[Federal Register Volume 68, Number 187 (Friday, September 26, 2003)]
[Notices]
[Pages 55634-55641]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-24361]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3062-N]
RIN 0938-AK61


Medicare Program; Revised Process for Making Medicare National 
Coverage Determinations

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Notice.

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SUMMARY: This notice revises the process we will use to make a national 
coverage determination for a specific item or service under sections 
1812, 1832, 1861, 1862, 1869, and 1871 of the Social Security Act, as 
revised by sections of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000. This notice further clarifies 
our decision-making process and increases the opportunities for public 
participation.

EFFECTIVE DATE: This notice is effective on October 27, 2003.

FOR FURTHER INFORMATION CONTACT: Vadim Lubarsky, (410) 786-0840.

SUPPLEMENTARY INFORMATION: Availability of Copies and Electronic Access 
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Government Printing Office. The Web site address is: http://www.access.gpo.gov/nara/index.html.

I. Background

    In the April 27, 1999 Federal Register (64 FR 22619), we published 
a notice that announced changes to our internal procedures for 
developing a national coverage determination (NCD) and making the NCD 
process more open and understandable to the public. As we strive for 
continuous improvement of our processes, and in recognition of the 
changes that section 522 of the Medicare, Medicaid, and SCHIP Benefits 
Improvement and Protection Act of 2000 (BIPA) requires, we are revising 
our process for developing an NCD in order to make the process more 
efficient and ensure that we have access to all relevant information to 
make fully informed decisions. (BIPA, Pub. L. 106-554, was enacted on 
December 21, 2000.) The processes described in this notice apply to 
both scope of benefit and section 1862(a)(1) determinations as defined 
in the Social Security Act (the Act). This notice replaces the April 
27, 1999 notice and will be effective on October 27, 2003. Improvements 
include the following:
    [sbull] Updating and organizing the reconsideration process into 
one section, and distinguishing it from an initial request to make an 
NCD.
    [sbull] Defining, streamlining, and organizing the contact/inquiry 
information into one section.
    [sbull] Revising, formalizing, and updating the elements that 
constitute a complete, formal request to reflect best practices.
    [sbull] Adding a section on information that does not constitute a 
complete, formal request.
    [sbull] Updating and clarifying the conditions for acceptance of a 
complete, formal request.
    [sbull] Making it clear that all evidence currently available must 
be adequate for us to conclude that the item or service is reasonable 
and necessary.
    [sbull] Establishing two main tracks for the initial NCD request. 
One track is a highly time-structured track only available to aggrieved 
parties (section IV.E track 2), as defined in section 522 of 
BIPA. The other track is open to anyone, including aggrieved parties, 
beneficiaries, and manufacturers, and offers a more collaborative and 
less time-stringent process (section IV.E track 1).
    Historically, we have based our coverage determinations on 
descriptive information, and scientific and clinical evidence. Under 
the revised BIPA coverage process, we will continue to use descriptive 
information, and scientific and clinical evidence as a basis for our 
coverage determinations.

II. Purpose of This Notice

    This notice outlines the process we will use to make an NCD under 
the Medicare program. It sets forth the steps we are taking to make the 
NCD process more efficient, while maintaining as open and transparent a 
process as appropriate. It describes the following:
    [sbull] A tracking system that provides public notice of our 
acceptance of a complete, formal request and subsequent actions in a 
web-based format.
    [sbull] The process we will institute to afford notice and 
opportunity to comment before implementation of an NCD.
    [sbull] Information that does and does not constitute a complete, 
formal request.
    [sbull] The process for asking us to reconsider an existing NCD 
based on new information, including new medical or scientific evidence.
    [sbull] The basis and purpose of a decision memorandum and where it 
can be accessed on our Web site.
    [sbull] The revisions made to the NCD process under BIPA, including 
a response to public comments, and how these revisions affect the 
current NCD process and any subsequent challenges to an NCD.
    In addition, we will continue to pursue an ongoing effort to work 
with various sectors of the scientific and medical community to develop 
and publish on the CMS Web site documents that describe our approach 
when analyzing scientific and clinical evidence to develop an NCD. 
Interested parties will be able to offer comments. Accordingly, these 
documents will make our coverage process more open and offer the public 
a better understanding into our NCD process.
    In our April 1999 notice, we announced that we anticipated 
publishing a final coverage criteria rule that would be followed by 
sector-specific guidance documents (64 FR 22620). Since then, we 
published a notice of intent to engage in rulemaking for coverage 
criteria (May 16, 2000, 65 FR 31124) and had a subsequent town

[[Page 55635]]

hall meeting. Given that there are substantial competing interests 
about the coverage criteria, we believe it best not to pursue 
rulemaking. In the meantime, as we have done in the past 35 years, we 
would continue to need to make coverage decisions and interpret what is 
``reasonable and necessary.'' We believe that in the interest of 
expediting NCDs and making the process as predictable as possible that, 
in the interim, nonbinding sector-specific guidance documents would be 
helpful. Sector-specific guidance documents refer to how our 
expectations and evaluation of evidence may differ in some respects 
depending on the nature of the topic under review. Evidence can vary 
greatly, for example, between a diagnostic and an item of DME or 
between a near-term fatal condition and a life-long chronic condition.
    Thus, we are notifying the public that we may choose to publish 
sector-specific guidance documents even in the absence of a final rule. 
We will consider doing so as the need arises. This is also notice that 
we currently do not plan to develop a proposed rule based on the May 
2000 Notice of Intent.
    Section 522(b) of BIPA amends section 1862(a) of the Act to require 
the Secretary ``to make available to the public the data (other than 
proprietary data) considered in making the determination.'' In a notice 
of proposed rulemaking published on August 22, 2002 (67 FR 54534), we 
described the process for handling proprietary information related to 
NCDs. After considering public comments, we will establish and announce 
a policy that addresses that issue and defines ``proprietary'' data in 
the final rule.

