July 19, 1999

Jeffrey Kang, MD
Director
Office of Clinical Standards and Quality
Health Care Financing Administration
7500 Security Boulevard
Baltimore, MD 21244

RE: Federal Register Notice; Procedures for Making National Coverage Decisions-HCFA-3432--GN

Dear Dr. Kang:

On behalf of our more than 800 members, I would like to thank you for your efforts in preparing the recent Notice, which sheds light on the process the Health Care Financing Administration (HCFA) will use to make national coverage decisions for the Medicare program (64 Federal Register, No. 80, pages 22619-22625, April 27, 1999).

The Health Industry Manufacturers Association (HIMA) is a Washington, D.C.-based trade association and the largest medical technology association in the world. HIMA represents more than 800 manufacturers of medical devices, diagnostic products, and medical information systems. HIMA's members account for nearly 90 percent of the $62 billion of health care technology products purchased annually in the United States, and more than 50 percent of the $147 billion purchased annually around the world. We at HIMA know that you share our view of the importance of the Medicare coverage process. Medicare coverage means patient access to state-of-the-art medical care for our most vulnerable citizens. If the coverage process is not clear, if it results in unnecessary delays, if it is not sensitive to the medical innovation process, beneficiaries will pay the price--appropriate care will be denied or unduly delayed, and medical progress will be inhibited. We are pleased to see that this Notice contains a number of specific steps to make the national decision making process more open and understandable to the public, that it explains the way the new Medicare Coverage Advisory Committee will assist in this process, and that it makes an attempt to give the public a sense of how long the various elements of this process will take.

We at HIMA appreciate the frank and open dialogue we have had with you for the past year concerning the need to modernize the Medicare coverage decision making process. HCFA has clearly made progress in initiating reforms in this area, and we submit these comments in the hopes that you will further refine and formalize these first coverage process reforms, and that you will consider putting in place certain steps not contained in the April 27 Notice.

Our comments reflect two key concerns. First, we are concerned that the national decision making process is too long. Indeed, the review process set forward for at least many technologies in the Notice exceeds their product life cycles. We have a number of suggestions on how to speed the time it takes to review new technology and make it available to Medicare beneficiaries. Second, we have suggestions on additional elements to include in the national coverage process that we believe will strengthen it. In addition, we have noted a few suggested clarifications or refinements to the items contained in the April 27 Notice.

HIMA has the following recommendations for accelerating the time frames associated with the national coverage review process:

• In modernizing the Medicare coverage process, HCFA should focus on the time it takes to fully integrate a new medical technology into the Medicare program, not merely on discrete steps in the process. HCFA should measure (and report on) its performance by measuring the total time it takes to complete the coverage, coding, and payment processes, as well as the various components of these processes. In addition, HCFA should, within one year of implementation of the April 27 Notice, set forth specific time frames for completing these coverage, coding, and payment processes. Despite the time frames specified in the Notice for certain elements of the national coverage process, the task of bringing a new technology into the Medicare program and making it available to beneficiaries is too lengthy. The Notice sets forth time frames that will take close to a year for the most non-controversial reviews, and at least two (and perhaps three or more) years for more controversial matters. Patients deserve prompt access to needed medical treatments. It is unrealistic to expect this process to consume this much time after a technology has been approved or cleared for marketing by the U.S. Food and Drug Administration. Measuring performance (and making the findings available to the public) should serve as a management tool to help ensure that the coverage, coding, and payment processes are coordinated and proceed in a timely way. Further, we believe that, once HCFA has had experience with implementing the new coverage process, it will be able to set specific time frames for the coverage, coding, and payment processes.

• HCFA should specify a 45-day period during which it will determine whether to accept a formal request for a national coverage decision. The Notice currently specifies that the national coverage review process does not begin until a formal request has been filed by a requestor and accepted by the agency. Acceptance by the agency starts a series of time frames. The Notice states that: "If we determine the request is adequately supported, we will accept the request and begin our review process." The Notice provides no certainty concerning how long it will take the agency to review a formal request and determine whether or not it is in order. We suggest that the formal submission of the request should trigger the beginning of the review process and the time frames set forth in the Notice. Further, we suggest that the agency specify a period-up to 45 days, one-half the current 90-day period set forth in the Notice-to determine whether the request is in order. If the request is accepted, all time frames specified in the Notice should be initiated from the date the request was received by the agency. If the request is not accepted during the 45-day period, the review process time frames are not begun. This is the current practice used by the Food and Drug Administration in considering whether to accept medical device Pre-Market Applications for filing.

