[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Notices]
[Pages 80905-80907]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-33066]


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DEPARTMENT OF DEFENSE

Office of the Secretary


TRICARE Evaluation of Centers for Medicare & Medicaid Services 
Approved Laboratory Developed Tests Demonstration Project

AGENCY: Department of Defense.

ACTION: Notice of Demonstration.

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SUMMARY: This notice is to advise interested parties of a Military 
Health System (MHS) demonstration project under the authority of 
Section 1092, Chapter 55, Title 10 of the United States Code (U.S.C.), 
entitled TRICARE Evaluation of Centers for Medicare & Medicaid Services 
Approved Laboratory Developed Tests Demonstration Project. The 
demonstration project is intended to determine whether it is feasible 
for the Department of Defense (DoD) to review Centers for Medicare and 
Medicaid Services (CMS) approved laboratory developed tests (LDTs), not 
yet examined by the United States Food and Drug Administration (FDA), 
to determine if they meet TRICARE requirements for safety and 
effectiveness according to the hierarchy of reliable evidence (32 CFR 
199.2(b)) and allow those that do to be covered as a benefit under the 
TRICARE Program. The LDTs for this demonstration would be limited to 
only those that significantly inform clinical decision making for 
surveillance, surgical interventions, chemotherapy, or radiation 
therapy for cancer. The demonstration project will provide a valuation 
of the potential improvement of the quality of healthcare services for 
TRICARE beneficiaries who would not otherwise had access to these 
tests. In addition, the demonstration project will evaluate the need to 
modify 32 CFR 199.4(g)(15)(i)(A) to allow coverage for CMS approved 
LDTs.
    Interested LDT device manufacturers, or individual (single) 
laboratories developing their own proprietary tests that have a CMS 
National Coverage Determination (NCD) or Local Coverage Determination 
(LCD) who desire the DoD to consider their tests for coverage under the 
TRICARE Program, are encouraged to submit LDTs for consideration. 
Submissions must include the LDT description and complete documentation 
(including the CMS-assigned determination number) proving CMS National 
Coverage Determination (NCD) or Local Coverage Determination (LCD). 
Submissions will only be accepted for those LDTs which are CMS 
approved, but have not received FDA clearance or approval LDTs will be 
prioritized based on the combination of potential high utilization and 
potential high clinical impact on TRICARE beneficiaries. If no 
submission is received for a LDT and TMA is aware that a NCD or LCD 
exists, TMA may elect to include the LDT in the prioritization process. 
Relevant administrative data on number of diagnoses of specific 
oncological diseases, procedures, treatments, and other requested data 
and information will be used in the prioritization process. The 
prioritized list will be sent to the Director, TMA for approval. The 
approved list will then be reviewed in numerical order beginning with 
the test listed as having the highest priority. Those selected for 
review will be evaluated to determine whether they meet the TRICARE 
hierarchy of reliable evidence for safety and effectiveness as 
described in 32 CFR 199.4(g)(15). LDTs determined to meet TRICARE 
criteria for safety and efficacy will be recommended to the Director, 
TMA for approval for cost-sharing during the demonstration period.

DATES: This demonstration will be effective 30 days after publication 
in the Federal Register. This demonstration will remain in effect for 
three years.

ADDRESSES: TRICARE Management Activity (TMA), Office of the Chief 
Medical Officer, Attn: HB&RM 5111 Leesburg Pike, Suite 810, Falls 
Church, VA 22041-3206.

FOR FURTHER INFORMATION CONTACT: Timothy Stockdale, Office of the Chief 
Medical Officer, TRICARE Management Activity, telephone (703) 681-0075.

SUPPLEMENTARY INFORMATION:

A. Background

    According to 32 Code of Federal Regulation (CFR) 199.4(G)(15)(i)(a) 
the TRICARE Management Activity (TMA) may not cost-share medical 
devices including laboratory developed tests (LDTs) if the tests are 
non-FDA approved, that is they have not received U.S. Food and Drug 
Administration (FDA) marketing 510(k) clearance or premarket approval. 
Under the current regulation cited above, LDT's that have been 
identified as non-FDA approved are summarily denied. In contrast The 
Centers for Medicare & Medicaid Services (CMS), which is not 
constrained by any similar regulation, has a policy that provides a 
mechanism for the review and payment of LDTs meeting the CMS standard 
of reasonable and necessary meaning it is safe and effective, not 
experimental or investigational, and appropriate.
    An LDT is a test developed by a single clinical laboratory that 
provides testing to the public but does not sell the lab kit to other 
labs. In the past, these tests were relatively simple tests used to 
diagnose or monitor diseases and other conditions within a single 
laboratory usually at a local large hospital or academic medical 
center. As a result the FDA has utilized enforcement discretion (where 
the FDA does not enforce some or all applicable laws and regulations on 
certain categories of products) of LDTs and has taken no action to 
remove them from the marketplace.
    The 1976 Device Amendments modified the Federal Food, Drug, and 
Cosmetic Act (FFDCA) to provide for the regulation of medical devices. 
These medical devices are defined broadly in section 201(h) of 21 
U.S.C. 321 to include: ``an instrument, apparatus, implement, machine, 
continuance,