III. Medicare Coverage--General Principles

A. Statutory Authority

    Administration of the Medicare program is governed by title XVIII 
of the Act. Under the Medicare program, the scope of benefits available 
to eligible beneficiaries is prescribed by law and divided into several 
main parts. Part A is the hospital insurance program, and Part B is the 
voluntary supplementary medical insurance program.
    The scope of benefits under Part A and Part B is defined in the 
Act. See sections 1812 (scope of Part A), 1832 (scope of Part B); and 
1861(s) (definition of medical and other health services). Part C, 
known as the Medicare+Choice program, includes at a minimum, all of the 
items and services (other than hospice care) available under Part A and 
Part B to individuals residing in the area served by the plan. Some 
benefit categories are defined more broadly than others. Specific 
health care services must fit into one of these benefit categories, and 
not be otherwise excluded, to be eligible for coverage under the 
Medicare program.
    The Act does not contain a comprehensive list of specific items or 
services eligible for Medicare coverage. Rather, it lists categories of 
items and services, and vests in the Secretary the authority to make 
determinations about which specific items and services within these 
categories can be covered under the Medicare program. That is, the Act 
allows Medicare to cover medical devices, surgical procedures, and 
diagnostic services, but generally does not identify specific covered 
or excluded items or services.
    Medicare payment is contingent upon a determination that a service 
meets a benefit category, is not specifically excluded from coverage, 
and the item or service is ``reasonable and necessary.'' Section 
1862(a)(1)(A) of the Act states that, subject to certain limited 
exceptions, no payment may be made for any expenses incurred for items 
or services that are not ``reasonable and necessary'' for the diagnosis 
and treatment of illness or injury or to improve the functioning of a 
malformed body member. For over 30 years, we have exercised these 
authorities to make a coverage determination regarding whether a 
specific item or service meets one of the broadly defined benefit 
categories and can be covered under the Medicare program.
    As revised by section 522 of BIPA, an NCD is now defined to be a 
determination by the Secretary with respect to whether or not a 
particular item or service is covered nationally under title XVIII of 
the Act, but does not include a determination about which code, if any, 
is assigned to a particular item or service covered under title XVIII, 
or a determination with respect to the amount of payment for a 
particular covered item or service.
    In general, an NCD is a national policy statement granting, 
limiting, or excluding Medicare coverage for a specific medical item or 
service. Often, an NCD is written in terms of a particular patient 
population that may receive (or not receive) Medicare reimbursement for 
a particular item or service. An NCD is binding on all Medicare 
carriers, fiscal intermediaries (FIs), quality improvement 
organizations (QIOs), health maintenance organizations (HMOs), 
competitive medical plans (CMPs), and health care prepayment plans 
(HCPPs). Before October 1, 2001, NCDs made under section 1862(a)(1) of 
the Act could not be reviewed by administrative law judges (ALJs). 
Effective October 1, 2001, BIPA expanded the definition of NCDs, and 
provides that all NCDs shall not be reviewed by ALJs under section 
1869(f)(1) of the Act.
    It is important to distinguish between a decision memorandum and an 
NCD. The decision memorandum is the public document that lays out and 
describes the analytic framework for our decision on a topic under NCD 
review. Its purpose is to inform the reader of the decision, the 
reasons for the decision and process followed, and provide a summary of 
the evidence considered. The decision memorandum alerts the public of 
our intent to implement the decision at some point in the future. The 
NCD itself follows the decision memorandum, sometimes by a number of 
months. It is the formal instruction to our claims processing 
contractors regarding how to process claims (when to pay, when not to 
pay, pay only when certain clinical conditions are met). Those 
instructions have a specific effective date dictating when claims will 
be processed according to the new criteria.
    Generally, once we receive a complete formal request, it takes 90 
days to develop a decision memorandum. As noted above, the decision 
memorandum is not the NCD, but rather is one step towards making an NCD 
for an item or service. After the decision memorandum is prepared, we 
must prepare the actual NCD. The NCD may be issued as a manual 
instruction or other document such as a program memorandum, ruling, or 
Federal Register notice. The NCD may be accompanied by additional 
information for our contractors that is necessary to ensure that 
Medicare claims will be properly processed when the NCD is effective. 
As noted above, except in very limited circumstances, preparing the NCD 
will occur after this 90-day review process.
    We expect to make any payment changes or other systems changes 
dictated by the NCD instructions effective within 180 calendar days of 
the first day of the next full calendar quarter that follows the date 
we issue the decision memorandum. Thus, the decision memorandum and 
payment change can take up to 270 days from the date a formal request 
for an NCD is accepted for review by CMS. The date when a Medicare 
beneficiary may obtain the item or service and receive Medicare payment 
for that item or service under an NCD that expands coverage will not be 
known until the NCD is completed and has been assigned an effective 
date. The NCD will be implemented by all of

[[Page 55636]]

our contractors on the effective date. Additional details concerning 
this process, as well as certain limited exceptions, are described 
later in this notice.