• HCFA should take steps to ensure that any referrals it makes for MCAC review or for technology assessments are completed within time targets specified by the agency. While the Notice provides certain elements of the review process with time frames, none are specified for the time an MCAC review will take. (The Notice states only that HCFA expects the review will proceed "as expeditiously as possible.") In addition, the Notice informs the public that technology assessments may take anywhere from 90 days to a year, and perhaps longer. When HCFA makes a referral, it should specify a time frame within which it expects a response.

• HCFA should clarify the situations under which MCAC may request a technology assessment. The Notice indicates that both HCFA and MCAC have the prerogative of requesting a technology assessment. We are concerned that situations might arise where both HCFA and MCAC might request assessments, or disagree with respect to the need for an assessment. Our reading of the Notice is that MCAC might well request a technology assessment during the course of its review of a technology, and then resume review once a technology assessment has been completed. Given the time that might be associated with such assessments, and their impact on the time it might take to complete the coverage review process, we request more clarity on the circumstances under which referrals for technology assessments will take place.

• HCFA should streamline the coding and payment processes associated with the review of new technologies by assigning temporary procedure codes (where no codes exist). For example, HCFA could assign a code when a request for a national coverage decision is made and accepted by the agency. HCFA's coverage, coding, and payment processes are not coordinated, and their current operations slow the integration of new medical technologies into the Medicare program. Assigning temporary procedure codes (where none exist) at the start of the national decision making process would eliminate one hurdle to speedy implementation of coverage decisions. The Notice provides 180 days to put in place systems to carry out coding and payment determinations with respect to the newly-covered technology-effectively delaying beneficiary access after a national coverage decision has been made. We also have concerns that the separate processes by which HCFA makes decisions on which procedure code is appropriate for a given technology, and which payment level is adequate, are in need of modernizing as well.

• HCFA should avoid unnecessary delay in making covered technologies available to beneficiaries by eliminating the 180 day period the Notice provides to implement national coverage decisions. Coding and payment matters can be handled more expeditiously than provided for in the Notice. There is no need to delay patient access to a new medical technology for a period that will take more than six months (and more likely eight or nine months) after the agency has determined that it is "reasonable and necessary" and should be covered. HCFA's coverage, coding, and payment regimes should be streamlined, operate concurrently, and provide more timely beneficiary access to covered services. Instead of delaying beneficiary access to newly-covered technologies for 180 days to allow for new payment systems to be put in place, HCFA has tools available to make the covered items available as soon as the coverage determination has been made. For example, HCFA could take action that would permit contractors to hold claims for newly covered items and bill later when new payment systems have been established. It could also make use of new methods for determining interim payment amounts to reimburse providers (in place of current inadequate methods which include gap fill and arbitrary assignment into existing payment categories, like DRGs) until final payment levels have been set. Further, it could require contractors to accept temporary codes and process them manually until new systems become available.

In addition, HIMA recommends that the coverage process described in the April 27 Notice be amended to address the following:

• HCFA should recognize that the descriptions set forth in the April 27 Notice serve as a starting point for modernizing the coverage process, and that revisions need to be made that make more firm commitments to the public. The Notice contains a general description of the coverage process, but does not really define it. The Notice's descriptions of the coverage review process and its component parts repeatedly use terms like "generally," "usually," or "ordinarily" to explain operational procedures. Firm commitments are not made. We believe that the process should be made more certain and predictable, and that the lack of commitment that characterizes the April 27 Notice should be replaced with more certain processes as the agency responds to comments, such as these, and as it gains experience.

• HCFA should permit those requesting national coverage decisions to meet early in the product development process to reach collaborative agreements with the agency as a means to expedite decision making. We believe that HCFA should build into the national coverage process the opportunity for a product sponsor to meet with coverage policy staff for the purpose of reaching agreement on the requirements needed to secure Medicare coverage approval (e.g., requirements regarding the type of evidence the product sponsor may develop, as well as protocol design). This meeting should be available early in the product development process-prior to FDA approval or clearance-in order to lay out the agency's requirements for securing approval in the coverage review process. We recognize that these meetings will require the agency to commit its resources, but we believe those resources will produce savings down the road as the agency reviews the information produced by the requestor.

