New Process for Seeking Medicare National Coverage Determinations | (PDF version, 114 KB)

Rebecca L. Burke
October 16, 2003

The Centers for Medicare and Medicaid Services ("CMS") recently published new policies and procedures which describe how the agency will make national coverage determinations ("NCDs"). The CMS Notice, published in the September 26, 2003 Federal Register, takes effect October 27, 2003.

I. OVERVIEW

An NCD is a determination by CMS that a specific item or service is or is not covered by Medicare. It may also set forth specific conditions or limitations on coverage. NCDs are binding on all Medicare contractors and no local coverage policy may be inconsistent with an NCD. If an NCD expands Medicare coverage, it is also binding on Medicare+Choice Plans.

The CMS Notice sets out the policies, procedures and schedule CMS will follow in making NCDs. It lays out clear ground rules for how to request an NCD, the nature of the supporting evidence that should accompany a request, and the process CMS will follow in handling a request. The NCD Notice applies equally to devices, procedures, treatments, and diagnostic services and should be very useful to those seeking to obtain Medicare coverage for new technologies or treatments.

The Notice describes two tracks available to parties seeking an NCD: Track 1 is available to anyone requesting an NCD and describes a more collaborative process without strict adherence to time deadlines. The second track is available only to "aggrieved parties" - Medicare beneficiaries who are in need of the items or services for which an NCD is requested. Under this track, CMS is required to make a decision within 90 days.

An NCD cannot be appealed to an administrative law judge. However, an aggrieved party can obtain review of an NCD by the Health and Human Services Departmental Appeals Board. In addition, any party may request reconsideration of an NCD.

II. BACKGROUND ON MEDICARE COVERAGE PRINCIPLES

In order for a given item or service to be covered by Medicare it must: (1) fit into a statutory benefit category; (2) not be specifically excluded from coverage; and (3) be "reasonable and necessary" for the treatment or diagnosis of disease. The Medicare Act does not list specific items or services that are covered by Medicare. Instead, it lists categories of items or services and gives CMS the discretion to make determinations about specific items or services within each category. Thus, for example, the Medicare statute includes coverage for durable medical equipment ("DME") but does not list which items of DME are covered.

The decision as to which specific DME items will be covered by Medicare is generally made in one of two ways; either by local Medicare carriers or intermediaries in the form of a local coverage determination ("LCD"); or by CMS through an NCD. Once CMS has issued an NCD for a particular item or service it must be followed by all carriers and intermediaries and supersedes any inconsistent LCDs. An NCD does not address how an item or service should be coded; nor does it establish the amount of payment.

The fact that a device or drug has been approved by the Food and Drug Administration ("FDA") does not mean it will be covered by Medicare. However, with the exception of certain Category B investigational device exemption ("IDE") devices, FDA approval is generally a prerequisite to Medicare coverage.

III. NEW CMS PROCESS FOR MAKING NATIONAL COVERAGE DETERMINATIONS

A. General

The CMS Notice establishes two formal tracks for obtaining an NCD. Track 1 is open to anyone, including, for example, manufacturers or distributors of a new technology or practitioners who want to incorporate the new technology in their clinical practice. This track is less time-stringent and allows for a more flexible and collaborative process.

Track 2 is only available to "aggrieved parties," defined as Medicare beneficiaries who are in need of the item or service that is the subject of the NCD request. This track, which was mandated by the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 ("BIPA"), obligates the agency to make a determination within 90 days.

An initial request for an NCD may not be made if CMS has already issued an NCD for the item or service; however, a party may request reconsideration of the NCD (described below).

B. Requesting an NCD

All requests for an NCD must begin with a "complete, formal initial request." This is defined to include:

a written letter identified as a "formal request for an NCD";
a statement of the track under which the requester is submitting the request (i.e., Track 1 or Track 2);
a statement as to the benefit category of the Medicare program to which the requester believes the item or service applies (e.g., DME, physician service);
a complete description of the item or service in question;
a detailed description of the proposed use of the item or service, including the target Medicare population and specific medical conditions for which it can be used;
a compilation of supporting medical and scientific information showing the medical benefit of the item or service;
if FDA approval is pending, a copy of the "integrated summary" of the safety and effectiveness data from the FDA application;
an explanation of the design, purpose and method of using the item or service, including whether it is for use by health care practitioners or patients;
an explanation of the relevance of the evidence selected; rationale for how evidence selected demonstrates medical benefits for the target Medicare population; information on the magnitude of the medical benefit, and rationale for how coverage will be beneficial to target population;
a description of any relevant clinical trials or studies currently underway;
if the item is a drug or device, information involving use of the drug or device subject to the FDA regulation, and the status of the FDA's regulatory review, including labeling;
in the case of a device eligible for 510(k) clearance by the FDA, identification of the predicate device.

The entire request must be submitted to CMS electronically. If the request is accepted, the agency notifies the requester and also posts the acceptance on the agency website under the list of pending NCDs. Requests may be assigned a priority by CMS based on importance of the request to the Medicare population. A public priority list is maintained on the CMS website and requesters can review it to verify whether their request has been accepted and the status of the request. In addition, the request is given a tracking sheet which allows the public to review the issue and monitor the progress of the NCD process. (CMS' current NCD web address is http://cms.hhs.gov/coverage/default.asp.) If the request is not complete in any way, the requester is notified that the request has not been accepted and the reasons for rejection.

