[Federal Register Volume 60, Number 22 (Thursday, February 2, 1995)]
[Notices]
[Pages 6537-6547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-2559]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[BPD-812-NC]
RIN 0938-AG83
Medicare Program; Criteria for Medicare Coverage of Lung
Transplants
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice with comment period.
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SUMMARY: This notice announces a Medicare national coverage decision
for lung and heart-lung transplantations. Lung transplantation refers
to the transplantation of one or both lungs from a single cadaver
donor. Heart-lung transplantation refers to the transplantation of one
or both lungs and the heart from a single cadaver donor.
We have determined that, under certain circumstances, lung
transplants and heart-lung transplants are a medically reasonable and
necessary service when furnished to patients with progressive end-stage
pulmonary or cardiopulmonary disease and when furnished by Medicare
participating facilities that meet specific criteria, including patient
selection criteria.
DATES: This notice is effective February 2, 1995. For information on
how this notice effects Medicare payment for lung and heart-lung
transplants, see sections E and F of this notice.
ADDRESSES: Applications. A facility seeking Medicare coverage and
payment for lung transplantation should mail 10 copies of the
application to the address below in a manner which provides the
facility with documentation that it was received by us: Director,
Office of Hospital Policy, Room 189 East High Rise, 6325 Security
Boulevard, Baltimore, Maryland 21207.
Comments. Comments will be considered if we received them at the
appropriate address, as provided below, no later than 5 p.m. on April
3, 1995.
Mail written comments (1 original and 3 copies) to the following
address: Health Care Financing Administration, Department of Health and
Human Services, Attention: BPD-812-NC, P.O. Box 26676, Baltimore, MD
21207.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, DC 20201, or
Room 132, East High Rise Building, 6325 Security Building, Baltimore,
MD 21207.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code BPD-812-NC. Comments received timely will be available for
public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's offices at 200 Independence Avenue, SW., Washington,
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(phone: (202) 690-7890).
If you wish to submit comments on the information collection
requirements contained in this rule, you may submit comments to: Office
of Information and Regulatory Affairs, Office of Management and Budget,
Room 3001, New Executive Office Building, Washington, DC 20503, Attn:
Allison Herron Eydt, HCFA Desk Officer.
FOR FURTHER INFORMATION CONTACT:
Claude Mone, (410) 966-5666.
SUPPLEMENTARY INFORMATION:
I. Background
Administration of the Medicare program is governed by the Medicare
law, title XVIII of the Social Security Act (the Act). The Medicare law
provides coverage for broad categories of benefits, including inpatient
and outpatient hospital care, skilled nursing facility (SNF) care, home
health care, and physicians' services. It places general and
categorical limitations on the coverage of the services furnished by
certain health care practitioners, such as dentist, chiropractors and
podiatrists, and it specifically excludes some categories of services
from coverage, such as cosmetic surgery, personal comfort items,
custodial care, routine physical checkups, and procedures that are not
reasonable and necessary for diagnosis or treatment of an illness or
injury.
The Act also provides direction as to the manner in which payment
is made for Medicare services, the rules governing eligibility for
services, and the health, safety, and quality standards to be met in
institutions furnishing services to Medicare beneficiaries. The
Medicare law does not, however, provide an all-inclusive list of
specific items, services, treatments, procedures, or technologies
covered by Medicare. Thus, except for the examples of durable medical
equipment in section 1861(n) of the Act, and some of the medical and
other health services listed in section 1861(s) and 1862(a) of the Act,
the Act does not specify medical devices, surgical procedures, or
diagnostic or therapeutic services that should be covered or excluded
from coverage.
The intention of the Congress, at the time the Medicare Act was
enacted in 1965, was that Medicare would provide health insurance to
protect the elderly or disabled from the substantial costs of acute
health care services, principally hospital care. The program was
designed generally to cover services ordinarily furnished by hospitals,
SNFs, and physicians licensed to practice medicine. The Congress
understood that questions as to coverage of specific services would
invariably arise and would require specific coverage decisions by those
administering the program. It vested in the Secretary the authority to
make those decisions.
Section 1862(a)(1)(A) of the Act prohibits payment for any expenses
incurred for items or services ``which are not reasonable or necessary
for the diagnosis or treatment of illness or injury or to improve the
functioning of a malformed body member.'' We have interpreted this
statutory provision to exclude from Medicare coverage those medical and
health care services that have not been demonstrated by acceptable
clinical evidence to be safe and effective. Effectiveness in this
context is defined as the probability of benefit to individuals from a
medical item, service, or procedure for a given medical problem under
average conditions of use, that is, day-to-day medical practice.
To date, the Medicare program has not issued a national coverage
policy on lung or heart-lung transplantation. In the absence of
national coverage policy, the contractors that process Medicare claims
are authorized to develop Medicare coverage policy for their service
area using medical literature, the advice of medical consultants and
local medical societies, and their private line business practices.
Several contractors have determined lung transplantation to be a
Medicare covered service prior to this notice, and a small number of
contractors have covered heart-lung transplant. However, most of these
contractors do not have a clearly defined coverage policy that would
allow a beneficiary to know in advance if the procedure would be
covered. Rather, they review each case individually after it has
occurred and determine coverage without published
[[Page 6538]]
criteria. Other Medicare contractors do not cover the procedure at all.
Thus, there is inconsistency within the nation.
On January 30, 1989, we published a proposed rule in the Federal
Register, at 54 FR 4302, which describes our process for formulating
new national coverage decisions and reevaluating existing decisions. As
discussed in that notice, we sometimes rely on the Office of Health
Technology Assessment (OHTA) in the Agency for Health Care Policy and
Research (AHCPR) of the Public Health Service (PHS) for medical
consultation and advice. We also rely on other PHS components, such as
the National Institutes of Health.
The AHCPR evaluates the risks, benefits, and clinical effectiveness
of new, existing, or unestablished medical technologies. The assessment
process includes a comprehensive review of the medical literature and
emphasis broad participation from within and outside the Federal
government. The OHTA conducted an assessment of lung transplantation in
1991 and concluded that experience has shown that lung transplants can
provide adequate pulmonary function for extended periods in some
patients with otherwise fatal lung disease. In addition, the National
Heart, Lung, and Blood Institute (NHLBI) in the National Institutes of
Health, Public Health Service, reported to us in 1993 that lung
transplantation in carefully selected patients and by experienced teams
yields significant increases in survival with reasonable quality of
life.
We believe it is appropriate in the face of these findings to issue
a national policy rather than to maintain the current system of
inconsistency among the contractors. In addition, we believe it is more
beneficial to develop a national policy where facilities and
beneficiaries will know in advance the criteria and facilities covered
rather than to maintain the system in many areas of making coverage
decisions on a case by case basis without clearly defined criteria.
II. Provisions
We have carefully reviewed the reports and recommendations of the
Office of Health Technology Assessment and the National Heart, Lung,
and Blood Institute. Based on these reports, the opinions of our
medical advisors, consultations with PHS, and review of the medical
literature, consultation with medical advisors and reconsultation with
NHLBI since the OHTA assessment, we are establishing national coverage
of lung transplant under the Medicare program, under the authority of
section 1862(a)(1)(A) of the Act.
