Monday, February 2, 2015

The Forgotten "Coverage with Evidence Development": HCFA and Heart Transplants

"Coverage with Evidence Development" (CED) has received increasing attention since 2006, when CMS authorized the National Oncologic PET Registry to track and monitor expanded use of PET scans in less-common cancers.   By 2012, total scans in the program had exceeded 200,000 (here), which, at $1000 per scan, represents over $200M of nuclear imaging tests conducted under a "real-world evidence" paradigm.  By comparison, the Obama Precision Medicine Initiative, announced with much fanfare in January 2015, has been proposed with a budget of...circa $200M.

A search of the phrase "Coverage with Evidence Development" at PubMed yields over five dozen hits (e.g. here).  The Medicare agency maintains a webpage for "Coverage with Evidence Development" programs (here), and recently updated its policy guidance for CED (here).   Two Medicare contractors, Novitas and Palmetto GBA, have published guidance for local CED programs (e.g. MolDX Manual, accessed 2/3/2015, page 6, here).   The Center for Medical Technology Policy, headed by Sean Tunis, has a webpage devoted to CED white papers and articles (here).  Tunis  has authored numerous articles on CED (e.g. here).   Finally, on the Hill, in early 2015, draft legislation proposed additional authorities for Medicare's implementation of CED (see here, title II, Section H.)

Arguably, the first clear example of the CED concept actually occurred 35 years ago.

Update: See also, Evans RW et al, Insurance coverage of heart transplantation in the United States, J Heart Lung Transplant 36:1294 (2017), PMID 29173390.  I did not have this at the time of writing.  Evans covers many of the same historical documents in a peer-reviewed format.

Casscells, NEJM 1986
This case study, beginning in 1980, describes Medicare's initial approach to coverage heart transplants.  I've uploaded a bundle of 12 archival documents on the topic [ZIP file HERE], and I'll summarize them below.

An entry point to the topic is the later 2000 NCD for heart transplants and facilities (here), as revised in 2000 by Dr. Sean Tunis in his role as Director of the Coverage Group. The NCD opens by citing several of the decades-old federal documents discussed below (and provided in the ZIP file.)  

August 1980
HCFA Moratorium on Coverage
      In a Federal Register notice (45 FR 52297, 8/6/1980), HCFA stated that it had provisionally covered heart transplants, at Stanford Medical Center, beginning in November 1979.  The August 6 notice then announced that based on further agency review, heart transplant coverage was excluded from Medicare, effective June 13, 1980.
     The document, titled HCFA Ruling 80-1, explained that the coverage that began in November 1979 and ended in June 1980 was based on a relatively favorable Public Health Service study of the clinical success of Stanford heart transplants.  Up until summer 1980, further study of the "provisional" coverage was underway at HCFA.  However, the HCFA policy process was disrupted in March 1980, when an Administrative Law Judge authorized coverage for a heart transplant at the University of Arizona - outside the control of HCFA central policy staff decisions.
     Invoking 1861(a)(1)(A), that expenses cannot be covered for "services which are not reasonable and necessary for the diagnosis or treatment of illness," CMS abruptly terminated its tentative authorization of heart transplant coverage.  Coverage was continued only for the care of transplants performed prior to June 13, 1980, and for "candidates accepted" before that date.   For those curious about the politics, August 1980 was in the closing months of the Carter administration.

August 1980
Science New Article
     According to a news article in Science, HHS Secretary Patricia Harris stated that "this reimbursement and coverage decision would be the first to be based not just on safety and efficacy but also on cost effectiveness."  The article also includes a discussion of whether HHS had legal authority to a priori limit a covered service to coverage at only certain selected institutions. HHS general counsel admitted there were no clear provisions in the law that would "normally permit" reimbursement for the same procedure at one hospital but not another.
     The article notes that heart transplant coverage had surprised HCFA officials in 1979, because Medicare's local California claims processing contractor had been paying Stanford claims for several years, without explicit central office policy review.  The article also reported that the March 1980 Arizona patient, who won his case with an administrative law judge, had the support of Barry Goldwater.
     Science, 209:570-572, August 1, 1980, here; discussed also by Casscells (1986), NEJM 315:1365.

January 1981
Time-Limited Coverage, with Controlled Data Collection and Funded Analysis
      Six months later, in a Federal Register notice (46 FR 7071, 1/22/1981), and two days after the Reagan inaugural, hospitals and medical centers were "invited to participate in a study of heart transplants conducted by HCFA."  The study  was designed to "examine all aspects of heart transplantation, including the scientific, social, economic, and ethical issues, and in particular, the impact of a possible medicare decision to pay for heart transplants on the Medicare program."  Hospitals would be "reimbursed for a limited number of heart transplants" if they "furnish data about [them]" and they will be "reimbursed for the costs of furnishing this information."  
      HCFA added that key data for some complex considerations did not exist...including data necessary to allow HCFA to assess "the cost effectiveness of the procedure."  
      The study was to be conducted "in close cooperation with the National Center for Health Care Technology" [the precursor to AHRQ].  
      HCFA envisioned that medical centers would apply for acceptance into the program, and that in an 18 month period (May 1981-October 1982) HCFA would pay for approximately 15 heart transplants.  HCFA would convene expert panels to review and select the medical centers based on dossiers submitted.  In selecting patients, institutions should view "advancing age...normally above age 50" as a "strongly adverse factor."  

