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Enhancing efficiency: step by step.

HCFA's final rule delineating the relationship between its processes for technology assessment and coveraged decision making follows by two and one-half years publication of the proposed rule. There are four important changes or clarifications of HCFA's existing process, the most significant of which will be the addition of cost-effectiveness as a criterion for coverage. This criterion will be added to the existing criteria of "safe and effective," "appropriate," and "noninvestigational." HCFA will reiterate in the final rule that cost effectiveness will be applied only in special circumstances where it is particularly warranted. Notwithstanding this selective application, inclusion of cost effectiveness is significant in that HCFA becomes the first major third-party payer to explicitly state that cost effrectiveness in an integral component of its coverage decision-making process. In the past, high cost has served to signal to payers the need for a closer look at the demonstrated safety and effectiveness of technology.

The inclusion of cost effectiveness as a criterion for coverage by HCFA had been widely anticipated by the pharmaceutical and medical devices industries, which expect private payers to follow HCFA's lead and add cost effectiveness as a determinant in their processes. Many of these companies view the quest for affirmative coverage decisions as being as important and challenging as the quest for FDA approval to market. As a result, many of these companies have integrated cost-effectiveness analysis (CEA) early on the clinical trial process.

While the increasing import of CEA in health care decision making is the "big news," more subtle changes are worth noting. In the final rule, HCFA will explicitly introduce the notion of relative effectiveness into its process. The criterion of "appropriateness" will be expanded to require that a technology be demonstrated to be as beneficial as an existing appropriate alternative when HCFA determines that such a comparison is in order. This expands the definition of "appropriateness" from the previously published one, which stipulated that the setting be commensurate with the patient's medical needs and that health care providers be qualified to provide the service by virtue of their education, training, experience, certification, or licensure. For drugs and devices, this extends the data requirements for affirmative coverage beyond the scope of the FDA's authority to base an approval decision for a new drug or device on its effectiveness without consideration of other existing medical interventions. The coverage criteria employed by the national Blue Cross/Blue Shield Association have applied the concept of relative effectiveness for a number of years by requiring a new technology to demonstrate a health outcome at least comparable to that provided by existing technologies.

HCFA will state in the final rule that general acceptance by the medical community of the safety and effectiveness of a technology will satisfy the criterion of "safe and effective." HCFA will emphasize, however, that it still accords the greatest weight to "authoritative evidence." Finally, HCFA has indicated that it may contract with outside individuals or organizations to review coverage issues and conduct evaluations either in whole or in part. This stipulation results in part from the continued criticism of the time required (2.4 years on average) for the Office of Health Technology Assessment to respond to a HCFA request for an evaluation.

HCFA will also reaffirm its policy that clearance by the FDA of a device for marketing will not necessarily lead to coverage of that device under Medicare. Indeed, HCFA views the granting of such clearance as satisfying only the criterion of "safe and effective." This stance relates to the view widely held among payers that the requirements for demonstration of safety and effectiveness of a device are not as stringent as those for drugs.

Safe Medical Devices Act

Congress has responded to this sentiment by passing the Safe Medical Devices Act of 1990, which seeks to tighten the requirements for FDA approval of devices for marketing, especially through the 510k process. The major components of the Act are increased data requirements for devices submitted under a 510k, requirement for increased postmarketing surveillance, establishment of registries for some devices, and more rigorous reporting of serious adverse events associated with the use of devices.

Since passage of the Medical Device Amendments in 1976, manufacturers have been able to market new devices through a 510k provision by demonstrating that the device has the same intended use and the same technical characteristics as a device approved before May 28, 1976. FDA is presently developing regulations to implement the new legislation, which enables the agency to require that summaries of available data on safety and effectiveness be submitted with all 510k applications. Manufacturers will have to provide a summary of all adverse safety and effectiveness related to the use of the preamendment device and of the device for which the 510k is being filed. FDA may require the manufacturer to submit the actual data. Thus, Congress has mandated that, where the preamendment device is a Class III device, FDA give direct consideration to questions regarding safety and effectiveness. The FDA had raised such questions prior to passage of the Safe Medical Devices Act, but now the law demands such consideration.

The legislation also mandates that FDA require postmarketing surveillance for devices that may cause serious injury or death or that are life-supporting. FDA may also require postmarketing surveillance if it deems it necessary to protect the public health. Somewhat related to the requirement for postmarketing surveillance is the mandate to establish tracking systems or registries for devices the failure of which would be likely to have serious adverse health consequences; for permanently implantable devices; for devices that are life-sustaining or -supporting; and for any other devices that the FDA may identify. Finally, FDA will require user facilities to report any death, serious injury, or serious harm associated with the use of a medical device within 10 days of its occurrence.

National Program

The emphasis on the integration of formal, rigorous technology assessment into the coverage decision-making process has prompted recent discussion among major commercial insurers, HMOs, Blue Cross/Blue Shield plans, and their respective trade associations regarding the establishment of a national technology assessment program. The groups involved are concerned that organizations involved in coverage decision making unnecessarily duplicate each others' activities in technology assessment and that the resultant coverage decisions are often inconsistent across companies. This inconsistency has resulted in a series of adverse court decisions. Thus, a cooperative technology assessment program could be established under contract to outside groups who would then develop and provide evaluation information to payers. Many issues need to be resolved before such a program becomes a reality, not the least of which are antitrust considerations and whether the program would be located in the public or the private sector. The general discussion, however, reflects the burgeoning interest in the application of technology assessment to the formulation of public policy in health care.
COPYRIGHT 1991 American College of Physician Executives
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Copyright 1991, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:medical law
Author:McGivney, William T.
Publication:Physician Executive
Date:Jul 1, 1991
Words:1140
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