Increasing Revenue

Manufacturers Wait Anxiously for CMS Decision on Automatic Medicare Coverage of MCIT Breakthrough Devices

Makers of innovative medical devices makers will remain on pins and needles after CMS’s decision to once more delay a final rule that would automatically provide initial Medicare coverage for new medical products cleared by the FDA as breakthrough devices under Section 510(k). Finalized during the Trump administration, the rule is a long-term project that was originally slated to go into effect on March 15, 2021. But after having already imposed a 60-day delay, CMS has once more put off the decision date so it can continue to study the issue. All the while, the industry is growing increasingly restless and frustrated.

The Ramifications for Makers of LDTs

There’s a lot on the line for both diagnostics makers and patients. Under the final rule, newly approved breakthrough devices would be deemed to meet the “reasonable and necessary” standard set out in Section 1862((a)(1)(A) of the Social Security Act for purposes of Medicare coverage over a four-year period starting on the date of FDA market authorization. Once the initial period ends, CMS would perform a new “reasonable and necessary” evaluation of the device based on clinical and real-world evidence of improved health outcomes. (For more on the rule, see NLR, May 10, 2021).

Technically, the rule applies only to devices that pass through the Medicare Coverage of Innovative Technology (MCIT) pathway, which doesn’t include laboratory developed tests (LDTs). However, the larger idea of deferring to the FDA and not keep Medicare beneficiaries waiting for innovative medical technology would translate equally well to LDTs. In fact, CMS has sent clear signals that it looks at the MCIT rule as a template that could be extended to breakthrough diagnostics, drugs and/or biologics that aren’t currently in the MCIT pathway, including LDTs.

CMS Refuses to Be Rushed

The MCIT Medicare coverage rule was one of the many eleventh hour rules finalized at the tail end of the previous administration affected by the freeze on new health care regulations imposed by the Biden regime in its first hours of office. Opponents of the rule, including the bipartisan Medicare Payment Advisory Committee (MedPAC) contend that FDA breakthrough device authorization and Medicare “reasonable and necessary” coverage approval is an apples-to-oranges comparison requiring different forms of medical evidence. Forcing CMS to cover new devices just because they get 510(k) certification would strip the agency of its scientific review responsibilities and expose Medicare patients to new technologies of unproven effectiveness and safety, they argue. “The Medicare program, not the FDA, should adjudicate coverage and spending determinations based on the specific needs of the Medicare population,” commented MedPAC in providing public feedback to CMS.

In addition to MedPAC, 96 others submitted public comments during the latest delay period, including Swiss pharmaceutical giant Novartis, which came out in support of the rule, and the National Comprehensive Cancer Network, which opposed it.

Congress Asks CMS to Approve the Rule

With the May 15 deadline approaching, 37 Democratic members of Congress wrote a letter urging acting CMS Liz Richter administrator to “move forward with implementation as soon as possible.” Four of the authors also penned a letter to CMS back in February urging the agency to stick with the original March 15, 2021 implementation. Hoping the new letter will have a more potent impact, they persuaded 33 of their colleagues to join them in signing the latest missive.

Time’s a wasting, the letter stresses. “We remain concerned the delay may unfairly exclude breakthrough devices that would have been included in the original rule, had it been enacted on March 15, 2021.” The letter calls on CMS to allow products that would have been eligible had the rule taken effect on March 15 to remain eligible if and when the rule does become final regardless of the length of delay.

Takeaway

Assurance of Medicare coverage would go a long way toward breaking down barriers to research and development and incentivizing investment in novel diagnostics. Ultimately, that would likely extend beyond MCIT devices to LDTs. Raising the stakes even higher is the potential that the rule would include a “lookback” window covering devices approved within the two-year period before the rule took effect. Echoing the wishes of many in the device industry, the new letter from Congressional members urges CMS to extend the “lookback” window beyond two years to cover all breakthrough devices approved by the FDA so far.

At the end of the day, it seems likely that CMS will ultimately approve some form of Medicare coverage rule for breakthrough devices given the bipartisan support for the initiative. But the question of how extensive the rule will be and when it will take effect remain very much in suspense. 

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