There’s serious momentum in Congress to finally deal with middlemen in our healthcare system. The year-end spending bill includes reforming how Pharmacy Benefit Managers (PBMs) impact drug pricing, and at a recent press conference, President-elect Donald Trump said, “We’re going to knock out the middlemen.”
With the attention on how middlemen increase costs and impact healthcare coverage, the incoming administration should take the opportunity to address another middleman – Medicare Administrative Contractors.
Known as MACs, these middlemen are private, multi-state healthcare insurers contracted by the Centers for Medicare and Medicaid Services (CMS) that serve as an intermediary between healthcare providers and Medicare Beneficiaries. While they are a relatively unknown aspect of Medicare, MACs hold the power to deny testing coverage for America’s seniors.
There are seven MACs that have jurisdiction over the entire United States: Noridian Healthcare Solutions, Novitas Solutions, First Coast Service Operations, CGS Administrators, Wisconsin Physicians Service Government Health Administrators, National Government Services, and Palmetto GBA. Apart from one, all these companies are subsidiaries of or owned by the better known Blue Cross Blue Shield system.
Every day, just over 5,400 people in the United States are diagnosed with cancer. For those on Medicare, MACs are currently a barrier to essential diagnostic testing for cancer patients that would help with early intervention and less invasive treatments. In 2003, the Bush administration undertook an overhaul of the country’s Medicare system, introducing the structure America knows today. In 2016, the 21st Century Cures Act (the Cures Act) provided additional clarification and guidance on Medicare systems and operations, including new guidelines for coverage determinations.
The Cures Act provides MACs two options when establishing the necessity for a test. The first includes performing an informal review of evidence and research, then informing the laboratory that the test meets the definition and will be covered by Medicare and Medicaid. The second is a more formalized process including the issuance of a local coverage determination (LCD). An LCD includes a review of all evidence and research, a public comment period, and a final determination.
However, a lack of oversight has allowed MACs to essentially abandon this guidance. Recently, MACs have demonstrated their incredible sway over the process while threatening access to care, leaving vulnerable Medicare beneficiaries in the rear view.
In 2022, Novitas proposed an LCD titled “Genetic Testing for Oncology”, which would end Medicare coverage of 13 cancer diagnostic tests for Medicare recipients across the country. The LCD process was further muddled by the exclusion of relevant studies from consideration, inconsistent standards for evidence, and a misunderstanding of standards of care for cancer patients. At present, the LCD covers issues not included in the original proposal and covers tests manufactured in laboratories outside their regional jurisdiction.
This is not the first time an issue with LCDs from MACs has occurred. In 2023, organ transplant recipients were put at risk after Palmetto GBA, which holds jurisdiction over the Southeastern U.S., limited coverage for crucial blood tests that monitor to see if the patient’s body is rejecting the new organ.
Access to the tests provided relief for patients who may instead have had to receive intrusive biopsies to track potential rejection. Palmetto took away that relief overnight and with little warning. The new policy determined that these blood monitoring tests could no longer be used as a part of routine monitoring care for most patients.
Thankfully, Congress quickly took action, and sent a bipartisan letter to the CMS Administrator Chiquita Brooks-LaSure, expressing their concerns, asking for the restoration of coverage, and noting the implications for poor communities who had “less access to specialized transplant centers,” which they claimed made “non-invasive diagnostic tests even more critical for their ongoing prost transplant care.” CMS eventually stepped in, ensuring the restoration of coverage, and stopping the progress of Palmetto’s LCD.
Unfortunately, it seems like Congress will have to step in again to ensure that America’s seniors can access to innovative, cutting-edge healthcare options. Like PBMs, MACs are a symptom of consolidation in the healthcare industry. Blue Cross Blue Shield has a financial incentive to deny coverage, and their subsidiary middlemen are standing in the way of testing for patients with bladder, thyroid, and skin cancer.
Middlemen of all types in healthcare must quickly be “knocked out.” President-elect Trump and the incoming administration can continue the momentum on PBM reform and root out the middlemen that are parasites on our nation’s healthcare system. In the new year, new leadership at CMS should ensure the MACs don’t make another disastrous coverage decision at the expense of cancer patients.
At the same time, Congress should take up Medicare reform and root out the middlemen who are standing in the way of critical cancer diagnostic testing for America’s senior citizens.
Jerry Rogers is editor at RealClearPolicy and RealClearHealth. He hosts 'The Jerry Rogers Show' on WBAL NewsRadio 1090/FM 101.5 and the Federal Newswire's ‘The Business of America’.
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