GOVERNMENT & MEDICINE

Doctors urge national standards for Medicare carriers

The AMA and others argue that local coverage decisions should be made more openly and be based on medical evidence.

By Geri Aston, AMNews staff. April 10, 2000.

Washington -- In Minnesota, the physician community was up in arms last fall over the state Medicare carrier's decision to deny payment for preoperative examinations conducted by primary care physicians.

The carrier viewed the change as bringing its policies in line with national regulations that prohibit payment for routine screenings and did not take the decision to its advisory committee, which includes physician representatives.

But the change was met with stiff opposition from physicians who didn't agree with the carrier's conclusion and didn't believe a change in the standard of care was appropriate.

"It would have caused a really dramatic change in medical practice," said Janet Silversmith, the Minnesota Medical Assn.'s director of health economics and policy analysis. The outcry from the local physician community and intervention by the Health Care Financing Administration forced a delay in the policy.

The AMA uses the case as an example of the wide discretion local carriers have in determining Medicare coverage and the need for national standards that carriers should follow in making those coverage decisions.

The AMA renewed its calls for national standards at a recent Washington, D.C., briefing at the Heritage Foundation, a conservative think tank.

Its views are shared by some beneficiary advocacy groups and might be gaining some ground at HCFA.

Local carriers make about 80% to 90% of Medicare coverage decisions, according to Jeffrey Kang, MD, MPH, the chief clinical officer at HCFA and director of its clinical standards and quality office.

Carriers aren't allowed to make decisions that would expand coverage beyond Medicare's benefits or that would interfere with national coverage decisions. They are bound by the requirement that Medicare pay only for items that are "reasonable and necessary" for treatment or diagnosis.

The AMA maintains that carriers sometimes use their authority arbitrarily or simply to reduce costs, and make decisions secretly without disclosing their reasoning.

"We want a process," said AMA Trustee William G. Plested, MD. "They could just use a dartboard for all we know."

Although carriers have advisory committees made of physician and beneficiary representatives, those bodies are used at the carriers' discretion and picked by them, he said.

HCFA last year established a new, open national coverage decision-making process. It established the Medicare Coverage Advisory Committee, which has six medical specialty panels organized roughly parallel to Medicare's benefit categories.

Local carriers should be required to use a similar process, Dr. Plested said. Their decisions should be based on the various types of medical evidence, he added.

The Medicare Rights Center, a New York-based beneficiary advocacy group, also supports a more uniform carrier decision-making policy, said Joe Baker, the center's executive vice president.

"It should be transparent," he said. Carrier guidelines should be available to consumers and physicians, and published on the Internet.

"HCFA needs to do a better job of monitoring carriers," Baker said.

Holding carriers to decision-making standards that are open and based on medical evidence would reduce some of the variation in local coverage across the nation, Dr. Plested and Baker said.

Government activities

According to Dr. Kang, HCFA is aware of the momentum building in the physician, medical device and beneficiary communities for standardized local decision-making rules. The agency is focusing on the criteria used to determine coverage.

"It is desirable to have criteria that apply at the national and local levels," he said. "The trick is to make them have enough flexibility so that legitimate and desirable variations in practice can be recognized."

This summer, HCFA will likely publish a notice of its intent to create a proposed rule clarifying what it means by "reasonable and necessary," Dr. Kang said. The agency first tried to establish such a rule in 1989, but dropped the proposal because of opposition to the inclusion of cost effectiveness as a criterion.

Dr. Kang said HCFA is holding discussions about whether to hold local carriers to the same process used in determining national decisions.

But, he said, physicians' complaints are generated more by a lack of "reasonable and necessary" criteria than the process local carriers use.

The carriers do "pretty good on process," Dr. Kang said. "Physicians just might not be happy that their advice was not taken."

Any changes in the local carrier process should be carefully evaluated, according to Gail Wilensky, PhD, chair of the Medicare Payment Advisory Commission. For example, requiring plans to use science could slow the process because "early on the science is shaky." Carriers often approve new procedures and technologies more quickly than the federal government ever would, she said.

Dr. Wilensky, a former HCFA administrator, urged caution in expanding the new national coverage determination process to the local level.

"You have to make sure it doesn't create more bureaucracy," she said. "Let's watch and see if it's something we want to replicate."

Carriers argue that they aren't making decisions arbitrarily.

"It's a very specific process," said Alissa Fox, executive director for legislative policy at the Blue Cross and Blue Shield Assn. Blues plans are the local carrier in 16 states.

Blues carriers utilize their local advisory committees, publish proposed coverage changes and seek comment from the physician community, Fox said. Carriers also seek input from peer review organizations and medical specialty societies, according to Blues materials. They base their policies on "strong evidence" and consider both published authoritative evidence derived from clinical trials and "the general acceptance of the medical community."

People who advocate a more standardized system "want everything paid for," Fox said. "If you have a system like that, then Medicare would go bankrupt even sooner."

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