Medicare and Medicaid would reimburse providers for the use of investigational technology under a bill introduced last month by a bipartisan group of senators.
According to the bill's chief sponsor, Sen. Orrin Hatch (R-Utah), the bill would reverse a 1994 HCFA decision to crack down on Medicare and Medicaid payments for care involving investigational devices.
Generally, Medicare and Medicaid don't pay for devices until they receive marketing approval from the Food and Drug Administration. The programs can deny coverage for part or all of a hospital admission if an investigational device was used.
The Hatch plan would require HCFA to cover investigational devices that replace other devices already approved for marketing by the FDA or that are a replacement for a surgical procedure.
A similar bill has been introduced in the House by Ways and Means health subcommittee Chairman Rep. William Thomas (R-Calif.). He claims the bill would save money over time because many new devices might eliminate some surgical procedures, reduce lengths of hospital stays and improve mortality rates. The Thomas plan has 17 co-sponsors, including eight Democrats.
The issue arose last year when HHS' inspector general began a probe of hospital billing for investigational devices. Until then, HCFA hadn't carried out its policy of denying reimbursement for investigational devices, hospitals say.
Enforcement, according to Hatch, has been "injurious" to the healthcare system. Confused about reimbursement, some hospitals stopped enrolling Medicare and Medicaid patients in clinical trials or halted device research altogether (Feb. 20, p. 34).
The matter also is being debated in the courts. In May, 23 hospitals sued HCFA to force a public review of the original 1986 rule that instructed intermediaries not to cover investigational devices (May 15, p. 26). Hospitals say HCFA never went through the required rulemaking process when it designed the policy. Last month, they asked for a summary judgment declaring the rule illegal. HCFA's response is expected soon.
Among the Senate bill's sponsors is Sen. Bill Frist (R-Tenn.), who, before his election in 1994, was a surgeon at Vanderbilt University in Nashville. Frist said the bill would ensure that Medicare and Medicaid patients receive the same care as private-pay patients.