Medicare Coverage for Technological Innovations — Time for New Criteria?

In 2003, Medicare approved coverage for three new procedures: lung-volume–reduction surgery, implantation of cardioverter–defibrillators, and implantation of left ventricular assist devices. The annual cost to Medicare for these treatments could be as high as $11 billion, which is more than 20 percent of the expected annual cost of the Medicare drug benefit. Medicare's current policy is to pay for services that are “reasonable and necessary.” The author argues that explicit criteria should be developed to guide Medicare's decisions about which procedures it will cover.