Sections 1869(b)(3)(B) and 1871(a)(2) of the Act specifically
exempt national coverage decisions from the notice-and-comment
rulemaking process ordinarily required by section 553 of the
Administrative Procedure Act. Despite this authority, we have indicated
that we would use the prior comment process in discontinuing coverage
of procedures. However, we do not believe that the establishment of
this policy is a discontinuation of coverage. Rather, we view this
policy as establishment of national coverage policy where no such
policy previously existed. Consequently, we are proceeding with a final
notice in this regard. Nonetheless, we wish to receive comments on
these criteria within 60 days of the publication of this notice.
Medicare will cover lung transplants for beneficiaries with
progressive end-stage pulmonary disease and when performed by
facilities that (1) make an application to HCFA for approval as a lung
transplant facility under the criteria established by this notice; (2)
supply documentation showing their satisfaction of compliance with the
criteria discussed later in this notice; and (3) are approved by HCFA
under these criteria. Medicare will also cover lung transplantation for
end-stage cardiopulmonary disease when it is expected that transplant
of the lung will result in improved cardiac function.
In addition, Medicare will also cover heart-lung transplants for
beneficiaries with progressive end-stage cardiopulmonary disease when
they are provided in a facility that has been approved by Medicare for
both heart and lung transplantation. The NHLBI's studies of this
procedure have persuaded us that, though provided infrequently, this
procedure is sometimes the appropriate intervention for specific
patients. We believe the procedure may be safely and effectively done
in a facility that is Medicare approved for both heart and lung
transplantation. We are not establishing specific patient selection
criteria for the procedure; however, we expect that facilities that
perform heart-lung transplants will develop and use appropriate
criteria.
Organs transplanted as a heart-lung procedure should be included in
the volume and survival statistics for each organ. Thus, facilities may
meet the volume and survival criteria delineated in this notice through
both lung and heart-lung transplant procedures.
A. Specific Clinical Conditions Required for Lung Transplantation
Coverage
Medicare will cover lung transplants only for those beneficiaries
who are diagnosed as having progressive end-state pulmonary disease
(or, in some instances, end-stage cardiopulmonary disease) and when the
procedure is performed in a participating facility that meets specific
criteria.
Note: See effective date section for further explanation.
We are requiring that facilities meet specific criteria in areas
such as patient selection, patient management, commitment, plans,
experience and survival rates, maintenance of data, organ procurement,
laboratory services, and billing. Facilities must have patient
selection criteria for determining suitable candidates for lung
transplants.
B. Facility Requirements
Under current Medicare policies, a procedure can be considered
medically reasonable and necessary only if its safety and efficacy have
been demonstrated adequately by scientific evidence, such as controlled
clinical studies, and it has been generally accepted by the medical
community. Normally, surgical procedures and medical regimens, although
requiring competent, skilled personnel, are of a nature that they can
be performed successfully on most patients who require them in most
facilities that meet the Medicare conditions of participation for
hospitals in 42 CFR part 482. In the case of lung transplantation,
however, we believe many other factors are related to the safety and
efficacy of the procedure. Thus, coverage of lung transplants requires
detailed criteria to identify the context in which lung
transplantations can be considered medically reasonable and necessary.
We are covering only those lung transplantations performed in
facilities that demonstrate good patient outcomes (for example,
initially a 1-year survival rate of 69 percent for patients receiving a
lung transplant) and compliance with the facility criteria. While we
believe that survival rates are important measures of successful
outcomes, we do not believe that they can serve as the only criteria a
center has to meet in order to be approved for Medicare payment for
lung transplants. Once a facility applies for approval under these
criteria and is approved as a lung transplant facility for Medicare
purposes, it is obliged to report immediately to HCFA any events or
changes that would affect its approved status. Specifically, a facility
is required to report, within a reasonable period of time, any
significant decrease in its experience level or survival rates, the
departure of key members of the transplant team or any other major
[[Page 6539]]
changes that could affect the performance of lung transplants at the
facility. Changes from the terms of approval may lead to prospective
withdrawal of approval for Medicare coverage of lung transplants
performed at the facility.
A discussion of the criteria that we are requiring facilities to
meet in order to receive Medicare payment for lung transplantation
follows. A very similar approach is being used in determining
eligibility of heart and liver transplant facilities and has proved
very successful.
1. Patient Selection Criteria
The NHLBI of the National Institutes of Health, Public Health
Service, has reported to us that lung transplantation in carefully
selected patients and by experienced teams yields significant increases
in survival with reasonable quality of life. Therefore, we believe that
careful patient selection for lung transplants, as suggested by NHLBI,
is essential to achieve optimal results. We require that facilities
have written patient selection criteria that they follow in determining
suitable candidates for lung transplants, such as the following:
a. A patient is selected based upon both a critical medical need
for transplantation and a strong likelihood of successful clinical
outcome.
b. A patient who is selected for a lung transplant has
irreversible, progressively disabling, end-stage pulmonary disease (or,
in some instances, end-stage cardiopulmonary disease).
c. The facility has tried or considered all other medically
appropriate medical and surgical therapies that might be expected to
yield both short- and long-term survival comparable to that of
transplantation.
d. Plans for long-term adherence to a disciplined medical regimen
are feasible and realistic for the individual patient.
Many factors must be recognized as exerting an adverse influence
upon the patient's outcome after transplantation. The following adverse
factors are among those that should be considered in selecting patients
for transplantation:
Primary or metastatic malignancies of the lung.
Current significant acute illness that is likely to
contribute to a poor outcome if the patient receives a lung transplant
or current use of mechanical ventilation for more than a very brief
period.
Significant or advanced heart, liver, kidney,
gastrointestinal or other systemic or multi-system disease that is
likely to contribute to a poor outcome after lung transplantation.
Significant extra-pulmonary infection.
Chronic pulmonary infection in candidates for single lung
transplantation.
Continued cigarette smoking or failure to have abstained
for long enough to indicate low likelihood of recidivism.
Systemic hypertension that requires more than two drugs
for adequate control.
Cachexia, even in the absence of major end-organ failure.
Obesity.
Previous thoracic or cardiac surgery or other bases for
pleural adhesions.
Age beyond that at which there has been substantial
favorable experience.
Chronic corticoid therapy that cannot be tapered to a low
dose (10 mg prednisone per day) or discontinued prior to
transplantation.
A history of behavior pattern or psychiatric illness
considered likely to interfere significantly with a disciplined medical
regimen.
Except for the matter of primary or metastatic malignancies of the
lung, all these factors were explicitly enumerated in the National
Heart, Lung, and Blood Institute memorandum upon which we primarily
relied in developing this notice. Primary or metastatic malignancies of
the lung are implicit in the National Heart, Lung, and Blood
Institute's listing of systemic and multi-system diseases as an adverse
factor. We are explicitly listing primary or metastatic malignancy of
the lung to emphasize it should be an adverse factor in patient
selection. We note that we have received a report which surveyed major
lung transplant facilities regarding, among other things, appropriate
patient selection criteria for lung transplants. The results of the
survey indicate Medicare coverage criteria for lung transplantation
should include patient selection criteria that exclude malignancies.
The American College of Cardiology believes that malignancy (other than
basal cell carcinoma) is an absolute contraindication for heart-lung
transplant. (See Health Technology Assessment ``Institutional and
Patient Criteria for Heart/Lung Transplantation,'' Agency for Health
Care Policy and Research). In addition, a New England Journal of
Medicine article by Steven E. Weinberger, M.D. (Volume 328, Number 20,
May 20, 1993) indicated that lung transplant patients ``* * * should
not have an underlying cancer or other systemic illness,'' and that
same view was reflected in a survey of lung transplant programs.
