Proposed Medicare Coverage of Innovative Technology (CMS-3372-P)
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 proposing a new Medicare coverage pathway, Medicare Coverage of Innovative Technology (MCIT), for FDA-designated breakthrough medical devices. The MCIT proposal would provide national Medicare coverage on 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 would 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 proposed rule, we are proposing to codify 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 proposed definition would 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 proposed rule delivers on President Trump’s order by creating an unfettered path to coverage beginning on the same day as FDA market authorization for breakthrough devices. 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 4 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 would allow clinical studies with Medicare patients to be completed while providing broad immediate access and fostering innovation. When MCIT coverage sunsets, manufacturers would 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 and will not have any effect on existing NCDs, LCDs, or other coverage decisions.
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 proposing MCIT to create a more efficient coverage pathway for breakthrough devices.
Generally, the MCIT pathway would 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 4 years from 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.)
Breakthrough devices market authorized within 2 years prior to the date the final MCIT rule is effective would be eligible for coverage. That coverage would not exceed 4 years from the date of market authorization. Claims would not be retroactively payable prior to the effective date of the rule.
The proposed MCIT pathway would 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 would simply need to notify CMS of their interest in MCIT for their breakthrough device via an email box, and CMS would 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 would 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 may submit a request with sufficient time for the coverage process to occur prior to the sunset of MCIT.
While this proposal does not require clinical evidence development by the manufacturer, we believe MCIT would 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 4 years.
Definition of “Reasonable and Necessary”
The proposed definition of “reasonable and necessary” would be codified in regulation. This definition applies more broadly than MCIT, and will be used for NCDs and other coverage decisions. The proposed 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. The proposed definition would allow CMS to review commercial health insurer coverage policies and analyze them for coverage parameters applicable to the Medicare population.
CMS is very interested in stakeholder perspectives on the parameters of the proposed MCIT coverage pathway and proposed definition of “reasonable and necessary”. We specifically invite public comment on the duration of MCIT; what we propose to cover through the policy; and whether coverage should be broadened to include all diagnostics, drugs, and/or biologics. We also specifically invite public comment on the elements of our definition for “reasonable and necessary” and possible alternatives.
For more information, please visit: https://www.cms.gov/newsroom/press-releases/cms-acts-spur-innovation-americas-seniors