Insufficient Evidence: If there's no evidence the service is superior, comparable or inferior, payment would be set on a cost-plus basis for three years, after which CMS would reevaluate. After three years, if evidence remained insufficient or demonstrated no advantage, payment would be lowered.
If that evidence showed the service was actually inferior to prevailing standards of care, "Medicare could reevaluate whether the service was reasonable and necessary." If evidence showed comparability or superiority, payment would go up.
"The majority of services covered under Medicare have historically fallen into this (insufficient) category because the evidence has been insufficient to determine their comparative clinical effectiveness," Pearson and Bach wrote.
In my interview with Bach, he pointed to the variety "of cardiac defibrillators with different price points that have never been compared. There are implants like that as well. And the truth is that cancer drugs come on the market that have never been compared to the cheaper alternatives."
A case in point is expensive intensity-modulated radiation therapy developed in the last decade.
Clinicians presumed it was better than the old way because it focuses radiation just on the tumor cells rather than surrounding tissue. But there have been no randomized trials showing better tumor cell eradication or reduced toxicity, the authors say.
Yet that's not reflected in the price Medicare pays. "For prostate cancer—the most common form of cancer for which this new therapy was used—reimbursement to providers for a single course of treatment was set at approximately $42,000," he and Pearson wrote. With the old way alternative, three-dimensional therapy, Medicare paid only $10,000.
"This discrepancy led providers around the country to buy intensity-modulated radiation therapy machines and to abandon conventional three-dimensional therapy," he and Pearson wrote. That made it difficult to recruit clinicians or patients for clinical trials to compare the two, and the added cost to Medicare's prostate cancer treatment bill topped $1.5 billion.