On August 31, 2020, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that would create a new pathway for certain new medical devices. The new pathway, the Medicare Coverage of Innovative Technology (MCIT), would allow for Medicare coverage for devices designated “breakthrough” devices by the United States Food and Drug Administration (FDA) the same day they are given FDA market authorization.
To be considered a breakthrough device, the device must provide for more effective treatment or diagnosis of either a life-threatening or irreversibly debilitating human disease or condition. A breakthrough device 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.
The qualifying devices would be covered under MCIT for four years, to allow them to build evidence of their value. After those four years, manufacturers would have the option of seeking local coverage determinations (LCD) or a national coverage determination (NCD) for qualifying devices.
MCIT Criteria
Manufacturers of novel technologies would be able to opt in to MCIT by notifying CMS of is intention to use the pathway. Devices participating in FDA’s Breakthrough Device Program would be eligible for MCIT, and any MCIT-participating device must fit within a statutory Medicare benefit category. After notification, CMS would coordinate with FDA and the manufacturer to work out details prior to the start of coverage.
During the four-year MCIT period, breakthrough devices would be covered nationally. However, MACs would continue to make judgements about the reasonableness and necessity of the use of the novel technologies in specific claims. CMS emphasizes that because a device is reasonable and necessary generally “does not mean that it is reasonable and necessary in all circumstances.”
CMS will post a list of breakthrough devices covered through MCIT, and the duration of the MCIT coverage, on its website. CMS anticipates that this transparency will provide clarity to patients, providers, and claims processors regarding coverage.
What Do Manufacturers Need to Do?
If a manufacturer is interested in the MCIT pathway, it would need to notify CMS of their interest in MCIT for their breakthrough device via an email, and CMS then would coordinate with the FDA and the manufacturer to ensure a smooth start to coverage once the breakthrough device is FDA market authorized. Manufacturers are still responsible for obtaining the appropriate code(s) for the device.
The proposed rule would allow Medicare to cover eligible breakthrough devices the FDA has approved for use in 2019 or 2020, giving Medicare beneficiaries immediate access to these potentially life-saving devices.
What Happens After the MCIT Period Expires?
At the end of the four-year initial coverage period, MCIT-covered devices would meet one of three outcomes: (1) an affirmative NCD, (2) a negative NCD, or non-coverage, or (3) MAC discretion through LCDs or claim-by-claim decisions. Manufacturers that are interested in pursuing an NCD would be expected to submit a request for an NCD during the third year of MCIT coverage.
Also, because the MCIT rule would provide national Medicare coverage for four years, it would streamline identical local coverage decisions (LCDs), promoting equal access for seniors and helping innovators focus on getting their devices to patients and clinicians.
New Definition of “Reasonable and Necessary”
In the proposed rule, CMS also proposed a new definition for “reasonable and necessary” as it relates to Part A and Part B coverage of items and services. Under the proposed definition, an item or service would be reasonable and necessary if it meets three main elements. It must be: (1) safe and effective; (2) not experimental or investigational; and (3) appropriate for Medicare patients.
Reactions
“For new technologies, CMS coverage approval has been a chicken and egg issue. Innovators had to prove their technologies were appropriate for seniors, but that was almost impossible since the technology was not yet covered by Medicare and thus not widely used enough to demonstrate their suitability for Medicare beneficiaries,” said CMS Administrator Seema Verma. “These efforts will ensure seniors get access to the latest technologies while lowering costs for innovators. Arcane bureaucratic requirements have no business preventing seniors’ access to a technology that might save their lives.”
“In order to incentivize innovative medical breakthroughs, the federal government must ensure those breakthrough technologies are covered by Medicare,” AdvaMed President and CEO Scott Whitaker said in a press release. “We are pleased that this proposed rule gets us closer to this goal as it would help ensure the patients who need these innovative technologies have access to them.”
Comment Period
CMS is specifically seeking comment on whether MCIT should be open to additional categories, such as diagnostics, drugs, and biologics that are reviewed under expedited approaches, such as Breakthrough Therapy or Priority Review. It also seeks comment as to whether all diagnostics, drugs, and biologics should be MCIT-eligible. In the proposed rule, MCIT addresses only devices, as CMS believes that there is more uncertainty for devices than for other items and services. All comments must be submitted no later than November 2, 2020.