Dive Brief:

• The Medicare Payment Advisory Commission is objecting to a CMS plan to adopt a commercial insurance standard when determining coverage for products and services, according to comments the independent congressional agency filed in response to the agency's proposed rule.
• The idea of incorporating private payer policies in the coverage determination process is part of a broader proposal to modify how the agency makes coverage decisions. The rule would define the term "reasonable and necessary" to clarify the standards that CMS uses and would add a faster coverage pathway for FDA-designated breakthrough technologies.
• MedPAC also expressed concern about CMS' plan to use FDA's breakthrough device program for qualification for Medicare coverage, arguing that CMS, not FDA, should make coverage and spending determinations based on the specific needs of the Medicare population.

Dive Insight:

The CMS proposed rule intends to codify the definition of "reasonable and necessary'' currently in its Program Integrity Manual used by Medicare Administrative Contractors (MACs) to make local coverage determinations. The manual defines a product as reasonable and necessary if it is safe and effective, not experimental or investigational, and appropriate for Medicare patients.

The rule proposes an alternative way to meet the third criterion, stating that a product or service would be deemed appropriate for Medicare patients if it is covered in the commercial insurance market.

In its comment to the agency, MedPAC said it "strongly believes that CMS should not adopt a commercial insurance standard to determine coverage of services," emphasizing that the determination of whether a service is appropriate for Medicare patients should rest with CMS and not commercial payers.

The proposal "could increase the provision of low-value care, undermine Medicare's evidentiary standard, diminish the transparency and rigor of the coverage determination process, and adversely alter the relationship between manufacturers and commercial payers," the commission warned. Further, adoption of the proposed rule could result in a commercial payer covering certain services because of financial relationships with manufacturers, MedPAC said.

In a separate comment, the Medical Imaging & Technology Alliance, a trade association for imaging equipment manufacturers, urged caution in broad adoption of private payer policies, noting such policies rely on varied data sources and analytical methods.

MITA said it would generally support CMS using commercial coverage policies to expand Medicare beneficiary access to safe and effective items and services, but does not support denial of coverage based on a negative commercial policy, if CMS or a MAC determined the product is appropriate for Medicare beneficiaries.

The CMS proposed rule, published in August, covers the newly coined Medicare Coverage of Innovative Technologies program that would cover FDA-designated breakthrough devices for up to four years from the date they receive U.S. marketing authorization. MITA, echoing sentiments from other industry groups, said the proposed MCIT pathway would address the uncertainty manufacturers face as they wait for a coverage determination and expedite Medicare beneficiary access to novel technologies as they become available. CMS should also consider extending the coverage period to five years or longer, MITA added.

The public comment docket for the proposed rule closed Monday, with some 350 comments received, although the majority of comments have not yet been posted.