Perspective
Medicare and Medical Technology — The Growing Demand for Relevant Outcomes
N Engl J Med 2010; 362:377-379February 4, 2010
- Article
In deciding whether to pay for new medical technologies, the Centers for Medicare and Medicaid Services (CMS) is becoming more specific about its requirements for evidence of improved health outcomes in the Medicare population. In our view, this is a positive and overdue step, but one whose rationale and likely consequences must be better understood by the medical community, policymakers, and the public. Expansions of access to health insurance under the health care reform legislation pending in Congress — and resulting financial pressures — would almost certainly intensify the emphasis on more relevant and robust evidence.
Health care policymakers have long called on payers to shift from a narrow biomedical perspective — which considers a technology's safety and efficacy in terms of intermediate or short-term end points — to a wider perspective that considers whether technology improves final outcomes of interest — such as functional status, quality of life, disability, major clinical events, and death — and whether it does so in typical patient populations.1
Over time and in fits and starts, Medicare has embraced this emphasis on “outcomes.” The program pays for broad categories of health care services (e.g., hospital and physicians' services) but is prohibited by law from paying for items and services that are not “reasonable and necessary.” Although most coverage decisions are made by the regional health plans that administer the Medicare program, the CMS issues national coverage determinations (NCDs) each year for 10 to 15 technologies that are projected to have a major impact on care, for which an existing national policy requires updating, or for which regional policies are conflicting.
In 2000, the CMS clarified that the primary factors in making national determinations about what care is “reasonable and necessary” included whether a technology was safe, effective, and appropriate and whether it led to improved health outcomes.2 The explicit requirement for evidence of improved outcomes had not been formally articulated. The CMS also stated that in judging evidence, the program considered factors such as the quality of individual studies and the relevance of findings to the demographics of Medicare beneficiaries.
A review of all complete Medicare NCDs from 1999 through 2008 suggests that the focus on relevant outcomes has had measurable consequences. NCDs made before 1999 were not explained in written documents, making it impossible to assess those policies and prompting criticism about the lack of transparency. Since 1999, Medicare has approved coverage in about 60% of its NCDs, though almost always with restrictions placed on the clinical condition, patient population, or setting to which coverage applies.3 In its decision memoranda, the CMS has increasingly noted specific methodologic flaws in the scientific evidence, particularly a “lack of relevant outcomes” and “lack of applicability to the Medicare population” (see table
Evidence Limitations Cited in Medicare National Coverage Determinations (NCDs), 1999–2008.). A recent example involves the decision not to cover computed tomographic (CT) colonography. The CMS emphasized that clinical trials showing a benefit of screening with CT colonography were not necessarily generalizable, because the mean age of trial participants was lower than that of Medicare patients.4 These data suggest that the burden of proof is shifting, so that assessments begin with the presumption that a technology will not be covered unless its use is supported by reliable scientific evidence of improved outcomes in relevant populations. Notably, these data reflect reviews for the relatively small subgroup of technologies covered by NCDs and not the many technologies affected by local coverage decisions or those paid for once billing codes and payment rates have been established, often without specific clinical review.
Still, the trend holds important lessons, and both the medical community and policymakers should appreciate the intent and implications. Some physicians may be concerned about stricter evidentiary requirements, perceiving them as impeding access to important medical advances. Others may be disturbed by the idea of interference by “big government” in the doctor–patient relationship. Still others may suspect the motives underlying the requirement for evidence reviews, seeing the trend as part of a cost-containment agenda, as highlighted recently by the second-guessing of the motives behind changes to the screening guidelines for breast cancer and cervical cancer. Product manufacturers will undoubtedly fear that more time-consuming and costly hurdles will be placed in the path of reimbursement for their products.
In our view, however, the shift is both necessary and beneficial. First, physicians and patients benefit from knowing which technologies are most likely to improve health. Furthermore, as Congress moves toward substantial reductions in Medicare spending, the program will be under increasing pressure to ensure that dollars are directed to services providing known benefits. Citizens and taxpayers should feel reassured that tax revenues are spent appropriately. Manufacturers and clinical researchers should increase their focus on generating more relevant and meaningful data.
Continuing along this path will present challenges. Opposition to Medicare's decision on CT colonography from specialty societies and manufacturers was strong, but the CMS stood its ground, and its decision was backed by several credible organizations. In the recent case of coronary CT angiography, however, the CMS was pressured to reverse its proposed decision to limit coverage to patients enrolled in studies designed to evaluate the procedure. The final decision to allow reimbursement was issued despite the conclusions of a federally funded technology assessment, the advice of the CMS's independent advisory committee, and the views of CMS staff members that the technology's benefits and harms were uncertain.5 Fortunately, the National Institutes of Health has recently funded a major clinical trial to determine whether this diagnostic test benefits patients.
The heightened emphasis on evidence will almost certainly continue as more people recognize that the old approach is unsustainable. The $1.1 billion for comparative-effectiveness research included in the American Recovery and Reinvestment Act underscores an emerging appreciation that we need better mechanisms for generating relevant evidence and for enabling patients, clinicians, and payers to use that evidence in decision making. The House and Senate reform bills would both provide long-term funding to support such research.
To be sure, important questions remain. How do evidence requirements vary among different categories of technology, and how can that evidence be generated most efficiently? When can Medicare make reasonable inferences from studies undertaken in non-Medicare populations? When is it reasonable to extrapolate from surrogate markers studied in randomized, controlled trials to longer-term outcomes? When and how should observational data and other nonexperimental evidence be used? When should technology be reassessed in light of new information?
Part of the solution will come from having a more transparent, timely, and participatory process, and Congress and the CMS have worked to improve matters in this regard.3 Part of the solution will also come from smarter design and implementation of clinical trials and better synthesis of evidence. The CMS should continue to explore ways to enact flexible coverage policies in order to tie payment to outcomes. The agency has experimented with a policy of “coverage with evidence development,” which enables Medicare to cover the use of promising technologies for patients enrolled in studies that will better determine a technology's risks and benefits.
A final issue pertains to the CMS's use of economic outcomes. The agency has excluded explicit consideration of cost-effectiveness from coverage decisions. But cost-effectiveness analysis could help the CMS to increase the value of the care it covers, and patients and clinicians will also increasingly need this information. We know from recent experience that discussions of cost-effectiveness in the United States can degenerate into emotional arguments about rationing and death panels, precluding serious public dialogue about how best to spend resources for health care. Federal policymakers will need to demonstrate leadership and courage if they are to join the many other countries, and some payers in the United States, who are already considering clinical and economic value to determine whether and how much to pay for health care services.
Financial and other disclosures provided by the authors are available with the full text of this article at NEJM.org.
This article (10.1056/NEJMp0912062) was published on January 20, 2010, at NEJM.org.
Source Information
From the Center for the Evaluation of Value and Risk in Health, Institute for Clinical Research and Health Policy Studies, Tufts Medical Center, Boston (P.J.N.); and the Center for Medical Technology Policy, Baltimore (S.R.T.).
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Criteria for making coverage decisions. Federal Register 42 CFR Part 405. (Accessed January 19, 2010, at http://fdsys.gpo.gov/fdsys/pkg/FR-2000-05-16/pdf/00-12237.pdf.)
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Neumann PJ ,Kamae MS ,Palmer JA . Medicare's national coverage decisions for technologies, 1999-2007. Health Aff (Millwood) 2008;27:1620-1631
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Dhruva SS ,Phurrough SE ,Salive ME ,Redberg RF . CMS's landmark decision on CT colonography -- examining the relevant data. N Engl J Med 2009;360:2699-2701
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Full Text | Web of Science | Medline
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