The Centers for Medicare and Medicaid Services issued a proposed rule this week that would give breakthrough medical devices national Medicare coverage on the same day they receive Food and Drug Administration approval.
The rule, called the Medicare Coverage of Innovative Technology (MCIT), would provide Medicare coverage of the devices for four years. During the four-year period, CMS recommends that manufacturers develop additional evidence showing the applicability of their products to Medicare beneficiaries so they can apply for further coverage.
To be eligible, a device must be designated by the FDA as a breakthrough, meaning it must provide more effective treatment or diagnosis of a life-threatening disease or condition, or offer a treatment option when no other approved alternative is on the market, according to CMS.
The MCIT pathway would arise after a device receives 510(k) premarket notification, De Novo request or premarket approval application.
“This new proposal would give Medicare beneficiaries faster access to the latest lifesaving technologies and provide more support for breakthrough innovations by finally delivering Medicare reimbursement at the same time as FDA approval,” said Alex Azar, the Department of Health and Human Services Secretary.
The rule would grant Medicare coverage for FDA-approved breakthrough devices from earlier in 2019 and 2020.
If finalized, the MCIT proposal would also clarify CMS’ definition of “reasonable and necessary,” which is used to determine whether Medicare should cover a product.
CMS is accepting comments on the proposed rule until November 2, 2020.
WHY THIS MATTERS
Under current rules, after a breakthrough technology gets FDA approval, an often lengthy and costly process for Medicare coverage ensues.
That period has been dubbed the “valley of death” because innovators spent time and resources to achieve FDA approval, only to need to spend more time and money to get Medicare coverage.
Medicare beneficiaries are also at a disadvantage under current rules because they are prevented from accessing potentially life-saving technology during the Medicare coverage process.
“For new technologies, CMS coverage approval has been a chicken-and-egg issue,” said CMS Administrator Seema Verma. “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. 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.”
The proposed rule has been commended by the Advanced Medical Technology Association, or AdvaMed, for getting innovative technology to the patients that need them.
THE LARGER TREND
Last October, President Trump signed the Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors, which in part focused on CMS streamlining coverage, coding and payment for innovative technology, including breakthrough medical devices.
This proposed rule follows up on that order by creating a pathway to Medicare coverage the same day as FDA market authorization for breakthrough devices.
Other recent executive orders related to healthcare signed by Trump include one that made telehealth reimbursement permanent and four that have the goal of lowering prescription drug prices for seniors. One of the four would reinstate a previously withdrawn rebate rule and received pushback from some stakeholders that said it will only increase prices for consumers.
ON THE RECORD
“In order to incentivize innovative medical breakthroughs, the federal government must ensure those breakthrough technologies are covered by Medicare,” said Scott Whitaker, AdvaMed president and CEO. “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. We thank HHS Secretary Azar and CMS Administrator Verma for their leadership. The Administration’s continued focus on the value of medical technology and innovative breakthroughs will without question help to alleviate human suffering and save lives.”
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