B. Medicare Contractors and Coverage Policies

    We contract with private insurance companies, referred to as 
carriers and FIs, to process Medicare claims; that is, claims-payment 
contractors. Local QIOs are also involved in the claims adjudication 
process. We refer to all of these entities as ``Medicare contractors.''
    Medicare contractors review and adjudicate claims to ensure that 
Medicare payments are made only for those items or services covered 
under Medicare Part A or Part B. In the absence of a specific NCD, 
coverage determinations are made locally by the Medicare contractors 
within the boundaries established by the law. Sometimes these 
determinations are made on a claim-by-claim basis.
    Medicare contractors will also publish local coverage 
determinations (LCDs) that will provide guidance to the public and 
medical community within a specified geographic area. An LCD is defined 
in section 522 of BIPA as a determination made by an FI or a carrier 
under Medicare Part A or Part B, as applicable, for whether or not a 
particular item or service is covered on an intermediary-wide or 
carrier-wide basis under those parts, in accordance with section 
1862(a)(1)(A) of the Act. An LCD may not conflict with an NCD, but the 
LCD may supplement an NCD.

C. Procedural

    We continue to expect that all evidence currently available must be 
adequate for us to conclude that the item or service is reasonable and 
necessary. In the absence of adequate evidence, we may conclude that 
the item or service is not reasonable and necessary.

D. Differences Between Food and Drug Administration (FDA) and CMS 
Review

    Parties interested in the coverage of a drug or device (other than 
a Category B investigational device exemption (IDE) device, which is 
addressed through a separate process as described in 42 CFR 405.201 
through 405.215) may contact us with an inquiry on Medicare coverage 
while the particular drug or device is proceeding through the Food and 
Drug Administration (FDA) premarket review process. We are willing to 
meet and discuss issues within this context. Because the FDA is charged 
with regulating whether devices or pharmaceuticals are safe and 
effective for use by consumers, generally we will not accept a request 
for a device or pharmaceutical that has not been approved or cleared 
for marketing by the FDA for at least one indication; one exception is 
Category B IDE devices. An IDE Category B device is a non-experimental/
investigational device for which the incremental risk is the primary 
risk in question (that is, underlying questions of safety and 
effectiveness of that device type have been resolved), or it is known 
that the device type can be safe and effective because, for example, 
other manufacturers have obtained FDA approval or clearance for that 
device type.
    Both CMS and the FDA review scientific evidence, and may review the 
same evidence, to make purchasing and regulatory decisions, 
respectively. However, CMS and its contractors make coverage 
determinations and the FDA conducts premarket review of products under 
different statutory standards and different delegated authority (67 FR 
66755, November 1, 2002). Whereas the FDA must determine that a product 
is safe and effective as a condition of approval, CMS must determine 
that the product is reasonable and necessary as a condition of coverage 
under section 1862(a)(1)(A) of the Act. CMS adopts FDA determinations 
of safety and effectiveness, and CMS evaluates whether or not the 
product is reasonable and necessary for the Medicare population. 
Although an FDA-regulated product must receive FDA approval or 
clearance (unless exempt from the FDA premarket review process) for at 
least one indication to be eligible for Medicare coverage, except for 
Category B devices under an IDE clinical trial (see 60 FR 48417, 
September 19, 1995), FDA approval/clearance alone does not generally 
entitle that device to coverage.

IV. CMS's Process for Making National Coverage Determinations

    There are several ways an individual or entity can contact us about 
NCDs. One approach involves informal contacts, discussed in section 
IV.A of this notice. The other approach involves ``formal requests.''
    If we have not issued an NCD for a particular item or service, an 
external requestor may use one of two formal tracks to submit a request 
to make an initial NCD. One track, established by section 522 of BIPA, 
is available only to aggrieved parties, as defined by statute to be 
``individuals entitled to benefits under Part A, or enrolled under Part 
B, or both, who are in need of the items or services that are the 
subject of the coverage determination'' and is highly time-structured. 
The other track is open to anyone, including aggrieved parties, other 
beneficiaries, and manufacturers, and offers a more collaborative and 
less time-stringent process. The NCD development process under BIPA-
legislated time frames will only be initiated when we receive a 
complete, formal request from an aggrieved party.