C. Review of the NCD Request by CMS

1. Track 1: All Requesters

Any party may request an NCD under Track 1. Once the request is accepted, a 30-day public comment period begins during which submission of evidence or comments by the public is accepted. After close of the public comment period, CMS researches and evaluates the NCD request. Under Track 1, this process can be collaborative and, although CMS tries to issue a decision memorandum within 90 days, this time frame may not be adhered to strictly. During this process, the requester may be asked or permitted to provide additional information, clarify issues and engage in a dialog with CMS.

A decision memorandum sets forth the agency's decision and rationale, and summarizes the evidence considered, but is not the actual NCD. The NCD is the formal instruction from CMS to its contractors instructing them to implement the NCD through their claims processing systems and is typically issued several weeks or months after the decision memorandum. CMS has provided, in the Notice, that the NCD will take effect no later than 180 days after the first day of the next full calendar quarter that follows the date of the decision memorandum. Consequently, it is possible that the implementation of the NCD can take up to 270 days from the date of receipt of the formal request and even longer if the request is referred to the Medicare Coverage Advisory Committee ("MCAC") or referred for a Health Technology Assessment ("HTA").

In the decision memorandum CMS will outline one of three actions:

Its intent to issue an NCD, with or without limitations;
Its intent to issue a national noncoverage decision; or
A determination that an NCD or a noncoverage determination is not appropriate at the present time.

Where CMS elects not to issue a decision, local coverage policies govern.

a. MCAC Review

During the review process, CMS may decide that the issue should be reviewed by the MCAC. The MCAC is a committee of individuals with medical and scientific expertise in a broad range of areas. MCAC members are selected by CMS from individuals nominated by the public and from medical and scientific organizations. The MCAC also includes non-voting representatives of industry and the public.

CMS will refer an NCD request to the MCAC if coverage is the subject of controversy or if it has the potential to have a major impact on a target population of the Medicare program. For example, CMS recently sought MCAC review in connection with its NCD on the intra-cardiac defibrillator ("ICD") and the ventricular assist device ("VAD") because coverage had potentially profound ramifications for the target Medicare population as well as potentially significant financial repercussions for the Medicare program.

When an NCD request is referred to the MCAC, a public meeting is held to discuss the coverage issue. Notice of the meeting is published in the Federal Register and interested parties, including the requester of the NCD, are permitted to attend and address the MCAC. After reviewing an issue, the MCAC makes recommendations to CMS which are advisory only. CMS is not obligated to follow the recommendations although it usually does. Once CMS receives MCAC recommendations, it attempts to issue a decision memorandum within 60 days. Thus, MCAC review can substantially increase the time it takes CMS to issue a decision on an NCD request.

b. Health Technology Assessments

A Health Technology Assessment or HTA is an independent analysis of the scientific and clinical evidence surrounding a particular item or service and is used by CMS when the scientific literature is complex or conflicting. The HTA is performed by the Agency for Healthcare Research and Quality or a third party under contract. Sometimes an HTA is requested prior to review by the MCAC.

2. Track 2 - Aggrieved Parties

Track 2 is only available to Medicare beneficiaries with a need for the item or service in question. Under Track 2, CMS strictly adheres to the 90-day clock. Consequently, there is little or no opportunity for collaboration or dialog. At the end of the 90 days, CMS issues a decision memorandum and an NCD with an effective date.

3. CMS Generated Requests

CMS can generate a request for an NCD itself if it believes it would be in the interest of the health and safety of Medicare beneficiaries to do so. The review process is similar to the process described in Tracks 1 and 2 above.

D. Requesting Reconsideration of an NCD

A party may request reconsideration of an NCD at any time after its issuance. CMS will consider a request for reconsideration in one of two circumstances:

The requester presents documentation of material medical or scientific information not considered during the initial review that results from new clinical trails, new scientific literature or new studies;
The requester presents arguments that the existing NCD materially misinterpreted the existing evidence at the time the NCD was made.

A reconsideration request might be appropriate, for example, where there is new evidence that a technology or treatment may be effective for a new indication. To seek reconsideration, a party must present a formal request for reconsideration accompanied by the same materials and documentation described above for an initial request. The reconsideration process is a collaborative one and offers parties an opportunity for clarification and dialogue.

E. Challenging an NCD Under BIPA

Under BIPA, an aggrieved party (i.e., a Medicare beneficiary with a need for the item or service in question) may challenge an existing NCD. This is distinct from a request for reconsideration. A challenge to an NCD entitles the party to review of the decision by the Departmental Appeals Board. CMS issued a proposed rule governing this process last August; no final rule has been published to date.

IV. SUMMARY

The NCD Notice provides a clear framework for parties to follow in seeking an NCD. However, in assessing whether to request an NCD, parties must carefully consider the strength of the available medical and scientific evidence as well as the existing coverage status of the item or service. In addition, careful consideration should be given to the benefit category under which the item or service will be categorized since this could affect how the product will be paid for and the amount of payment. If you have questions about the NCD process or would like assistance in submitting an NCD request, please contact Rebecca Burke at the above number.