CODE OF
FEDERAL REGULATIONS
TITLE 1--GENERAL
PROVISIONS
CHAPTER
III--ADMINISTRATIVE CONFERENCE OF THE UNITED
STATES
PART
305--RECOMMENDATIONS OF THE ADMINISTRATIVE
CONFERENCE OF THE UNITED STATES
1 C.F.R. s 305.87-8
s 305.87-8 National
coverage determinations under the Medicare
Program.
In 1986, the
Administrative Conference undertook a broad
overview of the administrative procedures employed
by the federal government (primarily the Health
Care Financing Administration within the Department
of Health and Human Services) in administering and
deciding appeals under the Medicare program.
Recommendation 86-5, Medicare Appeals, 1 CFR
305.86-5, urged the Health Care Financing
Administration (HCFA) to improve its system for
publishing, updating, and making accessible the
standards, guidelines and procedures used in making
coverage and payment determinations in the Medicare
program. The recommendation also suggested some
improvements in the administrative appeals system
and listed some fruitful areas for further
research.
This recommendation builds
on Recommendation 86-5 by focusing on a major
aspect of the Medicare program: the making of
policy concerning what aspects of medical care are
covered by, and therefore reimbursable by, the
Medicare program. Implementation determinations
must be made every day on a case-by- case basis by
Medicare contractors (peer review organizations,
carriers and fiscal intermediaries such as Blue
Cross). In most of these cases the coverage
question involves a determination of whether an
item or service was medically necessary for the
individual or was furnished in the appropriate
setting. Typically, the Medicare contractor has
considerable discretion in ruling on individual
claims although that discretion is bounded by
policy pronouncements made in various ways by HCFA.
If an individual claim for reimbursement is denied
by the Medicare contractor, the claimant (whether a
beneficiary or provider of care) may appeal the
denial of claims over $500 to an administrative law
judge and then further appeal to a federal district
court for claims over $1,000. Recent legislative
restrictions, however, have further limited
claimant's opportunities to challenge coverage
determinations in court or before an ALJ, and it is
difficult for equipment manufacturers to
participate in or challenge national coverage
determinations even though their financial stakes
can be significant.
HCFA makes coverage policy
in a number of ways. [FN1] In some cases
Medicare contractors refer questions about new
medical procedures or technologies to the HCFA
regional or national office which makes an informal
judgment for application in that case. In other
cases HCFA makes "national coverage determinations"
which apply in all future similar cases. Since the
beginning of the program HCFA (and its predecessor
agency) have made about 200 such national
determinations on medical procedures and
technologies, and the number made each year is
growing. However, in its recent Federal Register
notice, HCFA stated that a "national coverage
determination" included any coverage policy
published in any HCFA manual. Such rulings are
published either in the Federal Register or the
Medicare Coverage Issues Manual, although many
other coverage policies are published in other
manuals that are less widely available, and are not
designated as national coverage determinations.
[FN1] HCFA's
procedures for making national coverage policy had
not been published until April 29, 1987, when under
court order, the agency issued a notice in the
Federal Register describing its process (though not
its criteria) and sought comments.
Although the making of
these national coverage determinations constitutes
rulemaking, HCFA does not use a notice-and-comment
procedure in most cases. HCFA's Bureau of
Eligibility, Reimbursement and Coverage normally
simply makes rulings on coverage determinations
referred from contractors unless it determines that
a medical question is presented. In such cases the
question is referred to the in-house HCFA
Physicians Panel which meets in private to decide
on these referrals. The Physicians Panel may
recommend a further referral to the Public Health
Service's Office of Health Technology Assessment
(OHTA). Most referrals to OHTA are in the form of
informal inquiries, without public notice, after
which OHTA simply conducts in-house investigations
and reports back to HCFA. Requests for full OHTA
assessments, on the other hand, usually result in a
Federal Register notice, and widespread
consultation with affected groups. In either event
OHTA makes a recommendation to HCFA which then
makes and publishes the determination. Only then
are the OHTA findings disclosed.
Except in these "formal
OHTA assessments," beneficiaries, providers and
manufacturers have no opportunity to participate in
this policymaking process. Nor are the criteria
used by HCFA and the Medicare contractors in making
this policy identified or published. Moreover, once
the policy is announced, opportunities to challenge
it have been severely circumscribed by the 1986
Omnibus Budget Reconciliation Act. (Pub. L. 99-509,
9341; 42 U.S.C.A. 1395ff(b)(3) (1987)). The Act
provides that administrative law judges may not
review national coverage determinations in
administrative appeals. It also limits judicial
review by providing that national coverage
determinations may not be held unlawful on the
grounds of violation of the AP or lack of
opportunity for public comment, and further
provides that reviewing courts cannot overturn a
denial based on coverage determinations without
first remanding to HHS for supplementation of the
record.
