Congress has long sought to tap into the expertise of private industry in managing Medicare. The 1965 law that created the federal program called for using administrative contractors outside of the federal government to process payments. But over the last half century, the role of these contractors has changed and in some cases expanded, with Medicare giving certain MACs a larger role in deciding what kinds of items and services will be covered.
For example, decisions about blood sugar meters, oxygen equipment, and other items and services that people use at home, a category Medicare calls durable medical equipment (DME), are heavily influenced by Noridian, a company owned by the parent company of Blue Cross Blue Shield of North Dakota, and CGS, owned by Blue Cross Blue Shield of South Carolina. Blue Cross Blue Shield's Palmetto MAC runs the Molecular Diagnostics (MolDX) program that shapes nationwide policy about payments for certain advanced tests.
In many other cases, MACs' staff make decisions about items and services on a case-by-case basis. These choices can be thought of as the base of the pyramid of CMS' approach to covering devices and tests, said Robert Wanerman, of the law firm Epstein Becker Green and a former Health and Human Services Department attorney, who specialises in Medicare coverage. Sometimes MACs, which cover different regions of the country, issue what are called local coverage decisions or LCDs. For example, several MACs have issued these determinations for products like surgically implanted tongue stimulators used to treat certain cases of sleep apnea. The decisions spell out terms for the coverage of these devices, including which patients are eligible and the types of surgeons who can implant the devices.
In rare instances, CMS officials will make a decision through a process known as a national coverage decision, or NCD. These are similar to local coverage determinations, in terms of seeking to ensure safe and appropriate use of devices. But CMS tends to focus many of its national coverage decisions on emerging technologies, as happened with its approach to CAR-T cancer therapy (see page 40).
There are about 37 local coverage decisions made per year, compared with three to four NCDs, CMS' Fleisher said at a 2022 event hosted by the Duke-Margolis Center for Health Policy.
Congress has mandated more transparency around LCD decisions under a law that directs Medicare administrative contractors to provide more details about the reasons for their decisions, including the medical evidence they considered in making them.
NCDs are complex undertakings, involving a public comment period and extensive reviews of published research. In exceptional cases, CMS convenes meetings of the Medicare Evidence Development and Coverage Advisory Committee (MEDCAC) to advise on these coverage decisions.
Company officials considering strategies for obtaining Medicare coverage usually determine whether their items and services can be covered under an already existing decision by the MACs, which could make it easier to obtain coverage. In some cases, a product may fall under an LCD or an NCD. In others, companies will need to seek coverage on a case-by-case basis.
"We have to look at each item or service and try to figure out, where does it fit within this ecosystem?" Wanerman said.