Atlanta, GA—A session at the 2010 meeting of the International Society for Pharmacoeconomics and Outcomes Research discussing how Medicare’s evidence requirements for covering new technologies might change under the new healthcare reform bill painted a portrait of an agency that has recently raised the evidentiary standards for evaluating new technologies but is slow to change, especially in the arena of advanced technology.
Panelist Steve E. Phurrough, MD, MPA, chief operating officer and senior clinical director at the Center for Medical Technology Policy and a former coverage director at the Centers for Medicare & Medicaid Services (CMS), observed that Medicare has never clearly expressed its standards for covering new medical technologies. “Medicare has a mantra, ‘reasonable and necessary’; it does not pay for things that are not reasonable and necessary,” said Dr Phurrough. “Since 1965, Medicare has never defined what that means.” Dr Phurrough acknowledged that the agency has recently said that it will consider something to be “reasonable and necessary if it improves net health benefits. Dr Phurrough further explained that although a “conditional” approach to coverage has the potential to speed coverage and develop additional evidence, the current agency position of making clear-cut decisions about coverage is incompatible with that concept.
In presenting a quick history of Medicare’s coverage policy that emphasized the agency’s inability to clearly define its research requirements, Dr Phurrough quipped, “Medicare pays for stuff, and pays for stuff in unusual ways.”
Dr Phurrough also observed that Medicare has traditionally applied low, medium, and high standards of evidence. For the approval of kyphoplasty, for example, Medicare determined that there was not enough evidence to support its benefit but continued to fund it anyway. On the other hand, Medicare has 6 times asked for new evidence to support the use of carotid stents. According to Dr
Phurrough, the round of decisions around carotid stents suggests a growing tendency for CMS to require more evidence for new technologies. He explained why: In 2008, CMS released a proposed decision that changed the payment practices at Medicare. “Because the legislation says, ‘don’t pay for things that are not reasonable and necessary,’ if in fact you have paid for something, you have determined it reasonable and necessary.” Dr Phurrough continued, saying, “Once you’ve paid for it, you have met the evidentiary bar, most of the time, having never looked at the evidence.” Once Medicare agrees to pays for something, he detailed, it will only deny coverage with clear positive evidence of harm or positive evidence of lack of benefit. Consequently, CMS has recently focused on coverage decisions for new drugs and technologies that have not had local coverage decisions, and in those cases, it is applying relatively high evidentiary standards.
Shifting Landscape, Static Organization
Panelist James Chambers, MPharm, MSc, project director at Tufts Medical Center, supported many of Dr Phurrough’s claims about Medicare. Mr Chambers discussed how CMS is more likely to cover a new technology if good quality clinical evidence exists to support its efficacy. Coverage is less likely, said Mr Chambers, if an alternative therapy is available, a coverage decision has been made in recent years, or if there is no estimate of cost effectiveness available. His research, which was conducted by surveying National Coverage Determinations between 1999 and 2007, also shows a broad trend in CMS covering cost-effective technologies.
In the question session, Bryan Luce, senior vice president, Science Policy for United BioSource Corporation, asked if the health reform bill’s suggested investment in health information technology (HIT) will change the way Medicare evaluates evidence and makes coverage decisions by providing a “feedback loop” and “rapid learning system” for continually presenting and evaluating evidence.
Acknowledging that CMS possesses great data resources, panelist Penny Mohr, MA, vice president of Programs for the Center for Medical Technology Policy in Baltimore, was less than optimistic about implementing HIT at CMS. “While I think it’s a good opportunity,” she said, “we have a long way to go to get to that point.”
Dr Phurrough was more blunt in his assessment of the potential for HIT reforms in CMS. “Briefly, no,” he pronounced. “CMS has this process, fairly well defined now, and that process doesn’t include using those kinds of databases. If clinical research determines ways to use those kinds of databases in fairly formal trials to come up with good quality evidence; then they will use that evidence, but for HIT to make a difference in coverage decisions, the coverage process needs a fairly significant transformation.”
