Practical Advice for Medical Devices Firms | Page 8

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Coverage decisions by the Center for Medicare and Medicaid
Services
The Center for Medicare and Medicaid Services is tasked with paying for
services and items that are reasonable and necessary. A majority of the
time coverage decisions are made by local carriers, but decisions can be
based on a National Coverage Decision issued by the Center for Medicare
and Medicaid Services. Each year the Center for Medicare and Medicaid
Services issues approximately 10-15 National Coverage Decisions for
technologies that they feel will have a major impact on healthcare. They
take into account the quality of individual studies and prefer data from
randomized controlled trials. Key opinion leader recommendations may
also be considered. There must be sufficient evidence to demonstrate a
product or service is medically beneficial for the Medicare population. A
National Coverage Decision determination is binding on all Medicare
carriers, fiscal intermediaries, quality improvement organizations, health
maintenance organizations, competitive medical plans, and healthcare
prepayment plans (American College of Radiology, 2011).
From 1999 to 2007, approximately 60% of National Coverage Decision
applications resulted in approval (Neumann et al, 2008). However, there
are usually restrictions placed on the clinical condition, population, or
setting in which the treatment can be administered. Increasingly the
Center for Medicare and Medicaid Services has paid attention to whether
use of devise leads to relevant outcomes or has applicability to the
Medicare population.

Importance of HCPCS codes in new product reimbursement
Obtaining Healthcare Common Procedure Coding System (HCPCS) code is
an extremely important part of the reimbursement process for a new
medical device. Level II of the HCPCS is used primarily to identify
products, supplies and services not included in the Current Procedural
Terminology codes such as ambulance services, durable medical
equipment, prosthetics, orthotics, and supplies (U.S. Dept. of Health &
Human Services, 2010). The Center for Medicare and Medicaid Services
has the authority to distribute HCPCS level II codes. The codes offer a
means of indicating to the Center for Medicare and Medicaid Services
and private carriers what supplies they are paying for. The Center for
Medicare and Medicaid Services, America’s Health Insurance Plans, and

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