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implant, in vitro reagent, or similar or related articles, including 
any component, part or accessory which is * * * intended for use in the 
diagnosis or disease or other conditions, or in the cure, mitigation, 
treatment or prevention of disease.'' Medical devices include 
laboratory tests also known as in vitro diagnostics (IVDs).
    The FDA authority over IVDs, which includes LDTs, is defined in 21 
CFR 809.33 as: ``those reagents, instruments, and systems intended for 
use in diagnosis of disease or other conditions, including a 
determination of the state of health, in order to cure, mitigate, 
treat, or prevent disease or its sequelae. Such products are intended 
for use in the collection, preparation, and examination of specimens 
taken from the human body.'' The FDA has stated that clinical 
laboratories that develop LDTs are acting as manufacturers of medical 
devices and are subject to FDA jurisdiction under the FFDCA. As noted, 
the FDA has chosen to exercise its ``enforcement discretion'' over many 
LDTs and these tests are routinely sold without FDA approval.
    The Analytic Specific Reagents rule was published in 1997 (21 CFR 
864.4020) where FDA regulates the primary active reagents of laboratory 
developed tests rather than the LDTs themselves. The intent was to 
ensure the quality of the test components and to continue enforcement 
discretion for LDTs.
    During the 2000's LDTs were developed and becoming more complex at 
an increasingly fast pace. In response FDA issued draft guidance 
relating to In Vitro Diagnostic Multivariate Index Assays, a 
particularly complex category of tests in 2007. A final rule has yet to 
be published. Recently in July 2011, the FDA released draft guidance on 
In Vitro Companion Diagnostic Devices which are devices that provide 
information that is essential for the safe and effective use of a 
corresponding therapeutic agent.
    Laboratories are assessed and accredited under quality standards 
set by CMS under the Clinical Laboratory Improvement Amendments (CLIA) 
of 1988. CMS regulates laboratories that use LDTs as well as FDA 
approved tests. Laboratories performing moderate or high complexity 
tests are subject to specific regulatory standards governing 
certification, personnel, proficiency testing, patient test management, 
quality assurance, quality control, and inspections. CLIA certification 
and periodic inspections ensure the analytical validity of laboratory 
tests, including LDTs. Analytical validity refers to how well a test 
performs in the laboratory; that is how well the test measures the 
properties or characteristics it is intended to measure.
    In contrast to TMA, CMS regulations do not have a specific 
requirement that devices be FDA approved. As a result CMS policy 
provides a mechanism for the review and payment of non-FDA approved 
LDTs (Section 522 of the Benefits Improvement and Protection Act). Non-
FDA approved LDTs which meet CMS's standards are approved through its 
National Coverage Determination (NCD) or Local Coverage Determination 
(LCD) process. Once a LDT receives a LCD, it is considered a nationwide 
Medicare covered benefit.

B. Demonstration Project Description

    A demonstration project will be initiated by the TMA to test 
whether CMS approved LDTs which have not received FDA medical device 
510(k) clearance or premarket approval (therefore considered non-FDA 
approved) are safe and effective for cost-sharing for TRICARE 
beneficiaries. The LDTs for this demonstration would be limited to only 
those that significantly inform clinical decision-making for 
surveillance, surgical intervention, chemotherapy, or radiation therapy 
for cancer. The demonstration project will be effective 30 days after 
publication in the Federal Register and will continue for three years 
from the effective date of the original demonstration. The 
demonstration project will establish a process for TRICARE to evaluate 
the subset of non-FDA approved LDTs currently covered by a CMS NCD or 
LCD.
    Upon publication of this Federal Register notification, TMA will 
solicit submissions from LDT device manufacturers and individual 
(single) laboratories which develop their own proprietary laboratory 
developed tests requests for DoD coverage of their LDTs. LDTs with 
current FDA 510(k) clearance or premarket approval will not be 
considered for this demonstration project; but will continue to be 
considered for coverage under the current routine coverage 
determination process of the TRICARE Program. Submissions must include 
evidence of CMS LCD or NCD approval and a statement from the 
manufacturer or laboratory attesting that the LDT has not received FDA 
medical device clearance or approval for marketing. CLIA certification 
is also required and a copy of the certificate should be included. If a 
submission is not received for an eligible LDT, TMA may elect to add 
the LDT to the list for consideration; but a manufacturer should not 
assume that their product will be considered without a submission. 
Submissions will be accepted for 90 calendar days from the date of 
publication of the demonstration project in the Federal Register.
    All submissions will be reviewed by the Department of Defense (DoD) 
Laboratory Joint Working Group (LJWG), appointed by the Director, TMA. 
The LJWG team will be comprised of government clinical and policy 
professionals (DoD employees or active duty service members) to 
include; medical specialists, clinical laboratory medicine specialists, 
and medical benefits specialists. The LJWG will prioritize the list of 
LDTs based on the potential high utilization and potential high 
clinical impact on TRICARE beneficiaries. Administrative information 
from DoD clinical information systems relating to number of diagnoses 
of specific oncological diseases, procedures, treatments, and other 
requested data and information will be used in the prioritization 
process. LDTs used for non-covered conditions or tests related to 
unproven treatments will not be eligible for coverage and thus will not 
be recommended by the LJWG.
    The prioritized list will be submitted to the Director, TMA for 
approval of the test as well as its priority placement on the list. 
Once an approved list has been obtained, a health care technology 
assessment and review for analytical validity, clinical validity, and 
clinical utility will be conducted. All health care technology 
assessments will be based on the TRICARE hierarchy of reliable 
evidence, as defined below, for criteria for safety and efficacy. CLIA 
certification will meet the requirement of analytical validity. 
Clinical validity and clinical utility are defined in the Agency of 
Healthcare Research and Quality (AHRQ) report titled, ``Quality, 
Regulation and Clinical Utility of Laboratory-developed Molecular 
Tests, Project ID: LABC0707. In this report clinical validity is 
defined as: ``test characteristics (sensitivity, specificity, 
predictive values, and likelihood ratios) in other words, the accuracy 
with which a test predicts the presence or absence of a clinical 
condition or predisposition. Clinical utility is defined as: ``whether 
the results of the test can be used to pursue effective treatment or 
provide other concrete clinical benefit,'' that is the usefulness of 
the test and the value of the information to medical practice. These 
standards will be used in determining if an LDT meets the requirements 
for clinical validity and clinical utility.
    The LJWG will conduct a review of the LDT using the evidence which