• Reforms in the coverage decision making process should be made applicable to local medical review policies developed by local and regional contractors (i.e., carriers, intermediaries, DMERCS, and Medicare Integrity Program contractors). Medical device innovation is characterized by continuous, incremental improvements, based on the feedback of medical professionals who use these technologies in actual clinical settings. The local coverage process is especially well suited to evaluating innovative medical technology. While we recommend that reforms be made at the local level, we need to emphasize that the current ratio of local to national decisions serves the system well. This emphasis on local decision making offers important flexibility to the system that needs to be preserved. Further, local decision making is in some ways more economical to administer and helps to ensure that new technology does not diffuse until it is well accepted. We believe that HCFA should require that reforms at the national level that are designed to make the decision making process more open and understandable to the public be implemented at the local and regional levels as well. For example, the public should be able to make suggestions for local coverage determinations, time frames for review should be put forth, the review process should permit public participation, and the rationale for decisions should be made available (with contractors responsible for responding to public comments received). In addition, meetings of local carrier advisory committees should be opened to the public (including providing advance notice of meeting dates and agendas). Further, in situations where some or all of the contractor medical directors jointly create working groups, their discussions should be open to the public. Any working groups should be specifically identified on the agency's web site, and meeting agendas for the groups should be posted as well. Proposed policies developed by joint working groups should be taken through the local policy development process. HCFA should require these openness, transparency, and public participation objectives for the local and regional coverage process as it negotiates and finalizes contracts with carriers, intermediaries, and DMERCs each year. We would expect that contractors would seek to achieve these objectives in equally effective-- yet diverse--ways, tailored to local conditions. We also believe that HCFA should provide access to these contractors (and their procedures) on its web site.

HIMA requests the following actions to clarify our understanding of the Medicare coverage process:

• HCFA should specify a time period-no longer than 60 days-during which it will make a coverage decision after receiving a technology assessment. The Notice specifies that HCFA will make a decision within 60 days of receiving advice from MCAC; no comparable time period is set out for decision making should HCFA request and receive a technology assessment directly. We believe that this was an oversight, and we suggest that HCFA clarify the time frame for making coverage decisions after receiving a technology assessment.

• HCFA should make it clear to its contractors that their authority for making local and regional coverage decisions are not pre-empted by the initiation at the national level of the coverage decision making process. Most coverage decisions are made at the local and regional levels. Current policy is that Medicare's local and regional contractors have authority to make coverage decisions absent an extant national policy. In order to avoid confusion and to guarantee that contractors carry out their responsibilities in a timely way, HCFA should make this policy clear to its contractors. Given the long times associated with national decision making, it is important to ensure that the local and regional processes remain responsive to requests for coverage decisions.

• HCFA should provide additional time for the public to prepare evidence for MCAC. The Notice specifies that all evidentiary presentations before MCAC must be submitted in writing at least 20 days prior to MCAC meetings. MCAC meetings themselves are announced in the Federal Register 30 days prior to meetings. This leaves only 10 days for an interested party, who may be a product sponsor, to prepare and submit material for MCAC consideration. We believe that this short time period was unintended, and we urge HCFA to provide a more reasonable time period in its place.

• HCFA should provide further guidance to the public on how to participate in the coverage process. In particular, HCFA should consider expanding the Notice in the following areas:

• Notice of a request for technology assessment. When HCFA seeks a technology assessment, posting a notice on its web site would allow interested parties to comment on the scope and direction of the request, submit information that may be useful in the assessment, or even conduct studies or investigations that will prove useful in parallel to the assessment.

• Notice of issues on which HCFA would like input. When HCFA initiates its review of a service or item for coverage, it should do more than acknowledge that it has received a request. Through a posting on its web site, the agency should let the public know what data it has, and where it has questions that it would like answered. By doing so, interested persons will be able to help by supplying information that addresses the agency's concerns.

• The use of interactive techniques for collecting public input. HCFA should describe its plans for using town hall meetings and other techniques for encouraging interactive dialogue on the complex issues that surround coverage decision making.

• A commitment to respond to comments. Replies to comments accomplish two objectives-they educate the public regarding how the agency resolves the issues, and they encourage public participation by showing that the agency is listening.

• A description of the process HCFA plans to use to develop guidance documents. While the agency may be planning to address the process for developing guidance documents in another vehicle, we did not want to miss the opportunity to observe just how important it will be for the agency to spell out the public process it will use to develop these documents. FDA has a good model, which it has published (see 62 Federal Register 8961, February 27, 1997).

• National Non-Coverage Decisions should be issued only where clear evidence exists to support this action. HCFA should understand that early in the life of a new technology, the quantity and quality of information that is available regarding the technology may be in short supply, and not sufficient to support a favorable national coverage decision. HCFA should refrain from making a National Non-Coverage Decision in these instances, because such a decision will prevent local and regional contractors from covering the technology and developing useful information concerning its impact on patient well being. HCFA should only issue National Non-Coverage Decisions where it has an adequate information base to support this course of action. Thank you for considering these suggestions. We hope to see a revised Notice published soon that reflects the comments you have received on this important matter. In addition, we believe that HCFA should pursue formal rulemaking on this matter, after a period of time-we suggest a two-year period beginning with the date of publication of this Notice-during which it gains experience managing this new national coverage process.

Sincerely yours,

Ted R. Mannen
Executive Vice President
Health Care Systems