A. Informal Contacts and Inquiries

    The public frequently raises general questions about the coverage 
of items and services to us by telephone, the postal mail system, 
electronic means, or in person. These questions may include, but are 
not limited to, asking us to explain the current coverage of a 
particular item or service, or requesting assistance with, or advice 
about, a possible submission of a formal request for an NCD. We 
consider all of these contacts to be informal. Although informal 
contacts are not confidential, we will not announce the substance of 
these contacts on our Web site.
    If the requestor asks for specific information about how to request 
an NCD, we will advise them on implications of such a request and 
explain what is required for us to accept a submission as a complete, 
formal request. We will offer suggestions to the requestor to clarify 
the amount and kind of information necessary for us to evaluate whether 
an item or service is ``reasonable and necessary'' under the Act, and 
in limited instances, we may offer to assist the requestor in meeting 
these requirements.

B. What Constitutes a Complete, Formal Initial Request for a National 
Coverage Determination or Formal Request for Reconsideration

    We consider a request to be a complete, formal request, only if all 
of the following conditions are met:
    [sbull] The formal request letter must be in writing.
    [sbull] The formal request letter and supporting documentation must 
be submitted electronically (unless there is good cause for only a 
hardcopy submission).
    [sbull] The requestor must identify the request as a ``formal 
request for an NCD'' or a ``formal request for reconsideration'' and 
identify the NCD development track chosen (described in detail in 
section IV.E of this notice).
    [sbull] The requestor must state the benefit category or categories 
of the Medicare program to which the requestor believes the item or 
service applies. Examples of benefit categories may include durable 
medical equipment, physician services, inpatient hospital services, and 
diagnostic tests. The requestor may

[[Page 55637]]

recommend one or more benefit categories for the item or service and 
must submit supporting documentation justifying the recommendation. We 
must have all information, both from the requestor and internally, to 
make a benefit category determination, before the request can be 
considered complete. If an item or service can fit into more than one 
benefit category, we have the discretion to assign it to the most 
appropriate benefit category.
    [sbull] The requestor must submit adequate supporting documentation 
along with the formal letter, including the following:

--A full and complete description of the item or service in question.
--A specific, detailed description of the proposed use of the item or 
service, including the target Medicare population and the medical 
condition(s) for which it can be used.
--A compilation of the supporting medical and scientific information 
currently available that measures the medical benefits of the item or 
service. This may include portions of primary study data that have been 
separately submitted to the FDA as part of its submission package and 
are deemed most relevant for our review.
--If the requestor has submitted an application to the FDA for market 
approval of the product for which coverage is sought, then a copy of 
the ``integrated summary of safety data'' and ``integrated summary of 
effectiveness data,'' or the combined ``summary of safety and 
effectiveness data,'' portions of the FDA application should be 
included in the request for an NCD. These documents will ensure that 
our review is comprehensive.
--An explanation of the design, purpose, and method of using the item 
or equipment, including whether the item or equipment is for use by 
health care practitioners or patients.
--A statement from the requestor (in cases in which there is an 
aggrieved party, the statement must be from that party) containing the 
following:
    ++An explanation of the relevance of the evidence selected.
    ++Rationale for how the evidence selected demonstrates the medical 
benefits for the target Medicare population.
    ++Information that examines the magnitude of the medical benefit.
    ++Reasoning for how coverage of the item or service will help 
improve the medical benefit to the target population.
    ++In the case of an aggrieved party, how that party is ``in need'' 
of the item or service.
--A description of any clinical trials or studies currently underway 
that might be relevant to a decision regarding coverage of the item or 
service.
--Information involving the use of a drug or device subject to FDA 
regulation as well as the status of current FDA regulatory review of 
the drug or device involved. An FDA regulated article would include the 
labeling submitted to the FDA or approved by the FDA for that article, 
together with an indication of whether the article for which a review 
is being requested is covered under the labeled indication(s). (We 
recognize that the labeling on FDA-approved products sometimes changes. 
For purposes of our review, we are interested in the labeled 
indications at the time a requestor submits a formal request. If, 
during our review, the labeled indication or status of a pending FDA 
approval or clearance changes, we expect the requestor to notify us.)
--In the case of items that are eligible for a 510(k) clearance by the 
FDA, identification of the predicate device to which the item is 
claimed to be substantially equivalent.

C. When a National Coverage Determination Request or Reconsideration 
Request Is Not Considered Complete and Formal

    When a requestor submits a request for an NCD or reconsideration, 
we will review the materials to determine if it meets the definition of 
a complete, formal request as defined in section IV.B of this notice. 
If the request lacks adequate supporting documentation to enable us to 
conduct our review, we will notify the requestor and explain our 
rationale. If we accept the request, we will notify the requestor of 
the acceptance. We will also post our acceptance on our Web site under 
our list of pending coverage issues.
    As we previously stated, we will not consider a request to be a 
complete, formal request if any of the following occur:
    [sbull] Request is not in writing.
    [sbull] Request is not accompanied by sufficient, supporting 
documentation.
    [sbull] Information provided does not address relevance, 
usefulness, or the medical benefits of the item or service to the 
Medicare population.
    [sbull] Information does not fully explain the design, purpose, and 
method of using the equipment for which the request is made.
    [sbull] Information provided is not supported by scientific or 
clinically relevant data.
    [sbull] Information provided is not relevant to the item or service 
for which the request is made.
    [sbull] Request does not clearly identify the statutorily defined 
benefit category to which the requestor believes the item or service 
applies and does not contain enough information for us to make a 
benefit category determination.
    [sbull] Request is considered an informal contact described in 
section IV.A.