These criteria take into consideration advances in the
transplantation field and reflect discussions with experts in pulmonary
medicine, infectious diseases, transplantation, surgery, biostatistics,
and other experts. We realize that the indicators to measure the safety
and efficacy of lung transplantations will continue to evolve. Thus, we
may need to update the criteria periodically to recognize further
developments in lung transplantation technology. We intend to re-
evaluate the criteria through survey and data gathering within the next
3 years.
2. Patient Management
A facility must have adequate patient management plans and
protocols that include the following:
Therapeutic and evaluative procedures for the acute and
long-term management of a patient, including commonly encountered
complications. The facility must state the basis for confidence in
these plans.
Patient management and evaluation during the waiting and
immediate post-discharge, as well as in-hospital, phases of the
program.
Long-term management and evaluation, including education
of the patient, liaison with the patient's attending physician, and the
maintenance of active patient records for a period of at least 5 years.
3. Commitment
A facility must make a sufficient commitment of resources and
planning to the lung transplant program to carry through its
application. Indications of this commitment should include a commitment
by the facility to the lung transplant program at all levels and which
is broadly evident throughout the facility. (A lung transplantation
program requires a major commitment of resources, which may
intermittently include many other departments as well as the principal
sponsoring departments.)
The facility must have expertise in medical, surgical, and other
relevant areas, particularly thoracic surgery, vascular surgery,
anesthesiology, immunology, infectious diseases, pulmonary diseases,
pathology, radiology, nursing, blood banking, and social services. The
facility must identify individuals in these areas in order to achieve
an identifiable and stable transplant team. Responsible medical/
surgical members of the team must be board certified or eligible to
take the boards in their respective disciplines or have, in the opinion
of the non-Federal experts discussed in section II.D. of this notice,
demonstrated
[[Page 6540]]
competence irrespective of board status. We believe board eligibility
is required to assure high quality care.
The facility's commitment should also be evident by the following:
The component teams must be integrated into a
comprehensive team with clearly defined leadership and corresponding
responsibility.
The anesthesia service must identify a team for
transplantation that must be available at all times.
The infectious disease service must have both the
professional skills and laboratory resources needed to discover,
identify, and manage the complications from a whole range of organisms,
may of which are uncommonly encountered.
The nursing service must identify a team or teams trained
not only in hemodynamic support of the patient, but also in the special
problems of managing immunosuppressed patients.
Pathology resources must be available for studying and
reporting promptly the pathological responses to transplantation.
Adequate social service resources must be available.
Mechanisms must be in place for managing the lung
transplant program that assure that patient selection criteria are
consistent with those set forth in the facility's written patient
selection criteria and that the facility is responsible for the ethical
and medical considerations involved in the patient selection process
and application of patient selection criteria.
Adequate plans exist for organ procurement meeting legal
and ethical criteria, as well as yielding viable transplantable organs
in reasonable numbers.
4. Facility Plans
The facility must have overall facility plans, commitments, and
resources for a program that will ensure a reasonable concentration of
experience; specifically, 10 or more lung transplantation cases per
year in patients who have end-state pulmonary or cardiopulmonary
disease. The facility must show that this level of activity is feasible
and likely to continue on the basis of plans, commitments, and
resources.
5. Experience and Survival Rates
The facility must demonstrate experience and success with a
clinical organ transplantation program involving immunosuppressive
technique. The facility must have an established lung transplantation
program with documented evidence of 10 or more patients, who have end-
stage pulmonary or cardiopulmonary disease, in each of the two
preceding 12-month periods. The facility can use single lung, double
lung and heart-lung transplant patients in meeting this criterion. The
Medicare cardiac and liver transplant criteria require a minimum volume
of 12 transplants annually. However, based on the recommendation of the
National Heart, Lung, and Blood Institute, we have established 10 cases
per year as the basic standard for a lung transplant program.
We are establishing a minimum volume criterion because we believe a
significant number of transplants is generally needed to maintain the
entire transplant team commitment and skills to assure that procedures
are of appropriate quality and safety. Our own research in heart
transplantation has documented improved survival associated with
Medicare approved facilities over those that do not meet the Medicare
criteria, which includes minimum volume thresholds. In addition,
Jeffrey Hosenpud, M.D. et al., reported in the Journal of the American
Medical Association (volume 271, No. 23, June 15, 1994, page 1844) on
the effect of transplant center volume on cardiac transplant outcome.
These researchers found increased risk of mortality in centers
performing fewer than 9 cardiac transplants per year. Further, research
conducted by Erick B. Edward, et al and presented in the Fifteenth
world Congress of the Transplantation Society demonstrated that, after
correcting for patient mix covariates, patients mortality following
liver transplantation in the United States is a function of center
transplant volume. Such articles confirm our view that volume generally
is a strong factor in predicting survival. Although we are not aware of
published studies such as those with heart and liver transplants,
empirically demonstrating that volume is associated with successful
outcome and team proficiency in lung transplantion, we believe it is
reasonable to assume a similar relationship would exist for lung
transplants.
We have established the minimum volume of 10 transplants per year
for lungs based on the fact that there are fewer lungs than hearts and
livers available for transplanation. The NHLBI recommended 10
transplants as an appropriate number.
We have contacted a large sample of active lung transplant programs
to gather data regarding the volume of transplants performed over the
past three years. In arraying the results of these data, we found that
the vast majority of centers that are designated as lung transplant
centers perform a very small number of procedures. In fact, a
significant number of these centers performed less than two transplants
annually. Over 80 percent of the total transplants in the data were
performed in those centers that exceeded the volume thereshold
recommended by NHLBI. Thus, although a relatively small number of the
total facilities designated to perform lung transplants by the organ
Procurement and Transplanation Network are expected to qualify
initially (approximately 15 of 77), we expect the facilities that are
approved initially to perform over 80 percent of the lung transplants.
Thus, we do not anticipate adverse impact on beneficiary access as a
result of this criterion.
Based on the results of this analysis, we believe that 10 is a
reasonable threshold for volume criteria. However, we welcome comments
during the comment period as to the appropriateness of the number.
Further, as we discuss later, exceptions to the facility criteria,
including the number of persons who received transplants, may be
warranted if there is justification. However, as a general matter, we
believe less than 10 transplants a year is not sufficient to maintain
the standard of performance needed for approval.
Survival rates may be influenced by many factors including random
chance and patient selection. However, most authorities agree that a
patient who is not free of adverse prognostic factors warrants lung
transplantation only if he or she has a reasonable prognosis and the
donor lung cannot be used in a patient who is a good candidate with at
least a moderately urgent need and who is in reasonable geographic
proximity. Based on data from the NHLBI report for the 996 patients
receiving lung transplants in the United States prior to January 1,
1993, Kaplan-Meier actuarial survivals at 1, 2, and 3 years are 72
percent, 66 percent, and 63 percent, respectively. For patients
receiving a single lung transplant (669 patients), and sequential
bilateral transplantation of two lungs (161 patients), survival data
are similar--73 percent, and 75 percent, respectively, at 1 year, and
67 percent and 71 percent at 2 years. With the two lungs transplanted
while joined (``en bloc''), results seem less favorable, with 63
percent and 57 percent 1 and 2-year survivals. When all lung and heart-
lung data are aggregated, the U.S. experience for 1,287 patients (1987
through 1992) is 69 percent, 62 percent and 59 percent actuarial
survival at 1, 2, and 3 years, respectively.
