Medicare Coverage of Innovative Technology (CMS-3372-F)
On October 3, 2019, President Trump issued the Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors (EO 13890). Based on the EO 13890 and CMS’ continued focus on bringing new and innovative technologies to beneficiaries sooner, we are finalizing a new Medicare coverage pathway, Medicare Coverage of Innovative Technology (MCIT), for FDA-designated breakthrough medical devices. The MCIT rule will provide national Medicare coverage as early as the same day as Food and Drug Administration (FDA) market authorization for breakthrough devices and coverage would last for 4 years. This new coverage pathway will offer beneficiaries nation-wide predictable access to new, breakthrough devices to help improve their health outcomes.
The EO 13890 also called upon CMS to clarify coverage standards and consider market-based policies. In this final rule, we are codifying a definition of “reasonable and necessary” for items and services that may be covered under Part A and Part B of the Medicare program. This definition will apply to all Medicare items and services, not just those covered through the MCIT pathway.
The EO 13890 focused, in part, on CMS streamlining coverage, coding, and payment for innovative technology, including breakthrough medical devices. This final rule delivers on President Trump’s order by creating an unfettered path to coverage beginning as soon as the same day as FDA market authorization for breakthrough devices. Manufacturers will be able to opt-in to MCIT and choose a start date for coverage anytime within two years from the date of FDA market authorization. The breakthrough device designation is only given to devices that meet specific criteria from the 21st Century Cures Act. A breakthrough device must provide for more effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition and must also meet at least one part of a second criterion, such as by being a “breakthrough technology” or offering a treatment option when no other cleared or approved alternatives exist. For beneficiaries impacted by these diseases, MCIT will provide assurance that they will have access to the latest breakthrough medical devices to treat their condition, provided the devices have a Medicare benefit category.
We believe four years of Medicare coverage will encourage manufacturers to voluntarily develop evidence to show these treatments improve the health of Medicare patients. This time period for coverage will allow clinical studies with Medicare patients to be completed while providing broad immediate access and fostering innovation. When MCIT coverage sunsets, manufacturers will have all current coverage options available such as a National Coverage Determination (NCD), one or more Local Coverage Determinations (LCD), and claim by claim decisions.
Codifying a definition of “reasonable and necessary” will bring clarity and consistency to the existing coverage determination processes for items and services under Part A and Part B. This codification of “reasonable and necessary” is similar to the definition currently published in Chapter 13 of the Medicare Program Integrity Manual.
We listened to stakeholders who commented on the proposed rule, so in the final rule CMS will gather more information about utilizing commercial insurer coverage policies and then utilize them under specific circumstances. Under the definition, generally, items and services will have to be safe and effective, not experimental or investigational, and appropriate for Medicare beneficiaries, but if there is insufficient evidence regarding appropriateness for National or Local Coverage Determinations (NCDs or LCDs), we can look to commercial insurer policies to see how they have addressed coverage.
We are aware that there are promising technologies being designated by the FDA for expedited development and priority review through the FDA Breakthrough Devices Program. However, with the current Medicare coverage options, we have had challenges keeping national Medicare coverage on pace with these innovations because of the availability of clinical evidence required to approve technologies through the NCD process. To respond to this challenge, and following the EO 13890, CMS is finalizing MCIT to create a more efficient coverage pathway for breakthrough devices.
Generally, the MCIT pathway will create national Medicare coverage for breakthrough devices, the services necessary to implant and maintain the devices, and any reasonable and necessary treatments due to complications from the devices.
The coverage would last for four years from as early as the date of FDA market authorization. (This can arise after review of a premarket notification (510(k)), De Novo request, or premarket approval application for the device.) Based on public comments on the proposed, in the final rule we created the flexibility for manufactures to choose the start date for coverage. It can be the date of FDA market authorization or any date two years thereafter.
Breakthrough devices market authorized within 2 years prior to the date the final MCIT rule became effective will be eligible for coverage. That coverage will not exceed four years from the date of market authorization. Claims will not be retroactively payable prior to the effective date of the rule.
