Medicaid and CHIP Promising Practices

Name of Practice:: Evidence Based Medicaid (WA0601)

Abstract:

The State of Washington uses evidence-based processes to integrate science and peer-reviewed literature into benefit, policy, and medical necessity decision making. Any manufacturer or provider requesting coverage of a drug, device, procedure, or new technology must submit a dossier that critiques articles pertaining to the safety and efficacy of the medical intervention in question. Based on the quality and strength of this evidence, staff from the State Medicaid agency and University of Washington assign letter grades (i.e., A, B, C, or D), which are used to make coverage decisions. This approach enhances the objectivity, consistency, and transparency of the decision-making process and enables the State to make the right service available for the right condition and to present a strongly supported position in fair hearings.

Challenge:

The State was presented with requests for Medicaid coverage of various new procedures and technologies, as well as off-label uses of otherwise approved services. A scientific basis for coverage decisions was necessary to ensure maximum benefit to the patient, as well as to avoid potential medical complications. Prior to the advent of this approach, the State of Washington lacked transparent processes to base medical coverage decisions on objective evidence.

Approach:

Having consulted with a broad group of advocates, legislative staff, agencies, associations, and medical leaders, the State of Washington began using an Evidence Based Medicaid approach internally in January 2002. This approach was codified in Washington State Administrative Code (WAC 388-501-0165), effective December 2005. Adapting processes developed by Winifred Hayes, the State assigns letter grades to health care treatments and services in making coverage decisions.
Dossiers and Technology Assessments: Before the State will consider a request for Medicaid coverage, the requestor must critique all relevant articles pertaining to the safety and efficacy of the medical intervention in question and return the completed documentation (or "dossier") to the State Medicaid agency. The requirement that such a dossier be submitted is modeled on a nationally recognized process for ensuring scientific validity in the ethical conduct of clinical research.
Qualified staff from the State Medicaid agency and the University of Washington evaluates the completeness of the literature, as well as the integrity of the critique submitted, and assign a letter grade to the service or item in question. If there is agreement on the grade, coverage or coverage with limitation may be authorized. If the dossier is incomplete or biased, it is returned with a written explanation.

The A-B-C-D Model: DSHS considers both the quality and strength of evidence in decision making. A hierarchy of evidence will be used to assign letter-grade values to the requested services. The State generally approves services rated "A" or "B". The provider must furnish a justification for any service receiving a grade of "C". Services rated "D" are approved only under extraordinary circumstances

.
A=Approve: A requested service will receive an "A" rating if there is a proven benefit. The proven benefit must be evidenced by strong support in the scientific literature and well-designed clinical trials. Level of Evidence Required=Type I

B=Likely approve: A requested service will receive a "B" rating if there is some proven benefit. This rating indicates that there is moderately good scientific data to support a requested service. Level of Evidence Required=Type II through IV.

C=May disapprove: A requested service will receive a "C" rating if it is investigational or experimental. This rating indicates that the data on this procedure is weak and inconclusive regarding safety and/or efficacy, or that there is only moderately good scientific data to support a requested service. Level of Evidence Required=Type II through IV.

D=Likely disapprove: A requested service will receive a "D" rating if the service is investigational, experimental, ineffective, or unsafe. This rating indicates one of three conclusions: (1) The majority of the medical community does not support use. (2) The use of this service may have been shown to be unsafe or questionable as reported by current scientific literature or regulatory agencies, or by review of current State of Washington outcome data. (3) There is little or no published evidence, or only Type V evidence.
The Hierarchy of Evidence: A rating of A, B, C, or D is determined for a specific technology and diagnosis by reviewing the level of evidence:

Type I - Meta-analysis of multiple, well-designed controlled studies.
Type II - One or more well-designed experimental studies.
Type III - Well-designed, quasi-experimental studies (such as nonrandomized controlled, single group pre-post, cohort, time series, or matched case-controlled studies).
Type IV - Well-designed non-experimental studies (such as comparative/correlation or case studies).
Type V - When no other type of evidence is available, consider treating providers, case reports, clinical examples, expert opinion, an Independent Review Organization/Independent Medical Exam

(IRO/IME) process required under the patient's bill of rights, or professional standards.
By applying the best available clinical evidence and research, the Department of Social and Health Services (DSHS) is able to establish an objective, scientific, transparent basis for medical decisions about the care of individual patients. In so doing, DSHS ensures that the medical necessity definitions and processes utilized are aligned with those of other State agencies responsible for the health care of State employees and injured workers. While the focus of this initiative is on controlling utilization and costs, the practice promotes quality as well. Quality improvement stems from authorizing the right drug, procedure, therapy or device at the right time for the right indication.

Results:

Use of this grading system helps achieve the best outcome by making the right service (i.e., the service that works best) available for the right condition. The A-B-C-D system also enables the State to approve new services and treatments or to allow exceptions to coverage policy where appropriate. Examples include approving coverage of cardiac rehabilitation, brain and nerve stimulation techniques and other new technologies. In addition, the process helps the State set safety limitations for procedures such as office based sterilization, bariatric surgery, the use of Botox in children with Cerebral Palsy, and spasticity. The process assists the State in making difficult decisions to not cover services such as genetic testing in breast cancer, expensive wheel chairs, and other technologies that have limited or no scientific evidence for determining value and safety.

Requiring the individual or entity requesting an expansion of Medicaid coverage to present a critique of pertinent research enables the Governor's office to explain to lobbyists and constituents the basis for an adverse coverage decision.

The evidence based process has been incorporated into the State Medicaid agency's daily utilization management and fair hearing work without additional staff. It has streamlined the State agency operations by reducing the need for consensus meetings and fair hearing preparations. The State notes that the appropriateness of decisions made using the Evidence Based Medicaid approach has been confirmed by its 98 percent success rate in fair hearings and the fact that no denial case has been contested in Superior Court in 2005 and early 2006, all due to better documentation and processes that support agency decisions. Washington State has also incorporated this approach in making coverage and policy decisions with regard to new Current Procedure Terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes. The State of Tennessee has also adopted the Evidence Based Medicaid approach.

The total State cost for this evidence based approach is approximately $50,000 in annual fees to technology assessment venders offering EBM tools on line. These costs are largely offset through better coverage and medical necessity rationales and defense in fair hearings.

The State cost to review each dossier is approximately $3,000. In setting policies to cover, cover with limitations, and not to cover various services and items, the State has realized savings and improved quality of care. In the case of coverage with limitations, the cost per bariatric surgery case has been reduced by half, the utilization trends are down, and no deaths have been recorded in five years. In addition, the State has noted a marked reduction in the use of "off label" Botox and improved access to sterilization services with a predictable quality enhancement. If the State denies coverage, clients are directed to services that cost less and have proven value.

Further Information:

The new approach is in administrative code and can be found at http://apps.leg.wa.gov/WAC/default.aspx?cite=388-501-0165.

Contact: Jeffrey Thompson, M.D., DSHS, (360) 725-1611, thompj@dshs.wa.gov

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