Study evaluates the factors underlying Medicare decisions on coverage of medical technology

Health Press: February 13, 2012.

By law, Medicare is mandated only to cover medical technology deemed “reasonable and necessary” for the diagnosis of illness or injury in . CMS makes 10-15 national coverage determinations (NCDs) each year on technologies deemed to have a substantial impact on the program. Because CMS has not provided formal guidance on the interpretation of the “reasonable and necessary” criteria, it has not always been clear what factors play a role in technology coverage decisions. The new study is the first of its kind to evaluate quantitatively the factors underlying Medicare decisions.

The research also shows that CMS’s coverage of medical technology has become more restrictive over time. When controlling for other factors, CMS was ten times less likely to cover a technology from 2006 through 2007 than it was in the early 2000s.

“This research offers the  a better understanding of the type of evidence that  considers in NCDs,” said lead author James D. Chambers of Tufts Medical Center, “thus providing a valuable insight into the reasonable and necessary criteria.” He added that “CMS and other payers can also benefit from this kind of external review of coverage decisions as it can help ensure the consistency of decisions and the integrity and accountability of the coverage process.”

The authors used data from the Tufts Medical Center NCD database, and conducted a logistic regression analysis to evaluate how various factors affect the likelihood of positive coverage.