D. Acceptance of a Complete, Formal National Coverage Determination or 
Reconsideration Request

    In the rare event that we have a large volume of NCD requests to 
review at once, we retain the flexibility to prioritize these requests 
based on the magnitude of the impact on the Medicare program and 
beneficiaries. This flexibility will enable us to ensure that we can 
pay priority attention to those requests that have potential for 
significant impact on our beneficiaries--a life-saving cancer 
treatment, a breakthrough in cardiac pacing, etc. In order to do so, we 
may have to temporarily suspend or diminish our review of other issues 
that, while important, do not have the same profound potential. We 
expect to use any such authority infrequently.
    For these cases, two lists, an accepted list and lower priority 
list (based on impact) will be maintained and available on our Web 
site; the lower priority list will be processed based on the order of 
acceptance as resources become available. Requestors can use this 
public priority list to verify whether the request has been accepted, 
the status of the request, and where the requestor is in the order of 
priorities.
    Upon acceptance of a request, we will notify the requestor and post 
a tracking sheet announcing our review of this issue on the list of 
pending coverage issues on the coverage Web site. Posting of the 
tracking sheets permits interested individuals to participate and 
monitor the progress of the NCD process. This is a key element in 
making our NCD process more efficient, open, and accessible to the 
public. Once a formal request is posted, there will be an opportunity 
for public participation and submission of additional evidence. (If 
after accepting the request, we decide that the request does not fall 
under a benefit category, we will issue a noncoverage NCD.)

[[Page 55638]]

E. Review of a Complete, Formal Request for a National Coverage 
Determination

    Development of a complete, formal request for an NCD can be 
initiated in one of three ways:
    Track #1: Request for New National Coverage Determinations 
Initiated by Any Party, Including Beneficiaries, Manufacturers, 
Providers, or Suppliers.
    A request to make an NCD can be received from an individual or 
entity who identifies an item or service as a potential benefit (or to 
prevent potential harm) to the Medicare population; this requestor can 
be either an aggrieved party as defined by section 522 of BIPA, or a 
nonaggrieved party. This may include a manufacturer, provider, 
supplier, or party who requests our consideration of a particular issue 
for an NCD. All requests must meet the requirements in this notice. An 
initial request can only be made if we have not previously issued an 
NCD for a particular item or service.
    If an individual or other entity initiates a request, we expect to 
generally issue a decision memorandum within a 90-day period. More 
complex issues, or issues that require referral to the Medicare 
Coverage Advisory Committee or for a Technology Assessment, would 
generally take longer than 90 days. Generally, we expect to make a 
payment change effective within 180 calendar days of the next full 
calendar quarter that follows the date we issue the decision 
memorandum.
    Though the 90-day clock in this option is not as strict as the 
process used only for aggrieved parties, this track offers a more 
collaborative process than track two. The opportunities for greater 
collaboration will flow from the more flexible approach to the 90-day 
clock. Requestors and other interested parties will be able to provide 
additional information, clarify issues, and engage in dialogue as 
questions arise. The ability to follow this path is necessarily 
constrained when we are under a strict, narrowly-framed 90-day response 
timeline.
    Track #2: Request by an Aggrieved Party for New National Coverage 
Determinations Where There Were No National Coverage or Noncoverage 
Determinations.
    Aggrieved parties are defined in section 1869(f)(5) of the Act as 
``individuals entitled to benefits under Part A, or enrolled under Part 
B, or both, who are in need of the items or services that are the 
subject of the coverage determination.'' Section 1869(f)(4) of the Act 
permits these individuals to make a request that the Secretary issue a 
national coverage or noncoverage determination with respect to a 
particular type or class of items or services, if the Secretary had not 
previously made a coverage or noncoverage determination. Thus, this 
track can be invoked only for an initial request if we have not issued 
a coverage or noncoverage NCD.
    As noted in section E, track 1, generally we expect to make a 
payment change effective within 180 calendar days of the first day of 
the next full calendar quarter that follows the date we issue a 
decision memorandum. This time is necessary to identify and make any 
necessary coding, payment, and systems changes. However, if an 
aggrieved party initiates a request under track 2, we expect to issue a 
decision memorandum and an NCD (that is, the manual instruction or 
other appropriate document) to our contractors by no later than the end 
of the 90-day period, in accordance with the statutory timeframe. The 
NCD will include the effective date of the policy. In cases where we 
are not able to complete our review within this 90-day timeframe, the 
law requires that we issue a notice that includes an identification of 
the remaining steps in the review process and a deadline by which we 
will complete that review.
    A decision memorandum will include a clear statement of the basis 
for the determination including our responses to comments we receive 
from the public. The actual effective date of the NCDs will depend on 
whether we must make changes to our claims processing systems to allow 
Medicare payment; this step is not included in the 90-day clock. 
However, whether systems changes are needed and how long they may take 
to implement will be reflected in the effective date contained in the 
NCD.
    Track #3: Internally Generated Request.
    We may generate a request to make an NCD in the interest of the 
general health and safety of Medicare beneficiaries. Generally, this 
process is similar to the externally generated request process.