[[Page 6541]]
Since we will be covering single, double and heart-lung transplants
and collecting data for all these types of transplants in evaluating
volume and survival statistics for applicant hospitals, we believe that
we should use the NHLBI reported aggregate survival. That survival is
69 percent at 1 year and 62 percent at 2 years. These numbers reflect
the same types of organ transplants (single lung, double lung and
heart-lung) as are used by facilities in meeting volume criteria.
At the time of the application, the facility must demonstrate
actuarial 1-year survival rates of 69 percent for patients who have
end-stage pulmonary or cardiopulmonary disease and who have had lung or
heart-lung transplants at that facility using the Kaplan-Meier
technique described below and a 2-year survival rate of 62 percent. All
patients transplanted after 1989 should be included in the calculation.
We have chosen 1990 as the beginning date for the facility's survival
rate experience because the procedure was infrequently performed before
that date. We specifically invite comment on these percentages.
In reporting their actuarial survival rates, facilities must use
the Kaplan-Meier technique and must report both 1-year and 2-year
survival rates for all transplant cases occurring on or after January
1, 1990. Generally, we would expect applicants to have at least 3 years
of lung transplant experience to be used in the data array and survival
calculations. The following definitions and rules also must be used:
a. The date of transplantation (or, if more than one
transplantation is performed, the date of the first transplantation)
must be the starting date for calculation of the survival rate.
b. For those dead, the date of death if used, if known. If the date
of death is unknown, it must be assumed as 1 day after the date of the
last ascertained survival.
c. For those who have been ascertained as surviving within 60 days
before the fiducial date (the point in time when the facility's
survival rates are calculated and its experience is reported), survival
is considered to be the date of the last ascertained survival, except
for patients described in paragraph (e) below.
Note: The fiducial date cannot be in the future; it must be within
90 days before the date we receive the application.
d. Any patient who is not known to be dead but whose survival
cannot be ascertained to a date that is within 60 days before the
fiducial date, must be considered as ``lost to followup'' for the
purposes of this analysis.
e. Any patient who receives a lung transplant between 61 and 120
days before the fiducial date must be considered as ``list to
followup'' if he or she is not known to be dead and his or her survival
has not been ascertained for at least 60 days before the fiducial date.
Any patient transplanted within 60 days before the fiducial date must
be considered as ``lost to followup'' if he or she is not known to be
dead and his or her survival has not been ascertained on the fiducial
date.
f. A facility must submit its survival analyses using the
assumption that each patient in the ``lost to followup'' category died
1 day after the last date of ascertained survival. However, a facility
may submit additional analyses that reflect each patient in the ``lost
to followup'' category as alive at the date of the last ascertained
survival.
g. Survival is calculated based on patient survival, not graft
survival. Consequently, facilities should not consider
retransplantation as termination.
h. In addition to reporting actuarial survival rates, the facility
must submit the following actual information on every Medicare and non-
Medicare patient who received a lung transplant between January 1, 1990
and the date of the application:
Patient transplant number.
Age.
Sex.
Clinical indication for transplant (diagnosis).
Date of transplant.
Date of most recent ascertained survival.
Date of death.
Category of patient (living, dead or ``lost to
followup'').
Survival after lung transplant in days.
Type of lung transplant (for example, single, bilateral,
double lung or heart-lung).
Date of retransplant.
Number of retransplants.
Unique patient identifiers are not needed for data prior to the
application. The facility may submit additional information on any of
the cases that it would like considered in the review.
Although we are not requiring that these data be submitted in a
particular format, our review will be facilitated if the data are
submitted as follows:
Data are tabulated in twelve columns, with data for each
patient appearing as one line and listed in the sequence of date of
transplant.
The fiducial date should appear on each page.
The transplant numbers listed may be existing lung
transplant numbers used by the applicant facility. If so, the basis for
any missing numbers should be explained.
The tabulation should include no more than these required
data. If more data are provided, they should be provided through
additional tables or supplemental explanation.
In addition to the data above on the individual patient, the
facility must submit its retransplantation rate per year for the last 2
years for lung transplants.
6. Maintenance of Data
The facility must agree to maintain and, when requested,
periodically submit data to HCFA, in standard format, about patients
selected (including patient identifiers), protocols used, and short-
and long-term outcome on all patients who undergo lung transplantation,
not only those for whom payment under Medicare is sought. Such data are
necessary to provide a data base for an ongoing assessment of lung
transplantation and to ensure that approved facilities maintain
appropriate patient selection criteria, adequate experience levels and
satisfactory patient outcomes. In addition, facilities must agree to
notify HCFA immediately of any change related to the facility's
transplant program (including turnover of key staff members) that could
affect the health or safety of patients selected for covered Medicare
lung transplants or that would otherwise alter specific elements in
their application. For example, a facility must report any significant
decrease in its experience level or survival rates, the departure of
key members of the transplant team, the transplantation of patients who
do not meet the facility's patient selection criteria, or any other
major changes that could affect the performance of lung transplants at
the facility. Changes from the terms of approval may lead to withdrawal
of approval for Medicare coverage of lung transplants performed at the
facility.
Facilities not approved for Medicare covered lung transplants are
not required to maintain data in standard format. However, if and when
these facilities apply for Medicare approval, they will be required to
submit such data for all patients receiving a lung transplant.
7. Organ Procurement
The facility must be a member of the Organ Procurement and
Transplantation Network as a lung transplant center and abide by the
Network's approved rules. The Organ Procurement and
[[Page 6542]]
Transplantation Network is currently administered under an HHS contract
by the United Network for Organ Sharing. The facility must participate
in an organ procurement program to obtain donor organs.
If a lung transplantation center is not a Medicare approved organ
procurement organization, it must have a written arrangement with such
an approved organization to share organs. The authority for this
requirement is section 1138(a)(1) of the Act. The lung transplantation
center must notify HCFA in writing within 30 days of terminating such
arrangements.
An ``organ procurement organization'' is defined as an organization
that meets the criteria in section 371(b) of the Public Health Service
Act, 42 U.S.C. 273(b), and has been designated by HCFA as an organ
procurement organization under section 1138(b) of the Act. Such an
agency performs or coordinates all of the following services:
Retrieval of donated lungs.
Preservation of donated lungs.
Transportation of donated lungs.
Maintenance of a system to locate prospective recipients
for retrieved organs.
8. Laboratory Services
The facility must make available, directly or under arrangements,
laboratory services (including blood banking) to meet the needs of
patients. Laboratory services are performed in a laboratory facility
certified for those services under the Clinician Laboratories
Improvement Amendments of 1988.
9. Billing
The facility must agree to submit claims to Medicare only for lung
transplants performed on individuals who have been diagnosed as having
end-stage pulmonary or cardiopulmonary disease.
10. Pediatric Hospitals
The Congress addressed the issue of Medicare coverage of pediatric
heart transplants. It enacted section 4009(b) of the Omnibus Budget
Reconciliation Act of 1987 (Pub. L. 100-203) which essentially deemed
pediatric facilities to be certified as heart transplant facilities if
they met certain specified conditions. We have adopted these same
conditions that were specified for pediatric heart centers for use in
pediatric liver transplantation, and we believe it is appropriate to do
so likewise for pediatric lung transplantation.
