In September 2021, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would withdraw a Trump-era regulation that created a new pathway that mandates Medicare coverage once a breakthrough medical device is authorized by the United States Food and Drug Administration (FDA). In the proposed rule, CMS noted that the pathway may inadvertently lead Medicare to cover unnecessary products.
Under the pathway, Medicare would cover a breakthrough medical device for four years, starting on the date it receives FDA authorization (or a date chosen by the manufacturer that is within two years of the authorization). However, the insurance industry pushed back hard against the rule out of concerns that it may lead to unsafe medical devices getting to beneficiaries as once the devices were covered, the rule did not require manufacturers to develop additional scientific evidence to support the use of the devices by the Medicare population.
Divergence of FDA and CMS
The proposed rule also noted the agency’s concerns over the availability of clinical evidence of breakthrough medical devices when used on the Medicare patient population and the “benefit or risks of these devices with respect to use in the Medicare population upon receipt of coverage.” CMS notes that just because a product meets the FDA’s standards, the product is not automatically safe or necessary for the Medicare population as “FDA and CMS act under different statutes that have different goals.” Medicare patients tend to have more comorbidities and require higher acuity services, which may have an impact on patient outcomes.
Under federal law, CMS is required to determine whether items and services are “reasonable and necessary,” including the impact a product will have on the Medicare population. FDA, however, sometimes relies on clinical data that doesn’t “necessarily include patients from the Medicare population.”
“Reasonable and Necessary”
CMS is also seeking to repeal the standards for “reasonable and necessary” in Medicare Parts A and B because the new definition “presents implementation and appeals process challenges.” Upon implementation of the prior final rule, the standard would have been updated to consider private insurer coverage of services. However, public comments were concerned about how that may remove flexibilities and impact Medicare’s ability to provide equitable access to care.
Comments Due October 15, 2021
The rule that CMS is attempting to withdraw was one of several that the Biden Administration delayed implementation dates on to allow for further review.
CMS is asking for comment on whether the definition of “reasonable and necessary,” a requirement for Medicare coverage, should be expanded to consider commercial insurance coverage as a factor. CMS is asking whether it should repeal the commercial insurance aspect of the rule and leave the rest unchanged. Comments on the proposed rule are due by October 15, 2021.