CMS Pub. 100-16, ch. 8, § 40.4.1

Cost” Threshold

(Rev. 89; Issued: 11-02-07; Effective/Implementation: 11-02-07)

If CMS determines that an NCD or LCB does not meet the “significant cost” threshold, the

MA organization is required to assume risk for the costs of that service or benefit as of the

effective date stated in the NCD or specified in the legislation.

If the MA organization does not provide or arrange for the service consistent with CMS’

NCD or LCB, enrollees may obtain the services through qualified providers not under

contract to the MA organization.

40.4.2 - Rules for Payment of “Significant Cost” NCDs and LCBs

(Rev. 118; Effective: ICD-10: Upon Implementation of ICD-10, ASC X12: January 1, 2012 (for ASC X12 5010); Implementation: ICD-10: Upon Implementation of ICD-10,

ASC X12: January 1, 2012 (for ASC X12 5010))

Before Adjustments to Annual MA Capitation Rate Are Effective. Before the contract

year when the MA capitation rates have been adjusted to take into account the significant

cost NCD or LCB, the following rules apply to such services.

1. Medicare payment for the service or benefit is:

• In addition to the capitation payment to the MA organization; and

• Made directly by the fee-for-service contractors to the provider furnishing the

service or benefit in accordance with original Medicare payment rules, methods,

and requirements.

2. Costs for NCDs or LCBs for which CMS MACs will not make payment and are the

responsibility of the MA organization are defined in §90.2 of Chapter 4.

3. Costs for NCDs or LCBs for which CMS fee-for-service contractors will make

payment are:

• Costs relating directly to the provision of services related to the NCD or LCB that

were non-covered services prior to issuance of the NCD or LCB; and

• A service that is not included in the MA capitation rate.

After Adjustments to the Annual MA Capitation Rates Are in Effect. When CMS

makes an adjustment to capitation rates, or other payment adjustments, to account for the

cost of the NCD or LCB, the MA organization is required to assume risk for the costs of

that service or benefit as of the effective date of the adjusted capitation rates.

40.4.3 - Special Rules for the September 2000 NCD on Clinical Trials

(Rev. 118; Effective: ICD-10: Upon Implementation of ICD-10, ASC X12: January 1, 2012 (for ASC X12 5010); Implementation: ICD-10: Upon Implementation of ICD-10,

ASC X12: January 1, 2012 (for ASC X12 5010))

CMS will make payments for MA enrollees on a fee-for-service basis for covered clinical

trial costs under the September 2000 NCD. This policy is in effect until further notice. In

CY 2000, CMS determined that the cost of covering these new benefits was not included in

the 2001 MA capitated payment rates, and since this cost met the threshold for "significant

cost" under 42 CFR 422.109(a), Medicare paid for covered clinical trial services outside of

the capitated payment rate. CMS continues the policy of making payments on a fee-for-service basis for covered clinical trial items and services provided MA enrollees until

further notification, because the capitation rates have not been appropriately adjusted to

account for costs of this NCD, as required under §1853(c)(7) of the Social Security Act

(the Act).

Medicare MACs made payments on behalf of MA organizations directly to providers of

covered clinical trial services, on a fee-for-service basis.

Payment for covered clinical trial services furnished to beneficiaries enrolled in Medicare

managed care plans is determined according to the applicable fee-for-service rules, except

that MA enrollees are not responsible for meeting either the Part A or Part B deductible

(i.e., the deductible is waived). The MA enrollees are liable for the coinsurance amounts

applicable to services paid under their plan rules (which may be the Medicare fee-for-service rules).

40.4.4 - Category B Investigational Device Exemption (IDE) Trials

(Rev. 118; Effective: ICD-10: Upon Implementation of ICD-10, ASC X12: January 1, 2012 (for ASC X12 5010); Implementation: ICD-10: Upon Implementation of ICD-10,

ASC X12: January 1, 2012 (for ASC X12 5010))

Medicare Advantage organizations should not confuse clinical trial coverage under the

September 2000 NCD with Medicare's policy on IDE (Investigational Device Exemption)

coverage. Category B IDE trials have been covered, at contractor discretion (within CMS's

rules and guidelines), since November 1, 1995, under 42 CFR 405.201 to 405.215.

Category B IDE costs are included in the Medicare Advantage (MA) payment rates.

Therefore, these claims are not paid on a fee-for-service basis by MACs. The MA

organizations can apply plan rules, including prior authorization rules, when determining

whether to cover an enrollee's participation in a Category B IDE trial.