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Senators Introduce Bill to Make Medicare Local Coverage Decision Process More Transparent

NEW YORK (GenomeWeb) – Four US Senators introduced a bill yesterday seeking to improve transparency and accountability within the local coverage determination process by which Medicare adminsitrative contractors (MACs) establish pricing for diagnostics.

A copy of the bill, introduced in the Senate Finance Committee by Johnny Isakson (R-GA), John Boozman (R-AR), Debbie Stabenow (D-MI), and Thomas Carper (D-DE), had not been uploaded to at press time. However, AdvaMed, a group representing the interests of diagnostic and device makers, is familiar with the contents of the bill, and issued a statement in its support. A similar bill, S. 3392, was introduced last year.

According to AdvaMed, the latest bill, S.794, would require Medicare contractors to hold public meetings, disclose the rationale and evidence underlying an LCD at the start of the process, make changes to the reconsideration process for an LCD, and restrict contractors from adopting a decision made in another jurisdiction without having done an independent evaluation.

The Centers for Medicare & Medicaid Services use Medicare administrative contractors to establish local coverage for tests they deem to meet the statutory criteria for "reasonable and necessary" interventions. Test providers have to furnish evidence to MACs demonstrating that their tests are "reasonable and necessary," but historically industry players have complained that the coverage process is confusing and lacks transparency.

In 2014, members of the California Clinical Laboratory Association and an elderly woman who was denied coverage for pharmacogenetic testing sued the Department of Health and Human Services alleging that CMS' use of MACs to establish local coverage for lab tests is illegal and unconstitutional. The plaintiffs charged that these MACs' unfavorable and inconsistent diagnostic coverage determinations is depriving Medicare beneficiaries of critical lab tests. 

In 2015, a judge dismissed the case reasoning that the elderly woman hadn't suffered an injury that would merit a lawsuit. HHS had pressed for the court to drop the case, based on the same rationale.

S.794 provides another chance for test developers to voice their dissatisfactions with the existing LCD process. "MACs are responsible for decisions that impact millions of Medicare beneficiaries, determining which technologies, procedures and services are available to them," AdvaMed President Scott Whitaker said in a statement. "Unfortunately, the LCD process MACs use is flawed, lacks transparency, and does not provide meaningful opportunity for stakeholder input or appeals."

Whitaker pointed out that the 21st Century Cures Act also included provisions to improve the LCD process, and that this bill would add "greater transparency, consistency and objectivity in the process, which will ultimately benefit Medicare beneficiaries."