MEDICARE COVERAGE
DECISIONS
Balancing Competing
Demands
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AGENDA
National Coverage
Determinations
Factors Influencing
NCDs
Local Coverage
Determinations
NCD/LCD Effects on
Commercial Payors
─ Steve Phurrough
─ Peter Neumann
─ Susan Foote
─ James Cross
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MEDICARE NATIONAL
COVERAGE
DETERMINATIONS
Steve Phurrough MD, MPA
Director, Coverage and Analysis Group
Centers for Medicare and Medicaid
Services
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Steps to Develop Medicare
Reimbursement
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2.
3.
4.
5.
Regulatory approval (FDA)
Benefit category determination (Congress)
Coverage (CMS/CAG)
Coding (CMS/CMM)
Payment (CMS/CMM)
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NCD Authority
Social Security Act 1871(a)(2):
No rule, requirement, or other statement of policy
(other than a national coverage determination) that
establishes or changes a substantive legal standard
governing the scope of benefits, the payment for
services, or the eligibility of individuals, entities, or
organizations to furnish or receive services or benefits
under this title shall take effect unless it is
promulgated by the Secretary by regulation
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Benefit Category Determination
• SSA 1861: Congress determines the
services that CMS covers
• Examples:
– Hospital services
– Physician services
– Colorectal cancer screening
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Coverage
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CMS’s Legal Authority for
Coverage
Section 1862(a)(1)(A)
No reimbursement for item or service,
“which, except for items and services
described in a succeeding subparagraph, are
not reasonable and necessary for the
diagnosis and treatment of illness or injury
or to improve the function of a malformed
body member,”
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Most Coverage is Local
National
10%
Local
National
Local
90%
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MEDICARE NATIONAL COVERAGE PROCESS
Preliminary
Discussions
Benefit
Category
National
Coverage
Request
Reconsideration
6 months
Internal
Technology
Assessment
30 days
Draft
Decision
Memorandum
Posted
External
Technology
Assessment
Medicare
Coverage
Advisory
Committee
Staff
Review
60 days
Public
Comments
Final Decision
Memorandum
and
Implementation
Instructions
Department
Appeals
Board
10
9 months
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What prompts NCDs?
• External request
– Current national non-coverage policy
– Substantial LCD variation
• Internally generated
– Extensive literature or important new study
– Technological advance with potential major
clinical or economic impact
– Concerns about major inappropriate use
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How Do We Apply R&N Today?
• Sufficient level of confidence that evidence
is adequate to conclude that the item or
service:
– improves net health outcomes
– generalizable to the Medicare population
– generalizable to general provider community
• Evidence assessed using standard principles
of evidence-based medicine (EBM)
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EBM: Definition
“...Evidence-based medicine de-emphasizes intuition,
unsystematic clinical experience, and pathophysiologic
rationale as sufficient grounds for clinical decision making
and stresses the examination of evidence from clinical
research.”
Evidence-Based Medicine Working Group, JAMA (1992)
Why base coverage on EBM?
• Lower quality studies are more likely to be wrong
– e.g. HRT and heart disease, ABMT for breast cancer
• Deductions from basic biology and pathophysiology
may be unreliable
• Avoid promoting things with possible harm
• If something doesn’t work, we should not spend money
on it, even if it is not harmful
• Concentrate resources on things that improve health
• Physicians and patients can make informed choices
about treatment
• Allows open, explicit, consistent coverage decisions 14
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Generalizable
• Medicare population
• Diffusion outside trial providers
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National Decisions
• National Coverage
• National Noncoverage
• No National Coverage Decision
– left to contractor discretion
• Coverage in data collection systems
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Coverage in data collection
systems: core concept
• Links coverage with prospective data collection
• Extends concept of medical necessity
– Adequate evidence of benefit
– Adequate evidence of potential value and provided in
appropriately designed study
• i.e. “promising, important, potentially high value, and
under careful investigation”
• Retains EBM as conceptual framework for coverage
and payment
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Objectives
• Goal is to promote innovation while obtaining value in
health care
• Prompt coverage serves to speed access to promising
new technology
• Promote promising, potential high value services
• Studies can improve evidence available to patients,
clinicians, policymakers
• Hope to better target treatments to subpopulations with
greatest benefit
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Contact Information
Steve Phurrough
SPhurrough@cms.hhs.gov
410-786-2281
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