After months of inaction on its much-debated proposal to implement a new approval category for coverage with evidence development, this month the Centers for Medicare and Medicaid Services (CMS) suddenly leapt into action. Within the span of eight days, the agency issued memos explicitly citing the possibility of coverage with evidence development for three distinct technologies. But this latest flurry of CMS activity has sparked questions as to whether coverage with evidence development will be applied as narrowly as CMS has previously suggested.

To date, this relatively new type of national coverage decision has been the subject of more discussion than action. “If this signals greater willingness of CMS to deploy coverage with evidence development in 2008, then the reimbursement ground beneath device manufacturers may be about to shift,” says Ted R. Mannen, a member of Epstein Becker & Green PC and managing director of EBG Advisors Inc. (Washington, DC).

On December 13, CMS issued a proposed decision memo that called for applying coverage with evidence development to computed tomographic angiography for the diagnosis of coronary artery disease. The decision summary—available at www.cms.hhs.gov/mcd/viewdraftdecisionmemo.asp?id=206—states that “the evidence is inadequate to conclude that cardiac computed tomographic angiography is reasonable and necessary under section 1862(a)(1)(A) for the diagnosis of coronary artery disease; however, the agency believes the evidence is promising for two clinical indications and that coverage with evidence development would be appropriate for these indications.”

On the following day, December 14, CMS proposed changes to its national coverage decision for continuous positive airway pressure (CPAP) equipment. The proposal would extend reimbursement to home diagnostic testing for obstructive sleep apnea. However, the memo stipulated that, under the proposal, Medicare coverage for CPAP would only be expanded when provided in the context of a clinical study meeting certain coverage with evidence development requirements. Details of the proposed criteria are available at www.cms.hhs.gov/mcd/viewdraftdecisionmemo.asp?id=204.

“The fact that CMS is proposing coverage with evidence development in these situations raises questions,” says Jo Ellen F. Slurzberg , vice president for reimbursement and health policy at Almyra Inc. (Boxborough, MA). “It suggests that the application of coverage with evidence development will not be rare—as CMS has indicated it would be—but instead, frequent.”

As if to underscore the shifting definition of frequency, on December 20 CMS issued another proposed decision memo on fluorodeoxyglucose positron emission tomography (FDG PET) for chronic osteomyelitis and other indications. In this most recent proposed decision, CMS requested comments on “the potential to provide limited coverage for any or all of these indications under the coverage with evidence development paradigm. We solicit public comments as to the specific types of studies that would be appropriate under coverage with evidence development.” The memo can be viewed at www.cms.hhs.gov/mcd/viewdraftdecisionmemo.asp?id=207.

Slurzberg says the recent memos raise a number of problematic issues. “The questions being raised by CMS and the trials being proposed are very extensive, and normally trials of this magnitude would be conducted in the context of FDA regulatory guidance and oversight,” she says. “Who will then oversee these trials? The trials being suggested will take years to complete, and it is unclear if they can be designed to address the questions being asked.

“For industry, coverage with evidence development is becoming a wild card in the overall product development and commercialization process for new devices, as well as for mature devices,” Slurzberg adds. “The lack of predictability is material for both start-up phase companies and mature companies. Even with trials conducted in the context of FDA clearances and approvals, there are lessons learned along the way and instances where the original questions posed shift in the course of the trials, as do endpoints and statistical requirements. CMS does not have the expertise of FDA to manage these complexities.”

Coverage with evidence development is among a wide range of topics discussed by seven national reimbursement experts in “2008 Reimbursement Update,” in the January/February issue of MX magazine. The roundtable panelists also consider pay-for-performance initiatives, the new Medicare-severity diagnosis-related grouping system, and other reimbursement-related policies and trends.

© 2007 Canon Communications LLC

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