F. NCD Reconsideration Process

    When an NCD currently exists, any individual or entity may request 
that we reconsider any provision of that NCD by filing an acceptable 
request for an NCD reconsideration. We will consider a request to 
revise an existing NCD at any time, but only if the requestor presents 
documentation that meets either of the following criteria:
    [sbull] Additional material medical and/or scientific information 
that was not considered during the initial review, that is, results 
from new clinical trials, new scientific or medical publications, or 
studies supporting the request.
    [sbull] Arguments that our conclusion materially misinterpreted the 
existing evidence at the time the NCD was made.
    [sbull] If the request is for reconsideration of the benefit 
category determination, the requestor must recommend a benefit category 
and, in support of the recommendation, submit either (1) new 
information that was not considered during the initial benefit category 
determination, or (2) arguments that our determination decision 
materially misinterpreted the applicable statutory provisions, the 
applicable regulatory provisions, or the existing evidence at the time 
the benefit category determination was made.
    We will not accept a request for reconsideration that is not 
submitted in writing, identified as ``A Formal Request for 
Reconsideration,'' and accompanied by the required, additional, 
supporting information as described more fully in sections IV.B and 
IV.C. Upon receipt of the additional information as outlined above, we 
will consider this a formal request for an NCD reconsideration and 
initiate the reconsideration process. We generally expect to complete 
the reconsideration process and issue a decision memorandum within 90 
calendar days. Our current NCD will remain in effect during the 
reconsideration process until we issue a revised NCD, if applicable.
    A reconsideration of an NCD must be distinguished from a challenge 
to an existing NCD. Under section 522 of BIPA and section 1869(f)(1) of 
the Act, aggrieved parties may elect to challenge an existing NCD. On 
August 22, 2002, we published a proposed rule (67 FR 54534) that 
addresses procedures for the Departmental Appeals Board (Board) review 
process under section 522 of BIPA.
    A request for review of new clinical and scientific evidence that 
was published or available only after the date the initial NCD was 
issued may be submitted as a request for reconsideration. The 
reconsideration of an existing NCD is part of our coverage 
determination process so that our medical and scientific experts have 
an opportunity to examine this new evidence. Thus, a reconsideration of 
an NCD is separate and distinct from an initial NCD request and 
separate from the Board review process under section 522 of BIPA.
    As noted above, because reconsiderations are outside of the strict 
BIPA timeline, they offer several alternative opportunities for 
individuals

[[Page 55639]]

and entities that may make the process more advantageous:
    [sbull] The reconsideration process does not involve a formal 
adjudicatory hearing.
    [sbull] The process may be more collaborative with the original 
clinical reviewers at CMS, with greater opportunity for clarification 
and dialogue.

G. Improvements in the National Coverage Determination Process

    Our 90-day clock for considering or reconsidering coverage requests 
will begin once we have accepted the complete, formal request. 
Acceptance of a complete formal request begins a series of internal 
timeframes over the course of 90 days.
    We will post the acceptance of a complete, formal request on our 
Web site. This initiates a 30-day comment (public input) period, during 
which submission of evidence or other comments relevant to the request 
will be accepted in accordance with section 522(b) of BIPA. During this 
time, the public, including the requestor of the NCD or 
reconsideration, may submit comments and additional information or 
evidence of studies regarding the NCD issue under review. We will 
provide a response to these comments in our decision memoranda.
    There may be times, such as a public health emergency, when there 
is good cause for developing an NCD more rapidly, and we may need to 
reduce the time period for public comment. For instance, in the case of 
a national disaster, it may be necessary to quickly modify an NCD to 
facilitate access to covered services in a particular service area. In 
these emergency situations, we may expedite the development of an NCD 
and reduce the notice and comment period, during which evidence can be 
submitted. For instance, following the flooding in Texas in the summer 
of 2001, we issued an NCD shortly after a request was made in order to 
permit payments for transplant recipients.
    After the close of the 30-day comment (public input) period, we 
will only accept additional information or evidence from the public if 
we request information or during subsequent Medicare Coverage Advisory 
Committee (MCAC) proceedings, if applicable. We must strictly enforce 
the 30-day comment (public input) period, in which evidence can be 
submitted, to ensure that we make timely decisions. We will consider 
and incorporate the relevant public input, and any subsequent 
information received during MCAC meetings, in the decision memorandum 
and before implementing the NCD for the particular item or service.
    We will use the remainder of the 90-day timeframe to research and 
evaluate the NCD request. This process entails, but is not limited to, 
the following activities:
    [sbull] Review pertinent data and scientific literature a requestor 
submits.
    [sbull] Research relevant sources of evidence in addition to 
evidence a requestor submits. These may include, but are not limited 
to, other peer-reviewed medical, technical, and scientific literature, 
recommendations of expert panels, unpublished data used to secure FDA 
approval, and clinical experience.
    [sbull] Formulate inclusion and exclusion parameters for literature 
searches.
    [sbull] Develop analytic questions needed for subsequent policy 
formulation.
    [sbull] Determine whether the issue warrants further review either 
by the MCAC or through a health technology assessment (HTA) from an 
agency such as the Agency for Healthcare Research and Quality (AHRQ).
    [sbull] Evaluate all pertinent evidence.
    In general, by the end of the 90-day period following formal 
acceptance of an NCD or reconsideration request, we will issue a 
decision memorandum on that request. We will outline, in a decision 
memorandum, one of the following three actions:
    (1) Our intention to issue an NCD, with or without limitations.
    (2) Our intention to issue a national noncoverage determination.
    (3) A determination that an NCD or a noncoverage determination is 
not appropriate at the present time.
    We will provide notice if we determine that additional time will be 
necessary to complete an NCD review. We will identify the remaining 
steps in the review process and the deadline by which we will complete 
the review and take an action described in (1), (2), or (3) above. This 
option may include such actions as referring the request to the MCAC or 
to a third party for an HTA as described in section IV.H of this 
notice.
    A decision memorandum is not an NCD, but rather a statement 
announcing our intent to issue policy. The decision memorandum details 
the analysis of the scientific and clinical literature, and provides 
the rationale for the coverage determination. The decision memorandum 
will include the rationale we used in reaching our determination. If we 
make a coverage determination to modify an existing NCD that results in 
a reduction of coverage, in whole or in part, we will also publish a 
notice in the Federal Register and announce our coverage determination 
on our Web site. The decision memorandum is not binding on our 
contractors, and no change in existing policy is effective until we 
publish the revised NCD in the relevant coverage manual or other 
issuance with a specific effective date. Generally, by the end of the 
270-day period following formal acceptance of an NCD or reconsideration 
request, we will make effective the payment changes for an NCD on that 
request.
    We will create and maintain a complete and adequate record of all 
NCDs that are developed. The record will provide an explanation of our 
rationale for an NCD and include the evidence we considered. This 
record will form the basis for any subsequent requests for 
reconsideration of the NCD, and will also serve as the formal record of 
review for any subsequent challenges to the NCD under section 
1869(f)(1) of the Act. Information contained in the record will conform 
to the proprietary data policy in the 522 BIPA final rule.

