Hospitals and medical devicemakers are turning up the heat in their campaign to win Medicare and Medicaid payment for the use of investigational technology.
Earlier this month, 23 hospitals filed suit against HHS in U.S. District Court in Los Angeles. They charge that current policy is illegal because HHS didn't follow procedure when it decided government programs shouldn't cover investigational devices.
Meanwhile, a coalition of providers and manufacturers says it's close to finding a sponsor for legislation that would change government policy. And last week, the Health Industry Manufacturers Association, which represents more than 700 companies, fired off a report arguing the policy might chill innovation.
Generally, Medicare and Medicaid don't pay for care involved in using a device not yet approved for marketing by the Food and Drug Administration. The programs can deny coverage for part or all of a hospital admission if an investigational device was used.
Hospitals charge that until recently, intermediaries ignored the policy. They've been lobbying for coverage of devices undergoing FDA-approved clinical trials.
Their campaign began last summer when HHS investigators subpoenaed records from 132 hospitals to see if government programs were fraudulently billed for investigational devices. The investigation is ongoing. Several hospitals have since stopped enrolling Medicare and Medicaid patients in clinical trials (Feb. 20, p. 34).
Because government policy hasn't changed, 23 hospitals sued to force a public evaluation of it, said their attorney, Leonard Homer of Ober, Kaler, Grimes & Shriver in Baltimore. The plaintiffs include Cedars-Sinai Medical Center in Los Angeles, Johns Hopkins Hospital in Baltimore, Mount Sinai Hospital in New York and other prestigious research centers.
Medicare and Medicaid policy regarding investigational devices was spelled out in 1986 in instruction manuals to intermediaries, carriers and providers. However, it never passed through a formal rule-making process, Homer said. That year, under a court settlement with Medicare beneficiaries, HHS agreed to publish its procedures for determining coverage of new technology. It published two notices of its proposals but never responded to public comments or published final regulations.