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meets the hierarchy of reliable evidence as well as the evidence 
outlined above which meet the requirements for analytical validity, and 
clinical validity and utility. The definition of reliable evidence 
which will be used by the LJWG is defined in 32 CFR 199.2(b) and 
includes: ``(i) Well-controlled trials of clinically meaningful 
endpoints, published in refereed medical literature, (ii) Published 
formal technology assessments, (iii) Published reports of national 
medical policy organization positions, (iv) Published national 
professional associations, and (v) Published reports of national expert 
opinion organizations.'' The hierarchy of reliable evidence of proven 
medical effectiveness, established by (i) through (v) of this 
paragraph, is the order of the relative weight to be given to any 
particular source. With respect to clinical studies, only those reports 
and articles containing scientifically valid data and published in the 
refereed medical and scientific literature shall be considered as 
meeting the requirements of reliable evidence. Specifically not 
included in the meaning of reliable evidence are reports, articles, or 
statements by providers or groups of providers containing only 
abstracts, anecdotal evidence or personal professional opinions. Also 
not included in the meaning of reliable evidence is the fact that a 
provider or a number of providers have elected to adopt a drug, device, 
or medical treatment or procedure as their personal treatment or 
procedure of choice or standard of practice. By majority vote the LJWG 
would recommend approval or disapproval to the Director, TMA. Approved 
LDTs would be available for cost-sharing with TRICARE beneficiaries.

C. Final Coverage Decisions

    LDTs (evaluated under the demonstration project) determined by the 
JLWG to meet the TRICARE hierarchy of evidence for safety and 
effectiveness will be recommended to the Director, TMA for decision for 
acceptance for cost-sharing during the demonstration period. LDTs 
approved by the Director, TMA for cost-sharing will follow existing 
processes for inclusion as a TRICARE benefit. Additional information on 
payment methodologies will be included in the operational procedures 
for this Demonstration and will be published in the TRICARE Operations 
Manual found at http://manuals.tricare.osd.mil/.

D. Implementation

    The demonstration is effective 30 days after publication in the 
Federal Register and will continue for a period of three years from the 
date of the original demonstration unless terminated earlier by the 
Director, TMA. LDTs approved by the Director, TMA during the 
demonstration period will become available for cost-sharing for 
qualified TRICARE beneficiaries during the demonstration period. Should 
the FDA issue final guidance on and or enforcement of the requirement 
for prior marketing approval, the Director TMA will terminate the 
demonstration and the DoD will ensure compliance with applicable 
federal law and regulations.

E. Evaluation

    An evaluation will be conducted during the third year of the 
demonstration period to determine how many TRICARE approved LDTs were 
provided to beneficiaries across all TRICARE Regions. The evaluation 
will also include a review of the LDT review and recommendation 
process. These results of the evaluation will provide a valuation of 
the potential improvement of the quality of healthcare services for 
beneficiaries who would not otherwise had access to these safe and 
effective tests. Based on the utilization results, a decision will be 
made to modify 32 CFR 199.4(g)(15)(i)(A) to remove the restriction for 
non-FDA approved devices and allow TRICARE cost-sharing of CMS approved 
LDTs determined to meet the TRICARE criteria for safety and 
effectiveness.

    Dated: December 21, 2011.
Aaron Siegel,
Alternate OSD Federal Register Liaison Officer, Department of Defense.
[FR Doc. 2011-33066 Filed 12-23-11; 8:45 am]
BILLING CODE 5001-06-P