Medicare Rule for Breakthrough Devices Returns

The Centers for Medicare and Medicaid Services has resubmitted the rule for Medicare coverage of FDA breakthrough devices with a modified plan for the application and for the process of developing evidence for the device. Sponsors should be aware that they must apply for acceptance into this program approximately 12 months before the FDA will clear or approve the device application.

The Transitional Coverage for Emerging Technologies (TCET) pathway is for medical devices that achieve breakthrough device status at the FDA, although the TCET program is not open to in vitro diagnostics. CMS said this new approach leverages the current national coverage determination (NCD) process and the coverage with evidence development (CED) mechanism, the combination of which will provide Medicare beneficiaries with more timely and predictable access to new medical technologies. This will be achieved while maintaining robust safeguards for the Medicare population, CMS stated.

There is legislation in the House of Representatives which would create a conditional Medicare coverage pathway upon FDA approval of the device and end after four years. The legislation also provides additional payment amounts under new technology programs in the hospital inpatient and outpatient prospective payment systems compared to the normal amounts for that device. Additionally, CMS administrators would be required to publish unique Medicare payment codes for the device within three months of the FDA approval of the device.

Sponsors may self-nominate their devices for the TCET pathway, which will be followed by a meeting with CMS officials. The agency will review the evidence for the device prior to FDA approval and inform the sponsor as to whether the product is appropriate for the TCET program. The program includes a requirement for an evidence development plan to address any gaps in the existing data for the device, but the EDP is not limited to randomized, controlled clinical trials. The studies and other data sources will be fit for this purpose and can include real-world data sources.

Among the criteria for admission into the TCET program are that the device fall within an existing Medicare benefit category and that the device not fall within an existing Medicare NCD. The device cannot be otherwise excluded from the Medicare program due to law or regulation. While diagnostic lab tests are within the definition of a medical device, CMS said it has traditionally delegated the task of reviewing these tests to administrative contractors. This should continue to be the mechanism for the majority of such tests, even those granted breakthrough status by the FDA.

The objective is to issue an NCD under this program within six months of the FDA marketing authorization, and this transitional coverage period may extend to five years. This would consist of four years of coverage during the process of evidence generation and one additional year while CMS considers the evidence. At that stage, CMS will reopen the NCD and propose one of four possible outcomes. One option is non-coverage while a second option would be an NCD with a continued evidence development requirement. The agency may also declare full coverage without evidence generation requirements while the fourth possibility is a withdrawal of the NCD and delegation to administrative contractors for coverage. An NCD pilot program will be established as well. The public will have 60 days, or until Aug. 26, to comment on the draft rule, including on the question of whether similar device that are subsequently approved by the FDA should be addressed under a separate NCD.

Scott Whitaker, President and CEO of the Advanced Medical Technology Association (AdvaMed) said in a June 23 press release, “we are pleased that CMS has finally issued the TCET notice.” He said the draft requires further review by the AdvaMed policy group and that the association is reassured that CMS recognizes the need for an improved coverage process. Whitaker also stated that AdvaMed member companies “continue to believe that immediate coverage of FDA approved technologies represents the best path forward.”