June 1986
Press Precedes Official Publication
     HCFA announced a decision on heart transplant coverage would be released soon.  In making this early announcement, the HHS Secretary forecast 65 procedures in FY1987 and 143 procedures in FY1991 (Lissovoy, 1988, see below).   (For comparison, from 2000-2010, Medicare-covered heart transplants were level at ~500 per year.)
     Citation:  Footnote 1 ("HHS News, 6/27/1986") in Renlund, NEJM 316:873, April 2, 1987.  (See below).

The Battelle Report (1985)

October 1986
The Controlled-Coverage Proposal
     In a Federal Register notice (51 FR 37164, 10/17/1986), HCFA proposed "Medicare coverage of heart transplantation under certain circumstances."   The agency opened a 30 day public comment period.
     HCFA reported that the 1981 program had resulted in participation by six medical centers, and the Battelle consultancy had evaluated data for 441 recipients, including 152 living recipients, transplanted between 1968 and June 1983.  The exact number of interval Medicare-covered transplants was not stated.
    The coverage policy proposal noted that "Post-transplant [Part B] care would not include outpatient, self-administrable drugs, such as cyclosporine, since coverage is excluded by 1861(s)(2) of the Act." The lack of cyclosporine coverage to keep patients alive post-transplant was not further addressed -- except for a final criterion at the end of the policy proposal that "long term adherence to a medical regimen must be feasible and realistic" for each patient.
     There were several paragraphs of technical discussion of the DRG valuation process under which "DRG 103 will have the highest relative weight of the 473 DRGs."  A two-page description of criteria for transplant patients and facilities was provided (revised from the 1981 criteria for the pilot program.)  "The facility must demonstrate actuarial survival rates of 73 percent for one year and 65% for two years."  Age was extended from age 50 to age 55 or "54 to 57."
     The budget impact (under Executive Order 12291) was estimated to be less than $100M.

November 1986
Casscells Analysis in NEJM
   The New England Journal published an essay describing the CMS proposed policy just discussed, and providing a retrospective policy history.  The author, MGH's Dr. Casscells, noted that several times in recent years MGH had determined not to start a heart transplant program "because it would not provide the greatest good for the greatest number."  He also referred to the "spiral of costs" from the end stage renal disease program.   The heart transplant policy issue was described as "a long, wrenching debate...opponents argued that total health expenditures can no longer be allowed to increase and that the funds would be better spent in guaranteeing conventional care....".   He noted that heart transplant centers had "rapidly proliferat[ed] from 11 in 1983 to more than 80 in 1985."  He recalled that in January 1984, "the commissioner of public health of Massachusetts took the unprecedented step of telling the New England Medical Center that it could not perform the first heart transplantation in New England."   Though not directly related to the "coverage" of transplantation, the Gore-Hatch National Organ Transplantation Act of 1984 (PL 98-507) authorized $31M for organ procurement.
     Casscells records that prior to the favorable coverage announcement of June 1986, "the Reagan the 11th hour had blocked an announcement on coverage by the previous secretary of HHS, Margaret Heckler [she was at HHS 1983-1985]."
     Casscells noted that the heart transplant policy project had involved a "$1.6M report."
     Casscells W (1986) Heart transplants: recent policy changes, NEJM 315:1365-8.   For a more on Casscells, see here and here.

April 1987
Renlund Article in NEJM
   The New England Journal published an essay about the new Medicare coverage (April 2, 1987).  The essay appeared several days before the finalization of the heart transplant policymaking and was focused on a discussion of the October 1986 proposal.
     One key concern was that future transplant coverage would be biased toward six centers funded under CED and biased against new centers which necessarily would have shorter track records.   Medicare proposed that Medicare payment could begin only for centers that had had 24 successful transplants in 2 years.  Renlund DG et al. (1986) Medicare-designated centers for heart transplanation.  NEJM 316:873-6 (4/2/1986).   

April 1987
The Heart Transplant Coverage is Finalized
     In a Federal Register notice (52 FR 10935, 4/6/1987), the October 1986 proposal was finalized.
    The publication was 18 pages long, including extensive public comment and response.  One commentator argued the rules were based on outdated 1984 data.  Several commenters opposed the rule because of cost or because it would detract from "whole body health improvement programs."  There was a request that artificial hearts be covered as a bridge to transplant (not enough success yet.)
     Numerous commentators objected to the non coverage of immunosuppressant drugs.  HCFA noted that four days after the prior publication, Congress enacted legislation to cover such drugs for one year post transplant (OBRA 1968, PL 99-509, 9335(c), amending 1861(s)(2)).
     One comment suggested that the extensive and wide ranging requirements listed exceeded HCFA's statutory authority, but HCFA responded the requirements were deemed to flow from 1861(s)(1)(A).   There was a policy announcement that Medicare HMO's were required to cover heart transplants only at an approved facility.  Finally, HCFA noted that "it was not our intent to dictate practice of medicine" and that patient selection criteria (such as age) were not absolute.  

