Medicare payment for new technologies. Can the process be improved despite conflicting goals? An ECRI technology management assessment.

Decisions about Medicare payment for new technologies are made by a multiagency process that became even more complex with the advent of DRG-based payments for inpatient care. Numerous problems with this decision-making process are widely acknowledged to exist but difficult to solve because of inherent conflicting goals. This report proposes consideration of basic improvements to the process, including: increased support for clinical and cost studies, particularly from manufacturers of new technologies; approval of provisional payments to providers who agree to collect effectiveness and cost data; additional research into technology assessment methods; clarification of decision-making criteria; opening of the coverage-decision process to greater public scrutiny; according more weight to recommendations of the Prospective Payment Assessment Commission; submission of additional data to the Food and Drug Administration; and increasing the flow of information among Medicare coverage-decision agencies and other third-party payers. Many of these modifications can be accomplished without congressional action, if the interested parties are willing to work together to improve the coverage-decision process.