Is Medicare’s System for Challenging Coverage Determinations Unintentionally Unfair?

On March 25, Susan Jaffe published a blog post in the New York Times about Medicare’s recent change to cover skilled therapy (e.g. physical therapy, nursing care) where it is “reasonable and necessary” maintain a patient’s condition and to prevent deterioration, even when it is not likely that the patient will improve. Jaffe notes that the revisions will likely have a substantial impact on thousands of Medicare beneficiaries even though the change has been largely unnoticed.

The revision highlights a potential problem with the system in place for challenging Medicare coverage. The revision itself is unremarkable, reflecting what national Medicare policies professed, but what local contractors sometimes ignored. What is remarkable is the time it took for Medicare to make the revision, from when the controversy appeared to when Medicare posted the change in its manuals. This delay is problematic because it reflects a dichotomy in how coverage decisions are challenged and changed under Medicare – due not to medical necessity but to political and financial circumstances beyond patient control.

Constituents can change Medicare coverage policies through two processes. One is through the litigation system. Judges can overturn Medicare coverage decisions after patients have exhausted Medicare’s internal adjudication process. Yet, litigation can take years and judges usually defer to Medicare’s judgment. National Coverage Determinations (NCDs) provide an alternative under which constituents can encourage Medicare to reconsider or overturn a prior coverage decision. NCDs supersede Local Coverage Determinations (LCDs) – coverage decisions that affect a region of the United States. When Medicare determines that the LCDs for a specific technology or service are “inconsistent or conflict with each other to the detriment of Medicare beneficiaries,” Medicare can decide to issue an NCD to provide uniform coverage.

For well over a decade, critics have questioned how Medicare Administrative Contractors (MACs) have used LCDs to restrict coverage of skilled therapy services. Medicare national policies state that a patient’s potential for improvement should not be the determining factor for skilled therapy coverage. Yet, throughout the 2000s, many LCDs referred to implicit “improvement standards” to deny coverage for skilled therapy services, requiring patients show improvement before Medicare would continue to cover their claims. In 2011, beneficiaries and patients advocacy groups challenged the “improvement standard” in Jimmo v. Sebelius. In 2013, the parties reached a settlement. Medicare would clarify that coverage for skilled therapy services “does not turn on the presence or absence of a beneficiary’s potential for improvement.”

This resolution to a decades-old controversy contrasts sharply with how Medicare has considered controversial coverage policies for other issues through its NCD process.  Medicare has reconsidered its coverage of cardiac pacemakers three times in the last ten years. Likewise, Medicare issued an NCD for transcatheter aortic valve replacement (TAVR) to anticipate a controversial treatment, months before FDA approved the first TAVR device.  Each NCD consideration took approximately 12 months, from when Medicare received the initial request to when Medicare issued its final determination. In contrast, more than ten years elapsed from when Medicare local contractors began denying coverage of skilled services to when Medicare issued its new policy.

Theoretically, Medicare should be able to address all controversial technologies and services evenly, but practically, Medicare can address only a subset of these issues. The NCD process provides a reliable way to bring contentious issues to Medicare’s attention, but many NCDs are related to technologies backed by politically savvy groups with special financial interests in a revised coverage policy. Of the twenty-four NCDs modifying coverage in the last four years, only six NCDs addressed medical services that did not relate to a specific technology. Further, all four internally generated NCDs on medical services were spurred by a change in national medical guideline recommendations that Medicare is statutorily obligated to follow.

Jaffe’s post and Medicare’s NCD record suggest that how Medicare chooses to reconsider a coverage decision may be less a matter of medical necessity and more a result of political and financial happenstance. Given Medicare’s budget constraints, it seems unlikely that Medicare can devote more resources to discovering or evaluating all problematic coverage decisions. Unfortunately, this means that the NCD process, which provides a quick and reliable path for Medicare to reconsider coverage, may be inaccessible to orphaned medical issues – services or technologies that lack well-funded, political champions.

Of course, the NCD process is not the only way by which constituents can challenge Medicare coverage. Litigation has its own advantages, providing publicity and remedies that NCDs cannot. But given the costs and length of litigation, Medicare should consider ways to make the NCD process more accessible and responsive to less popular, but socially impactful medical issues.

cguo

2015-2016 Peter Barton Hutt Student Fellow During her fellowship year, Elizabeth Guo was a third year student in the JD/MPH Program at Harvard Law School and the Harvard School of Public Health. Her interests lie at the intersection of law, health care reimbursement, and biopharmaceutical regulation. Elizabeth graduated from Harvard University with a BA in social studies, focusing on the bioethics of assisted reproduction in China. Prior to law school, she was a senior associate at Avalere Health working with life science clients on a range of health policy topics, including Medicare coverage and reimbursement, biosimilar regulation, and healthcare quality programs. Elizabeth served as a student editor of the Journal of Law and Technology and a member of the Mississippi Delta Project’s Delta Project’s Food Policy Initiative. Elizabeth's fellowship paper was entitled: "Reputation and Judicial Deference: An Examination of FDA’s Reputation and Judicial Deference to Agency Action."

One thought to “Is Medicare’s System for Challenging Coverage Determinations Unintentionally Unfair?”

  1. Of the twenty-four NCDs modifying coverage in the last four years, only six NCDs addressed medical services that did not relate to a specific technology. Further, all four internally generated NCDs on medical services were spurred by a change in national medical guideline recommendations that Medicare is statutorily obligated to follow.Thanks for sharing all that great information..

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