® System Conforms to ASA Guidelines 1 1 Practice Guidelines for Sedation and Analgesia by Non-Anesthesiologists. An Updated Report by the American Society of Anesthesiologists Task Force on Sedation and Analgesia by Non-Anesthesiologists Anesthesiology 2002; 96:1004–17

16. CONFIDENTIAL 16 Contact Information Steve Phillips Senior Director, Health Policy Johnson and Johnson sphilli7@its.jnj.com Soeren Mattke Senior Scientist; Managing Director, RAND Health Advisory Services; Professor, Pardee RAND Graduate School mattke@rand.org