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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations
which commercial insurers will be considered. Additional information regarding which commercial insurers and policies will be developed within 12 months of the effective date of this rule. In order to demonstrate the potential impact on Medicare spending, we developed scenarios that illustrate the impact of implementing the three alternatives for defining reasonable and necessary. The number of NCDs and LCDs finalized in a given year can vary and the cost of items and services within the coverage decisions varies.
Further, while we reviewed coverage of items and services, we did not take into account unique Medicare rules regarding which type of providers/
clinicians may furnish certain services, place of service requirements, or payment rules. Our analysis is based on whether Medicare covered or noncovered an item or service and whether we could find coverage for that item or service by any commercial insurer.
Lastly, this impact analysis is based on the numbers of NCDs and LCDs finalized in 2020. See Table 2 below In 2020, CMS and the MACs finalized 3 NCDs and 31 LCDs. This number represents new LCDs in 2020 and made publically available via the Medicare Coverage Database. If more than one MAC jurisdiction issued an LCD on the same item or service with the same
coverage decision, only 1 of the LCDs was included in the count.
Of the NCDs finalized in 2020, all 3
resulted in expanded national Medicare coverage. Because none of those NCDs resulted in non-coverage we did not evaluate whether commercial insurers also covered. Therefore, based on 2020
data for NCDs only, the impact would be $0 for all three alternatives.
Of the 31 LCDs, 27 provided Medicare positive coverage and 4 resulted in noncoverage. For those items and services non-covered we identified 3 of those items and services were covered in at least 1 commercial insurer policy. For these non-covered items and services we can establish that the possible range of the cumulative cost of covering them could be from $0 to $3.4 billion for a single year based on price and approximate Medicare beneficiary utilization. Because our analysis looked for any commercial insurer that covered the item or service, the cost may be less when utilizing commercial insurer polices that represent a majority of covered lives CMS will publish draft guidance explaining its methodology within 12 months of the effective date of this rule. In addition, even if a commercial insurer covers an item or service, for the final rule it is not a requirement to automatically adopt the commercial insurers coverage.
Therefore, not all items and services that are non-covered by Medicare and
covered by a can be assumed covered under this rule. Rather, commercial insurer coverage is a factor that CMS
will take into account as part of the body of evidence in determining coverage through the NCD and LCDs processes. Because not all commercial insurer positive coverage will necessarily transfer to Medicare coverage and because CMS still to define which types of commercial insurers based on majority of covered lives are relevant, we believe that commercial insurer coverage impact is likely much smaller, closer to 1525%
of $3.4 billion, that is, $51$880
million. Under the third alternative which requires Medicare to rely on any coverage by a commercial insurer in order to achieve Medicare coverage, the cost would much higher. Using the same data for the first 2 alternatives, there were 4 LCDs that resulted in Medicare non-coverage, and 3
commercial insurers covered the item or service. Assuming that for this third assumption that Medicare must cover these items and services, the cost to the program could be at least $3.4 billion for a year for the commercial insurer as sole determinant of coverage. Because our analysis looked for any commercial insurer that covered the item or service, the cost may be less when utilizing commercial insurer polices that represent a majority of covered lives.

TABLE 2ILLUSTRATED IMPACT FOR THE MEDICARE PROGRAM BY DEFINITION OF REASONABLE AND NECESSARY
Estimated change in Medicare costs for the alternatives considered No change not codifying a definition
khammond on DSKJM1Z7X2PROD with RULES

Coverage Determinations NCDs and LCDs

Regulatory alternatives to this final rule for MCIT were to combine Medicare coverage with clinical evidence development under section 1862a1E of the Act, to take no regulatory action at this time, or to adjust the duration of the MCIT
pathway. Combining coverage with clinical evidence development would have met the E.O. 13890 overarching goal of beneficiary access to breakthrough devices. However, this alternative did not meet the other E.O.
13890 aims of minimizing time between FDA market authorization and Medicare coverage and wide availability. The timing of coverage would depend upon
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the manufacturer being able to initiate a clinical study and the wide availability of coverage could be an issue if providers did not have the infrastructure necessary to participate in the clinical study. The pathway had the benefit of reducing the potential for patient harm by ensuring Medicare had clinical evidence while providing coverage. CMS chose to not to pursue combining coverage with evidence development for breakthrough devices because we wanted to meet the timing and wide availability aims of E.O.
13890.
CMS also considered taking no regulatory action and trying to leverage
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$0

Codified definition
$51880
million.

Commercial insurer coverage as sole determinant $3.4+ billion
the existing Medicare coverage pathways or proposing subregulatory policies to achieve the streamlined coverage process described in E.O.
13890. We could not develop subregulatory policies to achieve the desired national coverage and access envisioned in E.O. 13890 because, as described in this preamble, the existing coverage pathways do not consistently provide swift, national beneficiary access to innovative devices. As discussed elsewhere in the preamble, the nature of the problem being addressed by this final rule is a potential delay between a milestone such as FDA market authorization and
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