There fore, lung transplantation will be covered for Medicare
beneficiaries when performed in a pediatric hospital that performs
pediatric lung transplants if the hospital submits an application that
HCFA approves as documenting the following:
The hospital's pediatric lung transplant program is operated
jointly by the hospital and another facility that has been found by
HCFA to meet the institutional coverage criteria in this notice; the
unified program shares the same transplant surgeons and quality
assurance program (including oversight committee, patient protocol, and
patient selection criteria); and the hospital is able to provide the
specialized facilities, services, and personnel that are required by
pediatric lung transplant patients.
C. Application Procedure
We will accept and begin to review applications after the
publication date of this notice. The application procedure is as
follows.
An original and 10 copies of the application must be submitted to
HCFA on 8\1/2\ by 11 inch paper, signed by a person authorized to do
so. The facility must be a participating hospital under Medicare and
must specify its provider number, the name and title of its chief
executive officer, and the name and telephone number of an individual
we could contact should we have questions regarding the application.
Information and data must be clearly stated, well organized, and
appropriately indexed to aid in review against the criteria specified
in this notice. Each page must be numbered. To the extent possible, the
application should be organized into nine sections corresponding to
each of the nine major criteria and addressing, in order, each of the
sub-criteria identified.
The application should be mailed to the address below in a manner
which provides the facility with documentation that it was received by
us: Director, Office of Hospital Policy, Room 189 East High Rise, 6325
Security Boulevard, Baltimore, Maryland 21207.
D. Process for Review and Approval of Facilities
We are requiring that facilities that wish to obtain lung
transplantation coverage for their Medicare patients under this notice
submit an application and supply documentation showing their compliance
with the criteria at the time of application, and, in some instances,
their ongoing compliance with the criteria. We will approve facilities
based on a review of the materials submitted regarding their experience
and expertise, as well as their commitment to the lung transplant
program. We intend to conduct the review using the aid and advice of
non-Federal expert consultants in relevant fields. Generally, the
consultants will have the responsibility of reviewing applications at
the request of HCFA, making recommendations to HCFA on a timely basis
concerning qualified facilities, and supporting each recommendation
with written documentation. Consensus of the consultants is not
required. The individual consultants report to us on their findings
with respect to individual applications. Based on these findings and
our evaluations and review, HCFA makes decisions as to the approval or
disapproval of such applications.
Based on our experience in using a similar approach to review
applications from hospitals seeking approval as Medicare heart or liver
transplant programs, we believe this method is the most effective way
to determine promptly and efficiently whether applicants meet the lung
transplant facility criteria. It permits relatively rapid
implementation of the criteria and should help assure applicants that
their qualifications have been thoroughly and objectively reviewed by
experts in the field of lung transplantation. While the amount of time
needed to process applications will vary depending on the quality of
the application and the volume of applications on hand, we believe
those applications that fully address and demonstrate meeting all of
the criteria may be completed within 60-90 days.
In approving facilities, we compare the facility's submission
against the criteria specified in this notice. In addition to reviewing
applications, the individual expert consultants may propose specific
changes to the coverage criteria. Changes in coverage criteria will not
be implemented, however, without appropriate notice and opportunity for
public comment.
Finally, in certain limited cases, exceptions to the strict
criteria may be warranted if there is justification and if the facility
ensures our objectives of safety and efficacy. We would consider an
exception or waiver of a particular criterion if all other criteria are
met and the facility is able to provide reasonable justification for
not meeting the criterion. For example, we have granted exceptions
under the heart transplant program to facilities that fail to meet the
volume or survival criteria in one year by a small number due to
extraordinary circumstances. We would also consider exceptions for a
facility that has only minimally missed the volume criteria but has
displayed exemplary survival performance. Another example of a
potential exception situation may involve patient selection criteria
that do
[[Page 6543]]
not comply with those in this notice due to participation in ongoing
research work.
Under no circumstances will exceptions be made for facilities whose
transplant programs have been in existence for less than 2 years, and
applications from consortia will not be approved. We do not believe
programs that have been in existence for less than 2 years have data to
demonstrate, in a statistically meaningful way, the quality of their
program. Further, it is difficult to demonstrate continued commitment
to the program without ongoing experience.
We do not believe waivers to allow consortia are appropriate
because we have no assurance that the individual facilities that make
up the consortia independently meet the conditions of this notice. We
believe these conditions must be met individually by a facility in
order to demonstrate substantial experience with the procedure.
Although we will not approve consortia as lung transplant centers,
individual members of a consortium may submit individual applications
at any time, and, if they meet the criteria, they will be approved. In
these cases, disapprovals would be made by HCFA and do not require
prior reviews by the expert consultants. Additionally, exceptions will
not be granted on the basis of geographic considerations.
E. Effective Dates
1. Summary of Effective Dates
A facility that submits a completed application to HCFA by
May 3, 1995 and meets all the requirements of this notice will be
approved for lung transplants performed beginning February 2, 1995 or
the date on which they meet the conditions, whichever is later.
A facility that submits a completed application to HCFA
after May 3, 1995 and meets all the requirements of this notice will be
approved for lung transplants performed beginning on the date of the
Administrator's approval letter.
A facility that does not submit application or has not met
the requirements of this notice by July 31, 1995 is not eligible for
Medicare payment for lung transplants effective July 31, 1995 except as
provided below.
A facility that has received Medicare payment for lung
transplants performed based on individual determinations made by the
Medicare carrier before July 31, 1995 may continue to receive payment
for lung transplants performed for patients who are on a waiting list
with that facility as of February 2, 1995.
2. Discussion of Effective Dates
It is not our intent to disrupt the availability of covered lung
transplants for Medicare beneficiaries. Consequently, the 180-day limit
on Medicare coverage in facilities not meeting the approved criteria in
this notice does not apply to those beneficiaries already on the
waiting lists of facilities that are currently being paid under the
Medicare contractors' local Medicare coverage policy. The contractor
will process the claims for all beneficiaries on the lung or heart-lung
transplant waiting list as of February 2, 1995 using its current
coverage policy regardless of whether the facility meets the criteria
contained in this notice. This policy will continue until all Medicare
beneficiaries on the waiting list as of February 2, 1995, have been
transplanted.
A beneficiary who is not currently on the lung or heart-lung
transplant waiting list will be limited to procedures performed in
those facilities that meet the provisions of this notice, unless the
beneficiary receives a transplant before July 31, 1995 publication that
would have been paid under the Medicare contractors' local Medicare
coverage policy that was in effect as of the effective date of this
notice. We recognize that those beneficiaries not presently on the
waiting lists will not know with assurance which facilities will
ultimately be approved for coverage before July 31, 1995. However, we
wish to point out that if the facility where a beneficiary is wait-
listed is not approved for Medicare coverage as the patient nears the
time of transplant, the beneficiary may transfer to an approved center
without lose of waiting time. That is, the patient will be transferred
to the new center with the date he or she was originally wait-listed at
the old facility as the start date.
We recognize that 180 days is more than we generally permit for
advance notice of implementation of new policy. However, based on
previous experience in the heart and liver transplant center approval
process, we anticipate that some facilities that meet the criteria will
delay application until the last month of the initial 90 day period.