In Recommendation 86-5,
the Conference recommended that HHS "introduce more
openness and regularity" into these important
determinations through "(1) [d]evelopment
of published decisional criteria; (2) providing for
notice and inviting comments in such cases, both in
HCFA's decisionmaking process and in the process by
which [OHTA] supplies recommendations to
HCFA; and (3) providing for internal administrative
review or reconsideration of such decisions." The
Conference commends the recent HCFA notice and
request for comments on its procedures as a good
first step, but urges that further steps be taken
to open up the decisional criteria and procedure to
public participation and also urges Congress to
consider modifying the statutory limitations on the
review of the reasonableness and the procedural
fairness of such national coverage
determinations.
Recommendation
1. Publication of
Procedures and Criteria Through
Rulemaking
The Health Care Financing
Administration (HCFA) should continue its recent
steps toward describing and seeking comments upon
the procedures it uses for making national coverage
determinations in the Medicare program. HCFA should
follow its recent informational notice with a
notice-and-comment rulemaking proceeding setting
forth the procedures as well as all decisional
criteria for making national coverage
determinations.
2. Elements of the
National Coverage Determination Process
HCFA's proposed and final
rule on national coverage determinations procedures
and criteria should:
(a) Specify the procedure
by which HCFA selects coverage questions that will
be considered in this process;
(b) Identify and describe
what categories of coverage issues will be left to
the decision of Medicare contractors and HCFA
regional offices; and address the extent to which,
and the manner in which, significant coverage
determinations made by contractors and regional
offices can be identified and disseminated more
widely;
(c) Provide for the
opportunity for public comment prior to
promulgation (or if that is infeasible, an
opportunity for comment after adoption)
[FN2] of all national coverage policies
whether or not the determination is referred to the
HCFA Physicians Panel or to the Office of Health
Technology Assessment;
[FN2] The agency
should then re-evaluate the policy after receiving
comments. See ACUS Recommendation 76-5,
Interpretive Rules of General Applicability and
Statements of General Policy, 1 CFR 305.76-5.
(d) Establish internal
management controls to facilitate the timely
processing of requests from Medicare contractors
and petitions filed by beneficiaries, providers and
other affected persons for initiation of a national
coverage determination; [FN3]
[FN3] See ACUS
Recommendation 86-6, Petitions for Rulemaking,
Para. 2(d), 1 CFR 305.86-6(2)(d).
(e) Develop techniques to
encourage the HCFA Physicians Panel, the Office of
Health Technology Assessment, and the Public Health
Service to respond expeditiously to referrals;
and
(f) Identify all
publications in which coverage policy will be
published, and the method by which those
publications will be made reasonably accessible to
beneficiaries and other affected groups.
3. Use of Negotiated
Rulemaking
In addition to providing
for a national coverage decisionmaking process that
accords beneficiaries, providers, equipment
manufacturers and other interested parties an
opportunity to have input into the formulation of
specific national coverage determinations; HCFA
should in appropriate cases also consider use of
elements of a negotiated rulemaking procedures.
[FN4]
[FN4] See ACUS
Recommendations 82-4 and 85-5, Procedures of
Negotiating Proposed Regulations, 1 CFR 305.82-4,
85-5.
4. Modification of
Recent Legislative Restrictions on Administrative
and
Judicial Review
Congress should reconsider
and, at minimum clarify its intent, [FN5]
with regard to the recent restrictions it placed
upon administrative and judicial review of national
coverage determinations. In so doing, Congress
should:
[FN5] In
particular, Congress should, for the purposes of
these restrictions, clarify its definition of
"national coverage determination" and explain
whether or not policies other than those concerning
medical procedures and technologies and published
in the Federal Register or Medicare Coverage Issues
Manual are included.
(a) Consider whether to
clarify the restriction against administrative law
judge review of national coverage determinations
[42 U.S.C.A. 1395ff(b)(3)(A)] by (i) making
clear that administrative law judges may review the
application of such determinations to claimants and
(ii) Specifying that this limitation only applies
to those national coverage determinations that are
properly published and indexed, and that have been
issued after an adequate opportunity for public
comment.
(b) Consider repealing 42
U.S.C.A. 1395ff(b)(3)(B), which restricts judicial
review of procedures used in promulgating national
coverage determinations.
(c) Eliminate the
provision [42 U.S.C.A. 1395ff(b)(3)(C)]
that limits reviewing courts' ability to review the
validity of a national coverage determination
applied in a particular case without first
remanding the case to the agency for
supplementation of the record.
[52 FR 49144, Dec. 30,
1987]
Authority: 5 U.S.C.
591-596.
SOURCE: 38 FR 19782, July
23, 1973; 57 FR 61760, 61768, Dec. 29, 1992, unless
otherwise noted.
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