Fall 1988
Lissovoy Questions HCFA Projections
    Article in Health Affairs, focused in part on the "sharply differing estimates for a new prescription drug benefit" and the history of exploding unexpected expenditures of the ESRD program, and asking whether the heart transplant program will be another example in the series.   Lissovoy G (1988) Medicare and heart transplants: Will lightning strike twice?  Health Affairs 7:61-72.
     Lissovoy opens by citing contemporary opinion: "The Washington Post called HCFA's heat heart transplant decision a major policy change that would begin 'anew era for the government...opening the door for dcisions in the future on liver, pancreas, and other such transplant procedures.' "  But he adds that, "Other observers saw no such policy change, but, history repeating itself: like the end stage renal disease program, heart transplantation would become another burden on the strained Medicare trust fund."
     Lissovoy states that by this date, 1988, most commercial and BCBS plans covered heart transplants.
     The main point of his article is to argue that Medicare estimates of 165 transplants per year will be low, but the number is likely to be 200-400.  Even with this figure, there will be no explosion of costs as occurred for kidney transplants.  In fact, as far out as 2000-2010, heart transplants under Medicare were steady at ~500 per year.
     Lissovoy is currently at Johns Hopkins (here).

November 1988
Additional Contemporary Articles
    Editorial Comment, Renlund DG et al. (1988) Cardiac Transplantation.  The Need for prospective, randomized, controlled investigations.  West J Med 149:583-5.
  Article, Stevenson LW et al. (1988) Cardiac transplantation.  Selection, immunosuppression, and survival.  West J Med 149:572-82.

Spring, 1989
Evans Responds to Lissovoy (Letter)
     Article, Evans RW (1989)  Studying heart transplants and technology assessment.  Health Affairs 8:187-89.  This was a letter to the editor prompted by the prior Lissovoy article (7:61-72).
     Evans was the author of the Battelle report on the interim HCFA experience with heart transplant coverage.[See *]  He states that Lissovoy "provides little more than a series of misconceptions as to the coverage/reimbursement decision making within HHS" and that "little is to be gained by developing worst-case scenarios."
     In response to concerns that the transplants were profitable, Evans states that Medicare reimbursement was "undoubtably, in most instances, inadequate to cover actual hospital costs."  Evans adds that HCFA's program for center enrollment for eligibility represents "a unique blend of competition and regulation."   

April, 1997
HCFA on Coverage: 1990s Testimony
   I have included House Ways & Means testimony by Bruce Vladeck, HCFA administrator on "Medicare Coverage Policy."  Heart transplant policy is not a topic but he mentions that bridge-to-transplant technology has recently been covered.  The testimony (18pp) provides a window into federal coverage policy issues of the mid 1990s.  

May, 1997
Who Gets a Heart?
  Allen MD et al. (1997) Who gets a heart?  Rationing and rationalizing in heart transplantation.  West J Med 166:326-36.

December, 2000
The Modern NCD Era: The 2000 Revision
   HCFA Change Request 1378, Transmittal 1817, updating the Claims Processing manual for heart transplant criteria.  Coverage policy was revised in July, 2000 (see that revised NCD, authored by Sean Tunis,  here.)

[*] Footnote:
The Battelle Report and Sister Publications
The Battelle study is available online in PDF or machine-read text, and two related peer-reviewed publications are also available online.  For the Battelle study, "National Heart Transplantation Study," Evans RW et al., May 1985, 166pp, see here.  The report was written in five volumes; the table of contents alone is over 40 pages long.  (Note - the University of Washington's well-known public health expert Lou Garrison is 4th author).  The Battelle report expected first year costs per transplant to be about $76,000 ($173,000 today) and the cost per life year gained about $23,000 ($52,000 today).   There were several follow-on publications.  Economic publication as: Evans RW (1987) The economics of heart transplantation. Circulation 75:63-76, online here.  Health outcomes data as: Evans RW & Maier AM (1986) Outcome of patients referred for cardiac transplantation.  J Am Coll Cardiol 8:1312-17 (here).  Evans' current Linked-In page, here.

Battelle Report, 1985


For a bit more on the extinct National Center for Health Care Technology, see hereherehere, and here.

For a scholarly journal review of transplant policy history, see:  Rettig RA (1989) The politics of organ transplantation: A parable for our time.  J Health Politics Policy Law 1:191-227 (here).

For a 2012 New York Times piece on heart transplants in older patients, see here.

For a 2017 article on the history of the Barnard and first US transplants, see Shelley McKellar, NEJM, here.  Her book, 'Artificial Hearts," will appear in January 2018 (here).

Update.  By the 2020 era, transplants run about 600 per year in FFS Medicare (code 33945).  Last time I checked the DRG was $100K-200K.  Even at $500K, that's $300M per year, about 1/1000 of a $300B program.