Because it generally takes us approximately 2 months to process a
complete application we believe it is a reasonable expectation that
facilities will have been notified of the decision on their application
by that time. By delaying implementation for 180 days, we will assume
that there are not lapses in Medicare coverage due to processing time.
At the end of the 180 day period, Medicare coverage for transplants
other than for beneficiaries on the waiting list as of February 2, 1995
will be limited to approved facilities.
For facilities that apply within 90 days of publication of this
notice, and are approved based on that application, payment may be made
for transplants as early as the date of publication of this notice, or
the date on which they met the conditions, whichever is later.
For facilities that apply more than 90 days from the date of this
notice, coverage (for beneficiaries other than those on the facility's
waiting list as of the date of this notice in those States where the
contractors cover lung transplantation) is effective the date of the
Administrator's approval letter. Some contractors are currently
covering lung transplants in facilities that may not meet the criteria
in this notice. Coverage under the contractors' criteria will be
maintained until July 31, 1995. After this date, (except for the
beneficiaries identified above) only those facilities approved for
national coverage may receive Medicare payment for lung transplants.
F. Payment
For facilities that are approved to perform lung transplants,
Medicare covers under Part A (Hospital Insurance) all medically
reasonable and necessary inpatient services. For discharges occurring
before October 1, 1994, lung transplants were assigned to DRG 75, Major
Chest Procedures. As of that date, we established a new DRG 495, Lung
Transplant, for lung transplant cases.
We have assigned a relative weight of 12.8346 to DRG 495. This
weight is based on Medicare bill data from the federal fiscal year (FY)
1993 Medicare Provider Analysis and Review (MedPAR) file updated
through December 1993. The MedPAR file contains 100 percent of the
hospital discharge bills for Medicare beneficiaries received by HCFA.
We used the same methodology to calculate the weight for DRG 495 as
we do every year in recalibrating the weights for all DRGs. The final
rule implementing the FY 1995 changes to the hospital inpatient
prospective payment system, which was published in the Federal Register
on September 1, 1994 (59 FR 45348), contains a complete description of
the methodology used to calculate weights.
The Medicare DRG grouping program used under the prospective
payment system already groups heart-lung transplant procedures to DRG
103. The weight for DRG 103 is higher than that
[[Page 6544]]
assigned to DRG 495, the new lung transplantation DRG. We intend to
continue to pay for heart-lung transplants under DRG 103. The
mechanisms by which DRG weights are updated allows us to continue to
examine the costs associated with heart and heart-lung transplants to
assure that payments reflect service intensity.
Organ acquisition costs will be paid separately on a cost basis, in
the same manner as kidney acquisition costs are handled in the End-
Stage Renal Disease program under Medicare. Physician services, as well
as other non-hospital services related to the transplant, and pre- and
post-transplant care, may be covered under Medicare Part B and paid
under the physician fee schedule or on a reasonable cost basis or other
bases.
In accordance with section 1861(s) of the Act, outpatient drugs
used in immunosuppressive therapy, including drugs that a patient can
self-administer, such as cyclosporine, are covered under Medicare for a
period of up to 1 year beginning with the beneficiary's date of
discharge from the inpatient hospital stay during which a covered organ
transplant was performed. Beginning in 1995, Medicare coverage will be
extended to 18 months after the date of discharge for the covered
transplant procedure. During 1996, Medicare coverage will be extended
to 24 months, and during 1997 to 30 months. For all years thereafter,
Medicare coverage will be extended to 36 months after the date of
discharge for the covered transplant procedure.
If a Medicare beneficiary receives a covered lung transplant from
an approved facility, reasonable and necessary services for follow up
care and for complications are covered, as determined by our
contractors. In fact, as discussed below, such follow-up or remedial
services may be covered even if they are furnished by a hospital that
is eligible for Medicare payment but was not specifically approved by
Medicare for lung transplantation at the time the lung transplant was
performed.
With the exception of those individuals on the waiting list of a
facility currently approved for coverage by the fiscal intermediary on
the date of this notice, noted earlier, Medicare will not cover lung
transplants or retransplants in facilities that have not been approved
as Medicare lung transplant facilities under the criteria of this
notice as of July 31, 1995. If a Medicare beneficiary received a lung
transplant from a facility that is not approved by Medicare for lung
transplantation at the time the lung transplant was performed, we will
not cover any hospital inpatient services associated with the
transplantation procedure. Nor will we cover physician services
associated with the transplantation procedure in such cases. Thus,
payment will not be made for the performance of the transplant or for
any other services associated with the transplantation procedure if
performed in a nonapproved facility.
However, after a beneficiary has been discharged from a hospital
(whether or not it has been approved by Medicare as a lung transplant
center) in which he or she received the noncovered lung transplant,
subsequent medical and hospital services required as a result of the
transplant are covered in a facility otherwise eligible for in a
facility otherwise eligible for Medicare payment if they are reasonable
and necessary in all other respects. Thus, coverage is provided for
subsequent inpatient stays or outpatient treatment ordinarily covered
by Medicare even if the need for treatment arose because of a previous
noncovered lung transplant procedure. These services also are covered
for Medicare beneficiaries who were not beneficiaries at the time they
received a lung transplant, regardless of whether or not the transplant
was performed at an approved facility.
We will pay those hospitals currently receiving coverage by local
contractors for transplants furnished on or before July 31, 1995. For
transplants furnished after that date, except for those beneficiaries
on their waiting list on the date of this notice, we will pay only
approved facilities. For facilities approved for coverage, we will pay
for any covered transplants furnished on or after the date of
publication of this notice (if the facility applied during the initial
90 day period) or the date the facility is approved, whichever is
later.
III. Waiver of Proposed Notice
We ordinarily publish a proposed notice in the Federal Register
and invite prior public comment before issuing a final notice. However,
the Medicare law, at sections 1871(a)(2) and 1869(b)(3)(B), provide for
exception of prior public notice in the establishment of national
coverage policy. Specifically, section 1871(a)(2) of the Act states
that ``No rule, requirement, or other statement of policy (other than a
national coverage determination) that establishes * * * shall take
effect unless it is promulgated by the Secretary under regulation * *
*'' Section 1869(b)(3)(B) of the Act further specifies that a national
coverage determination under section 1862(a)(1) shall not be set aside
on the grounds that publication in the Federal Register or an
opportunity for public comment was not satisfied.
Despite this clear statutory authority to issue national coverage
policy without prior public comment, we have historically offered an
opportunity for prior public comment in establishing our national
coverage policy for heart and liver transplantation. However, in the
case of these organ transplants, we had previously established a
uniform non-coverage policy. In the case of lung transplants, there is
not pre-existing national coverage policy and differing policies have
been established by our local intermediaries. Consequently, we believe
it is impracticable, unnecessary and contrary to public interest to
delay the implementation of this policy while awaiting public comment.
In this final notice with comment period, we are extending Medicare
coverage to lung transplantation in facilities that meet specified
criteria. Patients currently on the waiting list in facilities that are
being paid under the Medicare contractor's local policy will continue
to retain coverage regardless of whether the facility is approved under
the criteria contained in this notice.
