Committee on Ways and Means, Health Subcommittee, 9-25-01, Statement for the Record

Statement of the Advanced Medical Technology Association

AdvaMed is pleased to provide this testimony on behalf of our member companies and the patients and health care systems we serve around the world. AdvaMed is the largest medical technology trade association in the world, representing more than 1100 medical device, diagnostic products, and health information systems manufacturers of all sizes. AdvaMed member firms provide nearly 90 percent of the $68 billion of health care technology products purchased annually in the U.S. and nearly 50 percent of the $159 billion purchased annually around the world.

AdvaMed would like to thank Chairwoman Johnson, Ranking Member Stark, and the members of the Subcommittee for their bipartisan effort to make the Medicare program more efficient and effective for providers and Medicare beneficiaries. Medicare is a critical program for some 40 million Americans, and we greatly appreciate the way that the Committee has reached out to the health care community to develop legislation to make the program easier to understand, comply with, and participate in.

Contracting Reform

While some reforms to the contracting process are warranted, AdvaMed strongly believes that any reforms that would result in changes in local carriers or consolidated areas for carriers should maintain a process for making coverage decisions locally, and for securing input from the local medical community.

AdvaMed strongly supports Medicare’s local coverage process as a vital route for timely patient access to the vast majority of innovative medical technologies. The local coverage process offers an important alternative to national coverage decision-making by the Centers for Medicare and Medicaid Services (CMS), which runs Medicare and oversees local contractors. Currently, Medicare patients face delays of 15 months to five years or more in gaining access to technologies at the national level.

Consolidation of the number of local Medicare contractors that make coverage decisions would severely constrict or eliminate the local coverage route and create significant new delays in patient access to important new medical technologies and services. AdvaMed appreciates the work of Congress and CMS to examine Medicare contractor operations in areas such as accountability and performance incentives. However, as Congress addresses this issue, we urge it to avoid steps that would undermine the local coverage process as a route to early patient access to new medical technologies.

The local coverage process provides the flexibility and timeliness needed to keep pace with rapid advances in medical technology. Current flexibility at the local level very efficiently incorporates the majority of new procedures and technologies into the existing Medicare payment systems. This flexibility includes:

timely access to local contractor decision-makers
an active relationship with the local medical community and understanding of local medical practice, and
the ability to make case-by-case determinations.

Local decision-making authority provides Medicare beneficiaries access to new procedures and technologies without having to wait until these innovations have been disseminated nationally.

A recent report by the Lewin Group, a prominent health care policy research firm, also highlighted the value of the current local Medicare coverage process. According to the Lewin Group, “the local coverage process remains a critical avenue for obtaining coverage” for the vast majority (90%) of new technologies and services.

Preservation of the local coverage process is particularly important, the Lewin Group found, because it offers a way for patients to gain access to many innovative technologies that otherwise would encounter significant coverage delays at the national (CMS) level. Lewin cites the example of a breakthrough technology in women’s health, dual x-ray absiorptiometry, which is used to diagnose osteoporosis. It took Medicare more than seven years to cover this technology at the national level. However, coverage decisions by local Medicare contractors during that time enabled many women to gain access to this technology who otherwise would not have been able to receive it.

Recommendations

AdvaMed strongly believes that, despite any contracting reforms, a process for making coverage decisions locally, and for securing input from the local medical community (through the local coverage advisory committee) should be maintained.

Local authority to make decisions. One approach to maintaining local decision-making is to require contractors to grant local physicians (such as state medical directors) direct authority to make coverage decisions, in consultation with their peers in the local medical community. This includes the authority to make claims-level case-by-case decisions in a timely manner.
Local carrier advisory committees (CACs). Local CACs should be continued in each state to assure that local medical review policy reflects the consensus of the local physician community. Changes in local coverage decisions should be subjected to the normal review and comment process with the local CAC.
Local codes. Occasionally, to implement a local decision, it may be necessary to issue a new temporary local code, and so we recommend that contractors continue to have the authority to issue and recognize local codes.
Accessibility and Responsiveness. Contractors should require their medical directors to be readily accessible and responsive to local physicians, providers, beneficiaries, and manufacturers, and to continue to respond and render decisions in a timely manner.
Open Participation in Decision-making. Last November, CMS issued a program memo instructing contractors to post their draft coverage decisions on their websites for comment. We suggest extending this to include additional information earlier in the process, similar to the national level, where the local medical director would post to the website the intent to make a coverage decision, what information will be reviewed, the names of the members of the coverage advisory committees who will be reviewing the information, and acceptance of input from interested parties during the various stages of this process. This would apply to any changes in local coverage policy, including those that may result from a change or consolidation of contractors.

Conclusion

AdvaMed thanks the Subcommittee members again for their collaborative efforts to improve and strengthen the Medicare program. We look forward to working with this Committee, the Congress and the Administration on this important legislation, as well as additional ways to improve the quality of care available to seniors through Medicare and foster the delivery of innovative therapies for patients.