This document provides background information and summarizes the debate over revising the criteria and process used by HCFA to determine the coverage of medical devices under Medicare. The links to the left will lead you to public documents that we have found.
Inventing a
medical device that alleviates a serious disease or disability is one thing;
getting the government to cover payment for it under one of its two mammoth
programs, Medicaid or Medicare, is quite another. A large segment of the American
population utilizes at least one medical device, ranging from pacemakers,
insulin pumps, and saline breast implants to old standby's like wheelchairs
and walkers. The technological prowess of American industry and the availability
of capital for potentially lucrative markets translate into a steady stream
of new medical devices. Yet without government approval for payment for a
device, any such product faces a limited market. Depending on the circumstances,
private insurers may follow the government's lead and, thus, no significant
market may exist without government approval.
Over time and
for a variety of reasons pressure built for changes in the government process
for approving devices for coverage under Medicare, the government program
for insuring senior citizens. The bureaucratic process was centered in the
Health Care Financing Administration (HCFA). (HCFA was later reorganized as
the Centers for Medicare and Medicaid Services. Another bureaucracy, the Food
and Drug Administration, evaluates devices for safety and reliability and
its approval must precede any consideration for coverage under Medicare.)
Device manufacturers were critical of HCFA because the process was largely
secret and in their minds, devoid of clear standards for evaluating their
products. They couched their criticism in high-minded terms. As one lobbyist
put it, "The problems that are being raised about the criteria and process
may seem arcane and technical but the issue is really about appropriate access
to care and the highest quality of care for Medicare patients."
More dispassionate
observers would conclude that the real problem from the point of view of the
industry was that the process was closed off to lobbying. Another industry
lobbyist complained "[our applications] just sort of went into a black
hole and you didn't really know what happened. Months might go by, sometimes
years before you would know whether you got covered, that is made eligible
for payment."
Another issue
was raised not by manufacturers but by physicians. Doctors want decisions
about patient care to reside with doctors, not with insurance companies or
government regulators. Unless they're dealing with a wealthy senior citizen,
it's pointless to prescribe a treatment that isn't approved for Medicare reimbursement.
Thus, professional associations representing physicians, such as the American
Medical Association, were pressing HCFA for greater involvement in the approval
process by doctors.
Under the pressure
from a lawsuit, a bill antagonistic to HCFA backed by some prominent legislators,
and the lobbying of trade groups, the agency announced in 1999 that they were
reforming the approval process. The new process, if not transparent, is more
open. A new Medicare Coverage Advisory Committee was established, and physicians,
scientists, and consumers were slated to fill the bulk of the positions on
the board. A spokesman for a physicians group noted with satisfaction, "There
wasn't anyplace on the panels for industry. Industry was going to be the presenters."
Even so, the new procedures were a step forward for manufacturers since they
would be able to monitor the process much more closely than before.