Patients not currently on a waiting list for a lung transplant may
be listed at the facility of their choice pending approval of the
facility by the Administrator. If the facility is not approved when the
patient is getting close to the top of the list, the patient my be
transferred to an approved center without loss of waiting time. That
is, it is the policy of the United Network for Organ Sharing (UNOS) to
manually adjust the waiting time for patients who transfer facilities
so that patients are credited wait time from when they were first
listed. UNOS has adopted this policy to encourage patients to be
transplanted at centers that are most proficient in transplantation.
Consequently, no Medicare beneficiaries would be adversely impacted by
this rule.
On the other hand, delay of this final notice until we could
publish a proposed notice would result in the unavailability of
coverage of lung transplantion to some facilities that would meet the
quality standards, due to the fact that the contractor in their area
has not determined the procedure to be covered under Medicare. In an
informal survey of the Medicare contractors, we believe at least 16
contractors are not currently covering lung transplantation and even do
not cover heart-lung transplantation. Further, immunosuppressive drug
therapy is covered only if the transplant is covered. Thus,
beneficiaries currently being denied coverage under local contractor
policies are excluded from coverage of needed drug therapy.
[[Page 6545]]
More importantly, we are concerned that Medicare beneficiaries may
be receiving transplants in facilities that do not offer the assurance
of high quality services that are commensurate with the criteria
contained in this notice. That is, given the reliance on outcome and
patient care practices inherent in this coverage policy, we are
convinced that facilities meeting the criteria set forth in this notice
clearly provide significantly superior services from a quality
perspective as demonstrated by the facility's patient care polices and
survival data. We are concerned that beneficiaries electing to have
lung transplants performed in facilities that do not meet this criteria
may not be aware of the increased risk of poor outcome that is
associated with this decision.
Further, we are concerned that due to individual contractor local
decisions, Medicare program expenditures may be spent in facilities
that are not yet proficient in the procedure so as to produce high
quality outcomes. Thus, continued coverage of lung transplants in these
high risk situations may result in increased expenditures for
complications that may arise from the transplant procedure that may
have been avoided had the procedure been performed in a facility that
meets these criteria.
Thus, it would be impracticable, unnecessary, and contrary to the
public interest to delay this extension of coverage until we could
publish a proposed notice and solicit comments. That is, since no
beneficiaries are disadvantaged by this notice due to the construction
of the effective date in a fashion that recognizes the coverage for
patients already on the waiting list of facilities so covered, it is
impracticable and contrary to public interest to delay implementation
of these standards that promote highest quality services to Medicare
beneficiaries and the extension of coverage to qualified facilities
located in areas where the Medicare contractor local policy excludes or
restricts coverage. We, therefore, find good cause to waive prior
proposed notice.
IV. Response to Comments
Because of the large number of items of correspondence we normally
receive on FR documents published for comment, we are not able to
acknowledge or respond to them individually. We will consider all
comments we receive by the date and time specified in the DATES section
of this preamble, and, if we proceed with a subsequent document, we
will respond to the comments in that document.
V. Paperwork Burden
This notice contains information collection requirements that are
subject to the Office of Management and Budget approval under the
Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). When OMB
approves these provisions, we will publish a notice to that effect. The
information collection concerns the requirement that a facility that
wishes to obtain Medicare coverage for lung transplantation submit an
application for approval and, once approved, report events or changes
that would affect its approved status. We also require that the
facility periodically submit data documenting such things as patients
selected for transplants, protocols used, short- and long-term outcomes
on patients who undergo lung transplantation. Public reporting burden
for this collection of information is expected to be 100 hours.
Organizations and individuals desiring to submit comments on the
information collection and recordkeeping requirements should direct
them to the OMB official whose name appears in the ADDRESSES section of
this notice.
VI. Regulatory Impact Analysis
A. Introduction
We generally prepare a regulatory flexibility analysis that is
consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
through 612) unless the Secretary certifies that a final notice will
not have a significant economic impact on a substantial number of small
entities. For purposes of the RFA, all facilities that consider
themselves capable of performing lung transplants are considered to be
small entities. Individuals and States are not included in the
definition of a small entity.
In addition, section 1102(b) of the Act requires the Secretary to
prepare a regulatory impact analysis for any notice that may have a
significant impact on the operations of a substantial number of small
rural hospitals. This analysis must also conform to the provisions of
section 604 of the RFA. For purposes of section 1102(b) of the Act, we
define a small rural hospital as a hospital which is located outside a
Metropolitan Statistical Area and has fewer than 50 beds.
This notice will affect all facilities that are, or are planning
on, performing lung transplants and may have an effect on the ability
of those facilities to compete. We believe this notice will not have a
significant impact on a substantial number of small rural hospitals
since it is unlikely that small rural hospitals will be performing lung
transplants. However, if there are any, they will not be affected by
this notice differently than any other hospital. We have prepared the
following analysis which, in combination with the other sections of
this notice, is intended to conform to the objectives of the RFA and
section 1102(b) of the Act.
B. Entities Affected
This notice provides for Medicare coverage of lung transplants
furnished to patients with certain conditions in facilities approved by
HCFA as meeting the minimum criteria specified in the notice. Lung
transplantation, as many developing procedures, grew rapidly--from 11
in 1987 to 535 in 1992. However, donor availability is a significant
limitation, and the rate of growth is slowing--in 1993 only 654
persons, from a waiting list of 1,300, received lung transplants.
Although we do not have complete data, based on informal interviews
with staff from a large sample of active lung transplant programs, we
believe only a small number of Medicare beneficiaries (approximately
100) presently are lung transplant candidates because of their age and
the presence of other complicating conditions. Our billing data
indicate that, in 1993, Medicare contractors approved payments
associated with 90 transplants.
Typically, a small number of facilities are involved in initially
developing procedures such as lung transplantation. As of January 1994,
the number of medical institutions in the United States with lung
transplant programs had grown to 76 (according to information from the
United Network for Organ Sharing). However, data indicate that there
still is a concentration of experience among a much smaller number of
facilities. We believe that the demand for lung transplants will grow
as more physicians and patients recognize lung transplantation as a
treatment resulting in increased life expectancy and in improved
quality of life, and that the demand will be met by facilities offering
the procedure.
The number of lung transplants performed is dependent upon many
factors, including the supply of suitable donor organs (only 5 to 10
percent of available donors have lungs considered acceptable for
transplantation), the existence of qualified facilities and personnel,
and the availability of funding for the procedure.
Payment for lung transplants is available from some third party
insurers, some State Medicaid programs,
[[Page 6546]]
private funds, and public fund-raising efforts. In the absence of a
national Medicare coverage policy, each of the Medicare contractors
uses its customary review and approval procedures to determine whether
bills or claims associated with lung transplants should be paid.
Payment data indicate that Medicare beneficiaries make up only a
small portion of lung transplant recipients. The proportion of
transplants covered by Medicare is assumed to grow slightly over time--
from 13 percent in 1993 to 20 percent in 1995, and up to 24 percent in
1999--as improved techniques allow transplantation of older and
disabled patients.
The United Network for Organ Sharing currently lists 77 facilities
as lung transplant centers. Seven of these facilities are children's
hospitals and not subject to the criteria in sections II.B.1-9 of this
notice. Of the remaining 70 facilities, 40 do not maintain an active
ongoing lung transplant program. Although these facilities operate
active transplant programs for other organs, they do lung
transplantation sporadically, sometimes going an entire year without a
single lung transplant. These centers currently have less than 10
people on their waiting list, and based on an informal survey of a
sample of these centers, we estimate that it is rare for a Medicare
beneficiary to be listed at one of these centers. Consequently, we do
not believe that these centers are significantly impacted by this
notice.
