Search Frequenty Asked Questions

Medicare News

To ensure Medicare beneficiaries have access to the latest effective, evidence-based treatments, the Health Care Financing Administration (HCFA) today issued new administrative procedures designed to make the national coverage decision process more open, understandable and predictable.

"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."

Scheduled for publication in the April 27 Federal Register as a notice, the administrative process outlines how the public may request national coverage decisions, time lines for reviewing requests and the roles of HCFA staff, the Medicare Coverage Advisory Committee and technology assessments in national coverage decisions. The notice, which will soon be posted on the Internet at http:\\www.hcfa.gov\quality\8b.htm, also details methods to keep the public informed about the status of coverage reviews and outlines how the agency will reconsider coverage decisions based on new scientific and medical information.

"We have been working for more than a year with representatives of the medical community, beneficiaries and medical-device manufacturers, listening to ideas and discussing how to improve Medicare's national coverage process," said Jeffrey Kang, M.D., director of HCFA's Office of Clinical Standards and Quality. "The end result of this work will be an improved process that will help ensure beneficiaries have access to the latest effective technology."

The Medicare law provides for broad coverage of many medical and health care services, including care provided by hospitals, skilled-nursing facilities, home-health agencies and physicians. Instead of providing an all-inclusive list of items and services covered by Medicare, the Congress gave the Health and Human Services Secretary the authority to decide which specific items and services within these categories can be covered by Medicare.

The law also states that Medicare cannot pay for any items or services that are not "reasonable and necessary" for the diagnosis and treatment of illness or injury. For more than 30 years, the Medicare program has exercised this authority to determine whether specific services that meet one of the broadly defined benefit categories should be covered under the program.

Most Medicare coverage and policy decisions are made locally by HCFA contractors -- the private companies that by law process and pay Medicare claims. HCFA also makes coverage policies that apply nationwide and are binding on all HCFA contractors and administrative law judges.

Under the new administrative process, HCFA will initiate national coverage reviews when appropriate and accept formal requests from external parties for coverage decisions.

The agency typically will initiate a national coverage review when there are conflicting 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, 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 underway, and 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.

Once HCFA determines that a formal external request contains all requested information, the agency will accept the formal request and initiate a series of internal time frames to ensure that requests are processed in a timely manner. HCFA will ordinarily respond in writing to the requestor within 90 calendar days of accepting a complete 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, at a minimum, one of the following:

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

If a referral is made to the Medicare Coverage Advisory Committee, HCFA will ordinarily 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, and an estimate of when the next action will occur. This list will be available on HCFA's web site at www.hcfa.gov and will enable anyone interested in a coverage issue to determine quickly whether an item or service is under review, the current status, anticipated actions and approximate deadlines, as well as the major scientific questions that need to be resolved prior to a coverage decision.

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. A summary of this record will be provided on HCFA's web site. 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.

HCFA's next step to make national coverage decisions more open, predictable and understandable will be to publish a proposed rule explaining the general criteria used to evaluate medical items and services for national coverage decisions. The proposed rule, which is scheduled to be published this summer and will have a public comment period, also will explain the general criteria used to determine whether items and services are reasonable and necessary and the types of evidence needed for a national coverage decision.

Once finalized in regulation, the coverage criteria will serve as a framework to develop sector-specific guidance documents to further explain how the criteria apply to specific health care sectors such as diagnostic devices, durable medical equipment or biologics.