June 10, 2021

Accelerated Reimbursement for “Breakthrough” Devices? CMS Expected to Rule Next Week

Accelerated Reimbursement for “Breakthrough” Devices? CMS Expected to Rule Next Week

Originally published May 4, 2021 (Updated June 10, 2021)—The Medicare Coverage of Innovative Technology (MCIT) final rule would open up device reimbursement nationwide as soon as the same day the product receives market authorization from the Food and Drug Administration (FDA).

The new program was set to take effect on March 15,2021. Then, just 3 days before, the Biden Administration stepped in and pumped the breaks, delaying implementation for 60 days. The delay period is up next week. Yet, the fate of the program is still uncertain.

The MCIT program is intended as a companion to Section 3501 of the 21st Century Cures Act that established the FDA breakthrough device designation, a provision intended to expedite the development and prioritize FDA review of certain innovative medical devices. “Breakthrough” status is designed to provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions, according to a report to Congress issued by former FDA Commissioner Scott Gottlieb.

As manufacturers know all too well, FDA clearance or approval is just the first regulatory hurdle in a successful product launch. Approval can be rendered meaningless without insurance coverage and reimbursement. Manufacturers must separately obtain reimbursement approval from CMS for use of their products under the Medicare program, the nation’s largest health insurer.

The latter approval has proven especially difficult for breakthrough device makers. Even CMS has acknowledged the issue. It’s coverage and reimbursement metrics are largely dictated by Congress. Short of a change in federal law, CMS struggles to keep national Medicare coverage on pace with device innovations.

To squarely address this concern, CMS leveraged the 21st Century Cures Act changes to issue the MCIT proposed rule in August 2020. It would allow breakthrough device makers to elect to participate in a program under which CMS would provide reimbursement for their products as soon as the same day as FDA market authorization.

Under MCIT, Medicare would cover the use of a device that earned breakthrough status for 4 years at a national level, so long as it fits into an existing Medicare benefit category. The 4-year limit imposes an incentive for manufacturers to develop the necessary clinical data to support permanent coverage. Similar to other agency programs, like transitional pass-through payment (TPT), it also allows CMS to gather utilization data and set appropriate permanent payment rates.

On March 12, CMS posted the Interim Final Rule with Comment Period, delaying MCIT implementation by 60 days until May 15. The agency sought additional feedback from the public on several issues, including operational challenges, the volume of devices that have received FDA breakthrough designation to date, and Medicare’s ability to assess the benefits of the technologies for Medicare beneficiaries.

Some argue that concurrent FDA approval and Medicare coverage of breakthrough devices rushes products onto the market that have been insufficiently studied and could cause patient harm. Those with an appreciation of the distinct roles of FDA and CMS disagree.

Device manufacturers must produce substantial analytical and clinical studies to satisfy FDA’s review standards. Cutting the red tape to allow for the reimbursement of innovative devices doesn’t change that. We’ll see if CMS ultimately agrees.

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NOTE: On May 18, 2021, CMS delayed the effective date of the Final Rule until December 15, 2021.

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