Based on our experience with application of a similar approval
process to liver transplant facilities and review of available data on
volume, we estimate that application of the criteria in this notice
will result in the approval of 10 to 15 of the remaining 30 facilities
within the first year, with the total rising to approximately 20 within
the next year. Thus, we expect to approve at least two-thirds of the
active lung transplant programs within the first 2 years. Many of the
remaining third are expected to qualify by the third year, and we
estimate the addition to the list of approved facilities of at least
one facility per year for several more years. Ultimately, we expect all
30 of the active programs will be approved for Medicare coverage.
Many facilities that have performed few lung transplants will not
meet the levels of experience and success required under the facility
criteria. However, some might be found to have acceptable clinical
programs with an adequate prospect for successful outcomes. We would
encourage these facilities to apply when they have achieved that
success. We recognize that the criteria for experience, survival rates,
and facility commitment are demanding. However, our goal in requiring
facilities to meet certain criteria is not to restrict competition but
to maintain the quality of services required by this complex procedure.
Facilities that apply (or reapply) will continue to be approved as
they come to meet the facility criteria. There will be neither a cutoff
date for receipt of applications nor a limit on the number of approved
facilities. For the purpose of estimating the costs of covering lung
transplants, we expect, by fiscal year 1998, that many, if not most, of
the hospitals actively performing lung transplants could meet the
criteria if they desire Medicare approval. We do not have any advance
information on which facilities will apply or meet the criteria.
Medicare approval status could eventually provide those hospitals
that meet the criteria for performing lung transplants with what are
perceived to be advantages over non-approved facilities. In addition to
the guaranteed Medicare payment for approved procedures, these
hospitals might expect to see their prestige and standing as health
care providers increase as a result of their approval as a Medicare
lung transplant center. This, in turn, could enable them to increase
their overall market share of lung transplants and other complicated
procedures at the expense of hospitals that also perform lung
transplants but do not meet our criteria. Therefore, those facilities
that do not meet the criteria may view our notice as having a
significant adverse effect on competition.
Some facilities may choose to not apply for approval as a
transplant facility and to discontinue their transplant programs. So as
to not curtail availability of coverage to individuals currently on a
waiting list at a facility now recognized by a fiscal intermediary
under procedures in effect prior to the date of this notice, we are
making a special exception. Lung transplants furnished by a facility to
a Medicare patient on its waiting list on the date of this notice, will
continue to be paid by Medicare using the contractor's current coverage
criteria, even if the procedure occurs more than 180 days after the
publication of the notice and the facility is not approved under the
criteria of this notice on the date the transplant occurs. Thus, we do
not believe that the criteria would in any way reduce the number or
availability of transplants to patients that are currently on a waiting
list for a lung transplant.
We expect that Medicare coverage of lung transplantation could
prompt additional third party payers, including some State Medicaid
plans, to consider covering this procedure and to create incentives for
some facilities to establish lung transplant programs. However, third
party payers that either already cover or intend to cover lung
transplants are not required to adopt our coverage standards.
C. Projected Expenditures Under Medicare
It is difficult to make a precise estimate of future Medicare
costs, largely due to the difficulty of predicting the availability of
donor organs over the next few years. All dollar estimates depend on
assumptions and estimates related to the number of covered transplants.
In 1993, Medicare beneficiaries received 122 of the 654 lung
transplants performed. In the absence of a national Medicare coverage
policy, Medicare contractors approved payments associated with 90 of
the 122 transplants.
Our projected estimates are based on some facilities meeting our
requirements effective on the date of this notice. In developing these
estimates, we made assumptions about the total number of lung
transplants performed nationwide and the future rate of increase of the
number of transplants performed at approved facilities. We assumed this
would go up with the number of facilities, but the rate of increase
would level off due to competition for suitable recipients and donor
organs. The estimates include not only the cost of transplantation in
an approved facility, but associated immunosuppressive drugs, and
follow-up care resulting from the extension of this coverage.
Due to the sensitivity of these assumptions and the uncertainty of
actual outcomes, we view our projection of expenditure increases as an
opinion, rather than an estimate.
[[Page 6547]]
----------------------------------------------------------------------------------------------------------------
Number of
Projected Number paid additional
total by Medicare Medicare costs LTs as a Additional
Fiscal year number of under under current result of Medicare
LTs current policy(millions) expanded costs(millions)
policy coverage
----------------------------------------------------------------------------------------------------------------
1995.................................. 817 162 (20%) $18 7 $1
1996.................................. 878 183 (21%) 22 8 2
1997.................................. 939 205 (22%) 26 9 3
1998.................................. 1003 229 (23%) 31 9 3
1999.................................. 1068 254 (24%) 36 10 4
----------------------------------------------------------------------------------------------------------------
D. Projected Savings Under Medicaid
Medicaid coverage of transplants is a decision of the individual
State. As of 1990, lung transplants were covered by 15 States. We
cannot predict whether Medicare coverage will increase the number of
State Medicaid programs that will cover lung transplants or whether the
Medicare coverage criteria will cause more restrictive policies than
would otherwise occur. Medicare coverage of lung transplants will
reduce States' payments for transplantation in Medicare beneficiaries
who also qualify under Medicaid. To the extent that Medicare payment
supplants Medicaid funding, the Federal budget receives an offset for
the Federal share of Medicaid expenditures. Under current policy, we
estimate the annual offset to be $5 million.
E. Alternatives Considered
We considered allowing all Medicare participating hospitals to
establish transplant programs without additional facility criteria. Our
major reason for rejecting this alternative was that it would permit
uncontrolled proliferation of transplant facilities, raising questions
about the quality of services, given the limited availability of donor
organs and experienced teams. Further, because the procedure would be
spread among a larger number of facilities, it is likely the average
experience level would be lower and would probably result in lower
success and survival rates among recipients. Our responsibilities for
the well-being of Medicare beneficiaries and for the prudent
expenditure of Medicare trust funds dictate that we pursue a cautious
policy with respect to a procedure as complex as lung transplantation.
F. Conclusion
We believe that the criteria we have developed are the most
effective means available to ensure that the lung transplants that are
made available to Medicare beneficiaries are provided in a safe and
effective manner so that they can be considered to be reasonable and
necessary within the meaning of the law. We believe that the conditions
set forth in this notice would maintain the quality of services
required by this complex procedure, provide Medicare coverage of the
procedure only at facilities and under conditions that have been shown
to be safe and effective, and allow entry of new qualified providers.
Although the criteria are somewhat restrictive, we believe this
approach is justified, particularly in view of the typical relationship
between experience and quality of service.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Authority: Section 1862(a)(1)(A) of the Social Security Act (42
U.S.C. 1395y(a)).
(Catalog of Federal Domestic Assistance Program No. 13.773
Medicare--Hospital Insurance Program; and No. 13.774, Medicare--
Supplementary Medical Insurance Program)
Dated: September 26, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: December 7, 1994.
Donna E. Shalala,
Secretary .
[FR Doc. 95-2559 Filed 2-1-95; 8:45 am]
BILLING CODE 4120-01-M