Medical Device Link.

IVD Technology Magazine
IVDT Article Index

Commentary

Negotiated rule making for medicare coverage:
What have we learned?

Ted Mannen

For the IVD industry, the negotiated rule making that has attempted to craft national Medicare coverage policies for IVD tests will prove to be one of the most significant policy developments for years to come.

To some, such a high estimate of the value of that process might seem overblown. That's especially true in light of the fact that, while the negotiations are to be completed in August, a number of steps will remain to be completed afterward. In addition, some might argue that, far from being a significant accomplishment, the negotiated rule making failed to achieve some of its most important goals.

How could the negotiated rule making on IVDs raise such unusual, even contradictory, conclusions? The answer to that question begins with an understanding of what the rule making is, and how it came about.

The Congressional Mandate

In the Balanced Budget Act of 1997 (BBA), Congress directed the secretary of Health and Human Services to adopt uniform national coverage and administrative policies for clinical diagnostic laboratory tests. The new policies were to promote greater program integrity, national uniformity, and simplicity in administering claims for laboratory tests payable under Part B of Medicare. Congress also directed that these policies be developed through a process known as negotiated rule making—a gathering of interested parties who work with the government to negotiate a regulation that they can all agree upon.

Following passage of BBA, the Department of Health and Human Services prepared a conveners' report—a plan for conducting the rule making. The report explained that the negotiations were intended to lead to a consensus on the text or content of a proposed rule, which would then be published for public comment. The conveners also noted that most negotiated rule making committees develop ground rules, including an understanding that participating parties will not submit negative comments on issues that are within the scope of the published agreement.

In their report, the conveners also addressed the scope of the committee's work and its membership. "Most of those we interviewed indicated that the negotiated rule making should be a hybrid—that is, the committee should both design a process for establishing national policies and, with respect to some specific tests, establish the actual coverage policies themselves," said the report, which also endorsed this approach. The report recommended that 14 groups, in addition to representatives of the Health Care Financing Administration (HCFA), participate as committee members, and that the Health Industry Manufacturers Association (HIMA) serve as the representative of the medical device industry. HCFA accepted the list of recommended committee participants.

Committee and Work Group Meetings

The committee held its first meeting in July 1998. It created six individual work groups to develop specific national coverage policies for a limited number of clinical diagnostic tests. At the same time, the full committee itself agreed to take up all other administrative and coverage issues.

There was disagreement within the panel over whether the negotiations should address the overall coverage process for IVDs in addition to specific coverage policies, or just the specific policies themselves. Although HIMA preferred that the negotiations address the overall coverage process issue, the ground rules of the negotiations required unanimous consent of all parties—something that appeared too difficult and time consuming to achieve on this issue. Therefore, HIMA accepted the consensus that the national process for IVDs would not be addressed in the rule making, but would be addressed through an entirely separate HCFA effort to develop a new national coverage process for all medical technologies.

For the next several months, the work groups and the committee met on many occasions, sometimes in person, often by conference call. The sessions were frequently long and complex. Late in 1998, the work groups reported to the committee which, in January 1999, found general consensus in the following key areas.

Draft Language for 23 Coverage Policies. This language describes each test, indicates when the test is appropriate, lists the indications for use, and provides the appropriate billing codes for the tests (see sidebar, page 26).

Documenting Claims. The parties agreed on a number of issues concerning the respective roles of the laboratory and the physician in documenting claims, as well as in maintaining and providing records related to a test.

Frequency Limits. The consensus coverage policies include limits on the frequency of specific tests. But HCFA also agreed that a frequency limit would not result in automatic denials of payment unless the information about the test, as published by HCFA or its contractor, specifies what is generally considered a reasonable frequency of utilization for Medicare payment purposes.

What Next?

The committee is scheduled to meet again in August to review a regulation package that HCFA is drafting. If the committee approves the draft, HCFA plans to publish the regulation package in late fall 1999. Comments would be taken on the entire contents of the proposed regulation (including the national coverage policies) and a final rule would be published probably sometime in 2000. The final rule would probably not take effect until at least a year later—though there is nothing to prevent local contractors from adopting the national coverage policies for their own use before then.

If HIMA signs off on the consensus agreement at the August meeting, it will be precluded by the committee's ground rules from filing negative comments on provisions within the scope of the proposed rule. However, the rules would not prevent HIMA member companies from filing comments on any provision in the proposed regulation.

One additional nuance is worth noting. Parties that assent to the consensus agreement are still free to comment on issues outside its scope. One of those issues that HIMA may address involves Medicare coverage policies for IVD technologies that do not yet have an FDA marketing clearance. Although this topic was discussed during the negotiations, all parties agreed not to include it as a formal part of the agreement.

Lessons Learned

Although the negotiated rule making process is not yet finished, it has proven to be significant in several respects. The industry participants in the process found it to be very resource intensive, and were constantly reminded that consensus can often be elusive. At the same time, the negotiations provided clear opportunities. Although the committee decided not to address the broader issue of Medicare's coverage-decision process, for instance, HIMA was able to stress industry's view that the broader issue of improving the coverage process for all IVDs and all medical devices was critical. The lessons we have learned during the process have application to every part of the device industry.

IVD Companies. This portion of the rule making process is most important for those IVD companies whose products are covered by the consensus policies. The policies define—for the almost 40 million Medicare beneficiaries—when the test can be used, where, and for what indications.

The IVD Industry. Even for those companies whose products are not addressed, the negotiated rule making is, very possibly, a sign of things to come. In the future, Medicare may decide to push for more policies to define coverage for more tests.

The Medical Device Industry. For the device industry beyond the IVD sector, the negotiated rule making was a reminder that Congress can have a very tangible, real-world impact on medical devices. In effect, the general drive by Congress to reform Medicare led to a process that is now defining, in intense detail, how and when IVD products should be used and how medical professionals should use them.

Conclusion

One of the most positive results for the industry overall is that a device industry representative was included in the negotiated rule making. Our industry sat at the table with physicians, other providers, and lab groups in sorting through national policies that have widespread implications for the use and future innovation of IVD tests. In this role, HIMA was able to engage in an extended dialogue with other stakeholders on issues critical to devices and to solidify relationships that might lead to greater understanding and common interests on other issues.

The negotiated rule making process is not yet complete. A great deal of dust remains to settle. But when the process is finished, the IVD negotiated rule making—whether ultimately judged good or bad—will serve as something of a milestone.

Ted Mannen is executive vice president of the Health Industry Manufacturers Association (Washington, DC).