The MCIT pathway will only be available for FDA-designated breakthrough devices (which includes some diagnostic tests) that have subsequently been market authorized. Device manufacturers must apply to the FDA for breakthrough status, and then FDA reviews the request to determine whether the device meets the breakthrough criteria. Not all devices receive the breakthrough designation.
Breakthrough devices must fit within a statutory Medicare benefit category to be covered. There are breakthrough devices that do not have a Medicare benefit category (e.g., some wearable health devices that are directly purchased by consumers), so not all breakthrough devices can be covered by Medicare due to this statutory requirement. In addition, if CMS has issued an NCD on a particular breakthrough device, that breakthrough device is not eligible for MCIT.
When the FDA market authorizes devices, they authorize the device for specific use(s). For MCIT, the breakthrough device must be used for the FDA approved or cleared indication(s) for use. (This is commonly referred to as the FDA “label” or “indication”.) Uses of breakthrough device for other indications (i.e., uses not described in the approved or cleared indication(s) for use – the “label”) are not coverable through MCIT.
MCIT Operations - What do Device Manufacturers need to do?
If interested in the MCIT pathway, manufacturers simply need to notify CMS of their interest in MCIT for their breakthrough device via an email box and specify the desired start date for coverage. CMS will coordinate with FDA and the manufacturer to ensure a smooth start to coverage once the breakthrough device is FDA market authorized. Manufacturers must still obtain the appropriate code(s) for the device.
Breakthrough Devices Covered through MCIT would be posted on CMS Website
CMS will post a list of breakthrough devices covered through MCIT and the duration of the coverage on the CMS website. This will provide clarity to patients, providers, and claims processors regarding coverage.
Conclusion of MCIT Coverage after 4 Years
When MCIT coverage sunsets, manufacturers would have all the current Medicare coverage pathways available (i.e., NCD, LCD, claim by claim decisions). We strongly encourage manufacturers to communicate with CMS while utilizing MCIT. (This is currently a customary practice among manufacturers interested in national coverage.) At some point prior to the last year of MCIT, manufacturers interested in national coverage through an NCD or local coverage through one or more LCDs can submit a request for coverage which would likely allow for sufficient time for long term coverage to be finalized prior to the sunset of MCIT.
While this final rule does not require clinical evidence development by the manufacturer, we believe MCIT will encourage manufacturers to voluntarily develop clinical studies with Medicare patients to further demonstrate the long-term value of devices in the Medicare population and to continue national coverage after four years.
Definition of “Reasonable and Necessary”
The definition of “reasonable and necessary” will be codified in regulation. This definition applies more broadly than MCIT, and will be used for NCDs and other coverage decisions. The definition has three main elements: an item or service must be (1) safe and effective, (2) not experimental or investigational, and (3) appropriate for the Medicare patients.
For national and local coverage determinations, that have insufficient evidence to meet the appropriateness criteria, CMS will consider coverage to the extent the items or services are covered by a majority of commercial insurers. As part of CMS’ consideration, CMS will include in the national or local coverage determination its reasoning for its decision if coverage is different than the majority of commercial insurers.
Not later than 12 months after the final rule is effective, CMS will issue draft subregulatory guidance on the methodology of which commercial insurers are relevant based on the measurement of majority of covered lives.
Changes from Proposed to Final
Based on public comment, the final rule included a more flexible start date for MCIT coverage. Manufacturers can choose the date MCIT coverage begins to better align with market availability. (This does not preclude local claim-by-claim coverage before the set date.) If the FDA removes approval of a breakthrough device, coverage through MCIT will end. Also, as stakeholders requested, CMS will gather more information about utilizing commercial insurer coverage policies and utilize them under specific circumstances.
For more information, please visit: https://www.cms.gov/newsroom/press-releases/cms-unleashes-innovation-ensure-our-nations-seniors-have-access-latest-advancements