Medicare plans to open up coverage decision making

HCFA creating formal review procedures

The Health Care Financing Administration says it intends to open up the process of deciding which treatments will be covered by Medicare.

Under the newly announced procedures, there will be more input from the public into agency decisions on whether to cover certain medical treatments under the Medicare fee-for-service program.

A major reason for the new process is to help unravel Medicare carriers’ conflicting policies on which procedures will be paid for and settle disagreements about effectiveness of a treatment. HCFA estimates blanket national payment policies apply to just 10% of the coverage decisions made each year. Local carriers rely on their own internal policies to make the other 90% of pay-out calls.

One area of conflict HCFA is expected to quickly address involves contradictory carrier positions on preoperative evaluations needed to clear patients for surgery. Differences often result in patients either paying these costs themselves or failing to receive medically necessary surgical procedures.

"This will be the most open and accountable process for making national coverage decisions in the history of Medicare," HCFA administrator Nancy-Ann DeParle said. "Creating an understandable and predictable process for national coverage decisions is a critical step in preparing Medicare for the 21st century."

"Reform of the Medicare coverage decision process is long overdue," says American Medical Association spokesman William G. Plested III, MD.

"HCFA’s reluctance to separate its policies on coverage from its policies on fraud and abuse is a major source of the coverage policy problem facing Medicare patients and their physicians," said Plested. "This conflict must be resolved if patients and physicians are to have confidence in the overall integrity of the Medicare program."

National review procedures to be instituted

Under the new process, HCFA will initiate national coverage reviews when appropriate and will field formal requests from external parties for coverage decisions. Under the proposed process, HCFA generally will initiate a national coverage review when:

    — there are conflicts between local contractor coverage policies;
    — a service represents a significant medical advance and no similar service is covered by Medicare;
    — there is substantial disagreement among medical experts about a service’s efficacy or medical effectiveness, or the service is currently covered but is widely considered ineffective or obsolete.

Formal external requests for a national coverage decision must be in writing and must contain:

    — a complete description of the item or service in question;
    — a compilation of the medical and scientific information currently available;
    — a description of any clinical trials or studies currently under way. In the case of a drug, device, or service using a drug or device regulated by the Food and Drug Administration (FDA), the status of FDA administrative proceedings must be included.

Once HCFA determines that a formal external request contains all necessary information, the agency will initiate a series of internal deadlines to ensure that requests are processed in a timely manner.

HCFA said it expects to respond to the requestor in writing within 90 calendar days of accepting a request. If the requestor submits additional medical and scientific information during this 90-day period, however, the agency will ordinarily respond within 90 calendar days of receiving the additional information. The response will include one of the following:

    — national coverage decision without limitations on coverage;
    — national coverage decision with limitations on coverage;
    — no national coverage decision, which allows for local contractor discretion;
    — national noncoverage decision, which precludes local contractors from making payment for the item or service;
    — referral to the Medicare Coverage Advisory Committee;
    — referral for a technology assessment;
    — decision that the request duplicates another pending request and will be combined with the other request;
    — decision that the request duplicated an earlier request that has already been decided and there is insufficient new evidence to reconsider the request.

Decision process summaries to be published

If a referral is made to the Medicare Coverage Advisory Committee, HCFA ordinarily will make a decision within 60 days of receiving the committee’s recommendation. If a technology assessment is required, the time line for HCFA’s coverage decision will be extended, but the agency does not expect that technology assessments would normally take longer than 12 months to complete.

Throughout the coverage decision process, HCFA will publish a list of coverage issues under review, the stage of review each issue is in, an estimate of when the next action will occur, and the major scientific questions that need to be resolved. HCFA also will develop a record for each coverage decision, including a list of all evidence reviewed, all the major steps taken in the coverage review, and the rationale for the coverage decision. The list of issues under review and a summary of the record of coverage decisions will be provided on HCFA’s Web site at www.hcfa. gov. Additionally, HCFA will reconsider coverage decisions at any time when new medical and scientific information becomes available or the requestor can demonstrate that HCFA materially misinterpreted the evidence submitted with the original request.