The initial introduction of PDT provides an example of the mismatch that may occur among numerous reviews that have different purposes, including FDA approval, CMS coverage policy, evidence of treatment benefit in the peer-reviewed literature, preferred practice patterns, and actual practice. Is PDT with verteporfin a unique example of a new treatment for which clinical indication can or should be limited to populations that can be clearly defined? Is its potential misapplication rate unique? Probably not; other medical treatments or devices may be analogous (ie, in which evidence exists for a treatment benefit, but the benefit is limited to patients with specific criteria whose recognition requires expertise in test or image interpretation), such as biventricular pacemakers, new pharmacologic agents for the treatment of sepsis, and thromboses. Congress has given the CMS authority to set coverage policy, to police fraud, and to perform limited nonsystematic reviews of treatments after they have been provided. There is a huge, untapped potential to improve the cost-effectiveness of existing and future coverage policies, particularly for new technologies and treatments as they are introduced. For historical and political reasons, the CMS does not overtly consider cost-effectiveness in its coverage policy. It seeks to follow the directive of Congress to cover what is “reasonable and necessary,” but it has not established written rules regarding this directive because of the efforts of interest groups.20 The desire to cover only effective treatments is self-evident. On the other hand, Medicare has tried to control escalating health care costs by simple reduction of payment to health care professionals, hospitals, and other medical facilities. In the current environment of escalating health care costs, the uncoupling of effectiveness and cost containment is neither sensible nor sustainable. These problems and the opportunities they bring are not unique to the CMS. All payers of health care are faced with the challenge of developing policies regarding which treatments to cover and, with the paucity of effective strategies, matching and limiting effective treatments to those likely to benefit. Physicians as a group also do not benefit from the overuse of expensive drugs. The total cost of each verteporfin injection to Medicare in 2002 was approximately $1400. Drug companies and device manufacturers are paid for their products regardless of whether the CMS or its contractors determine that the treatment meets payment guidelines. The expense of drugs and devices exerts downward pressure on the conversion factor used by the CMS to set its annual payment to physicians for a particular service.