H. Health Technology Assessments (HTAs)

    During our review of an NCD request, we may require an HTA to 
complete our review. Generally, an HTA provides an independent analysis 
of all scientific and clinical evidence available on a particular 
health care technology. We may request an HTA when there is conflicting 
or complex medical and scientific literature available, or when we 
believe an independent analysis of all relevant literature will assist 
us in determining whether an item or service is reasonable and 
necessary. We may also request an HTA in preparation for an upcoming 
MCAC meeting.
    We will obtain services from the Agency for Healthcare Research and 
Quality, or a third party with the requisite experience in HTA and 
evidence-based medicine to ensure the technical competence and fairness 
of the HTA.
    If we receive a formal request for coverage on an item or service 
for which an HTA is already underway, we will inform the subsequent 
requestor of the status of the pending HTA, as well as an estimated 
time for completion. Any request for an HTA will be reflected on our 
Web site tracking sheet, followed by either the executive summary or 
the full and complete HTA.

I. Medicare Coverage Advisory Committee (MCAC)

    On December 14, 1998, we published a notice in the Federal Register 
(63 FR 68780) announcing establishment of the MCAC, and requesting 
nominations for membership. The MCAC has met

[[Page 55640]]

periodically since September 1999, to discuss coverage issues, make 
judgments about the adequacy and conclusions of existing scientific 
evidence, make recommendations to us about whether particular items or 
services can be considered ``reasonable and necessary'' under title 
XVIII of the Act, and to advise the Secretary on matters relating to 
the interpretation, application, or implementation of section 
1862(a)(1) of the Act. The MCAC operates under a 2-year charter. The 
MCAC charter is available on our Web site.
    The primary role of the MCAC is to provide independent, expert 
advice and assistance to us in making sound coverage decisions based 
upon the reasoned application of scientific evidence. Voting members 
must possess the scientific and technical competence commensurate with 
this purpose. In addition, a consumer and industry representative serve 
as nonvoting members on each panel. To ensure their full participation, 
nonvoting members have access to all information and data (other than 
information exempt from disclosure relating to trade secrets or where 
the disclosure would present a conflict of interest) made available to 
voting members. The MCAC meetings are open to the public, and time is 
allotted for public comment on the particular coverage issue under 
consideration.
    In general, we may refer a coverage issue to the MCAC if it meets 
any of the following conditions:
    [sbull] It is the subject of significant scientific or medical 
controversy; that is, there is a major split in opinion among 
researchers and clinicians regarding the medical benefits of the item 
or service, the appropriateness of staff or setting, or some other 
significant controversy that would affect whether the item or service 
is ``reasonable and necessary'' under the Act.
    [sbull] It is the subject of controversy among the general public.
    [sbull] It has the potential to have a major impact on a target 
population of the Medicare program.
    If we refer a coverage issue to the MCAC, we will schedule a public 
meeting to discuss the coverage issue under consideration. All MCAC 
meetings are subject to the requirements of the Federal Advisory 
Committee Act. We will publish a notice in the Federal Register 
generally 30 days before holding an MCAC meeting. We will announce in 
our notice the draft agenda, time, and place of the meeting so that all 
interested persons will have ample notification. During the course of 
each meeting, there will be time allotted for public comment. We ask 
that all requests for presentation and consideration of evidence to the 
MCAC, submit a request to us in writing at least 20 days before the 
meeting. The MCAC considers all available evidence, presentations, and 
comments. The MCAC makes recommendations to us. Those recommendations 
are advisory.
    We expect the MCAC to make recommendations as expeditiously as 
possible. We will provide an estimate of when we believe we will 
receive the MCAC recommendation. Once the MCAC makes a formal 
recommendation, we will post it on our Web site. Generally, within 60 
calendar days of receiving the formal MCAC recommendation, we will 
issue a decision memorandum. In the decision memorandum, we will 
explain the MCAC recommendation, and how it was considered in our final 
determination.

