Industry News

CMS pitches coverage of breakthrough devices in tandem with FDA authorization


Dive Brief:

  • CMS on Monday unveiled a proposed rule outlining a plan to cover FDA-designated breakthrough devices for up to four years from the date they receive U.S. marketing authorization.
  • The proposed voluntary Medicare Coverage of Innovative Technologies pathway has been under review since March of last year. If finalized in its current form, the new pathway may end up costing the government as much as $291.5 million in its first year, CMS estimates.
  • The proposal follows a push by the medical device industry for faster Medicare reimbursement for emerging technologies. AdvaMed has sought immediate Medicare reimbursement for products awarded a breakthrough device designation when approved for marketing by FDA.

Dive Insight:

The product pool eligible for the pathway, restricted to FDA-designated breakthrough devices that then receive 510(k) clearance, De Novo authorization, or premarket approval, is now quite small. To date, only 16 breakthrough devices — or medical technologies believed to provide more effective treatment or diagnosis of life-threatening or irreversibly debilitating conditions for which no alternative exists on the market — have actually received FDA’s marketing authorization, according to CMS.

The majority of those devices have seen great variability in coverage, due in part to case-by-case discretion by Medicare Administrative Contractors (MACs), hospitals’ bundled payment systems, or instances where a breakthrough device does not fall into an established Medicare benefit category.

CMS noted that the average national or local coverage determination takes nine to 12 months to finalize.

The agency justified the four-year timeframe, calling it roughly the span it takes to complete a study tied to a national coverage determination. CMS encourages, but does not require, additional evidence development during that period. Once the four-year period is up, a technology will be reconsidered under an NCD, a MAC’s discretion, or local coverage determination, the agency outlined.

AdvaMed gave tentative praise to the proposal issued Monday.

“To incentivize innovative medical breakthroughs, the federal government must ensure those breakthrough technologies are covered by Medicare. We are pleased that this proposed rule gets us closer to this goal,” the trade group’s president Scott Whitaker said in a statement.

HHS identified a goal to streamline Medicare coverage of breakthrough technologies in its 2018 fall rulemaking agenda. CMS Administrator Seema Verma expanded on the plan for a policy overhaul in May 2019 in an address before the annual meeting of the Medical Device Manufacturers Association, where she said the agency aimed to get new innovations to beneficiaries concurrent with FDA authorization.

Ahead of announcing the new proposed rule, CMS said it was taking regulatory action to address the “increasing need for a swift coverage mechanism” for beneficiaries to gain access to new technologies. The MCIT coverage pathway would probably add costs to the Medicare program in the short term as beneficiaries use pricier new technologies, CMS said, but could mitigate chronic health issues and therefore reduce some costs for Medicare down the line.

CMS will accept comments on the proposal for the next two months.

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