May 15, 2002
The Centers for Medicare & Medicaid Services (CMS) today announced new guidance for Medicare contractors to use to determine whether a particular drug is "not usually self-administered" and therefore may be covered by Medicare. The change is expected to expand drug access for multiple sclerosis patients
The new instructions are expected to moderately expand the drugs available for some beneficiaries - including interferon beta-1a, a drug commonly used by multiple sclerosis patients. Currently, fewer than half of Medicare carriers, private insurance companies that process and pay claims, pay claims for this drug.
"We expect this change to expand Medicare coverage for some injected drugs, including one used to fight multiple sclerosis that has only been covered sporadically in the past," Health and Human Services Secretary Tommy G. Thompson said.
"While this will provide modest relief to some beneficiaries, we continue to call on Congress to enact comprehensive Medicare legislation, including a prescription drug option for all beneficiaries, consistent with President Bush's principles for modernizing Medicare," Thompson said.
CMS today is issuing a program memorandum to Medicare carriers with new criteria to use to determine when a drug is "not usually self-administered." The new criteria will help bring greater consistency to carrier decisions and on balance will result in a modest expansion of coverage for Medicare beneficiaries. Carriers will use this guidance to make coverage decisions about individual drugs.
"Medicare coverage policy has been inconsistent and confusing for patients, physicians and health care providers," said CMS Administrator Tom Scully. "Today's program memorandum will bring more consistent coverage policy for outpatient drugs across the country. It is not only good for MS patients, but good for the program, to have clearer, fairer and more consistent coverage guidance."
By law, Medicare covers certain outpatient drugs that cannot be self-administered and are furnished "incident to" a physician's service. Generally, these drugs are administered in a hospital or doctors' office.
Medicare contractors historically had adopted varying interpretations of the self-administered standard. In December 2000, Congress amended the law to cover drugs not "usually self-administered by the patient," a change intended as a modest expansion of Medicare coverage.
The program memorandum clarifies for carriers how the new standard should be implemented. It includes criteria that should, in the absence of evidence to the contrary, be used by Medicare contractors in determining whether a drug is "usually" self-administered, and therefore ineligible for payment under Medicare. If the contractor determines a drug is not usually self-administered, it should be covered.
The program memorandum will be posted on the CMS web site. To give contractors, health care providers, and beneficiaries time to adjust to any coverage changes, the program memorandum has an effective date of August 1, 2002.
CMS also will initiate a rule-making process to provide an opportunity for public comment on these policies. Comments will be specifically invited on the criteria to determine whether a drug is "not usually self-administered." Until the rulemaking process is completed, contractors will follow the process outlined in the program memorandum.
This two-step approach will permit quick implementation of the program memorandum while a regulation is developed. Both the program memorandum and the regulation will provide nationally uniform criteria for determining whether a drug qualifies for payment, while still allowing some local flexibility to account for regional differences in practice patterns or special circumstances.