J. Implementation of National Coverage Determinations

    The general 90-day clock for NCD and reconsideration requests 
described for individuals who are not aggrieved parties or aggrieved 
parties who elect the collaborative approach includes time for the 
analysis, processing, and development of a decision memorandum. Upon 
making a decision, numerous internal, related steps remain before a 
payment change can take place. We must determine which codes the 
providers, suppliers, and Medicare contractors will use for submission 
and payment of claims consistent with the decision and issue 
corresponding instructions. We must also determine the appropriate 
Medicare payment level. As previously mentioned, coding and payment 
decisions are not included within the definition of an NCD for purposes 
of a Board review. Finally, NCDs often require us to develop and issue 
claims processing instructions to our systems maintainers and Medicare 
contractors to ensure accurate payment. Medicare contractors generally 
implement systems changes at the start of a calendar quarter, and 
instructions are required well in advance of the beginning of each 
quarter in order to install and test the systems changes.
    The NCD (issued as a program memorandum, manual instruction, 
Federal Register notice, or CMS ruling) will include the effective date 
when our Medicare contractors will implement any change in payment that 
may result from the NCD. Generally, we expect to make a payment change 
effective within 180 calendar days of the first day of the next full 
calendar quarter that follows the date we issue the decision 
memorandum. As stated previously, an NCD is binding on all Medicare 
contractors; that is, carriers, FIs, QIOs, HMOs, CMPs, and HCPPs. NCDs 
that expand coverage are binding on Medicare+Choice plans. We will also 
publish a reference to each national coverage decision in the Federal 
Register as part of our quarterly listing of program issuances.

K. Essential Differences in This Notice

    In summary, this notice distinguishes between the two tracks 
available for an external party to request a new NCD when no NCD 
currently exists. For an initial request, the highly time-structured 
track is only available to aggrieved parties, as defined in section 522 
of BIPA. The other track is open to anyone, including aggrieved 
parties, beneficiaries, and manufacturers, and offers a more 
collaborative and less time-stringent process. We also explain the 
steps that anyone can take to request a reconsideration of an existing 
NCD.

L. How To Access CMS's Home Page

    Our home page can be accessed by entering ``http://www.cms.hhs.gov.'' To access information about our coverage process, 
select ``Development of Coverage Policies'' and then ``Medicare 
Coverage Process,'' or http://www.cms.hhs.gov/coverage.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act (PRA) of 1995, we are required to 
provide 60 days notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of PRA requires that we solicit 
comment on the following issues:
    [sbull] Need for the information collection and its usefulness in 
carrying out the proper functions of our agency. ?
    [sbull] Accuracy of our estimate of the information collection 
burden.
    [sbull] Quality, utility, and clarity of the information to be 
collected.
    [sbull] Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    However, the collection requirements referenced in section IV.B 
``What Constitutes a Complete, Formal Initial Request for a National 
Coverage Determination or Formal Request for Reconsideration'' of this 
notice, are currently approved under OMB approval number 0938-0776.

[[Page 55641]]

VI. Regulatory Impact Statement

    We have examined the impacts of this notice as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review) 
and the Regulatory Flexibility Act (RFA) (September 19, 1980 Pub. L. 
96-354). Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more annually). Since this notice 
revises the process we will use to make an NCD for a specific item or 
service and has no economic impact on the Medicare program, we have 
determined this is not a major notice.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $5 to $25 
million or less annually. We have determined that this notice will not 
have a significant economic impact on a substantial number of small 
entities. We believe that few small entities will submit requests. We 
estimate that approximately five beneficiaries or small entities may 
submit a request in a year.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must 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 that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds. We have determined that 
this notice will not have a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. We have determined that this notice will not 
have a consequential effect on the governments mentioned or on the 
private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State, 
local, or tribal governments, preempts State law, or otherwise has 
Federalism implications. We have determined that this notice does not 
significantly affect the rights, roles, and responsibilities of State, 
local, or tribal governments.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

    Authority: Sections 1862, 1869(f), and 1871 of the Social 
Security Act (42 U.S.C. 1395y, 1395ff(b)(3), and 1395hh).

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare-Hospital Insurance; and Program No. 93774, Medicare-
Supplementary Medical Insurance Program).


    Dated: September 15, 2003.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: September 15, 2003.
Tommy G. Thompson,
Secretary.
[FR Doc. 03-24361 Filed 9-25-03; 8:45 am]
BILLING CODE 4120-01-P