CMS codifies definition of ‘reasonable and necessary’ Medicare coverage

The Centers for Medicare & Medicaid Services yesterday finalized its proposal to codify how it defines “reasonable and necessary” coverage for items and services furnished under Medicare Parts A and B.

For national and local coverage determinations that have “insufficient evidence to meet the appropriateness criteria,” CMS will consider coverage to the extent the items or services are covered by a majority of commercial insurers.

In comments submitted in November, AHA warned against replacing the appropriateness criteria entirely with a consideration of commercial market coverage, noting that such an approach could reduce coverage in the Medicare program and transparency in coverage determinations. Under the final rule, CMS opted not to replace the appropriateness criteria entirely and will issue draft sub-regulatory guidance on the methodology for determining when and how commercial coverage will be determined relevant.

The final rule, which takes effect March 15, also establishes a Medicare coverage pathway for innovative medical devices designated as breakthrough by the Food and Drug Administration. According to CMS, the Medicare Coverage of Innovative Technology pathway will result in four years of national Medicare coverage starting on the date of FDA market authorization or a date within two years of authorization that the manufacturer chooses.