Knowledge Base Article

In September 2020, CMS released the proposed rule Medicare Coverage of Innovative Technology (MCIT) and Definition of Reasonable and Necessary Proposed Rule (CMS-3372-P). Per a related CMS Press Release, “Under current rules, FDA approval of a device is followed by an often lengthy and costly process for Medicare coverage. The lag time between the two has been called the “valley of death” for innovative products, with innovators spending time and resources on FDA approval, only to be forced to spend additional time and money on the Medicare coverage process.” Further, U.S. Department of Health and Human Services (HHS) Secretary Alex Azar, stated that “this new proposal would give Medicare beneficiaries faster access to the latest lifesaving technologies and provider more support for breakthrough innovations by finally delivering Medicare reimbursement at the same time as FDA approval.”

CMS issued Final Rule (CMS-3372-F) on January 12th which was published in the Federal Register on January 14, 2021. This Final Rule will take effective on March 15, 2021. CMS notes in a related Press Release that “after the final rule takes effect, upon manufacturer request, Medicare may cover through MCIT eligible breakthrough devices the FDA has approved, including breakthrough devices that received FDA marketing authorization approval within two calendar years prior to the final rule’s effective date, giving Medicare beneficiaries access to these innovative and potentially life-saving devices.”

Current Medicare Coverage Pathways

The MCIT pathway was proposed because the prescribed statutory timeframes for the National Coverage Determination (NCD) process limits CMS’ ability to institute immediate national coverage policies for new, innovative medical devices. NCDs and Local Coverage Determinations (LCDs) take, on average, 9 to 12 months to finalize.

CMS detailed current Medicare coverage pathways in the proposed rule. Each pathway is highlighted in the following table. 

FDA Breakthrough Devices Program

The Breakthrough Devices Program is specifically for medical devices and device-led combination products meeting the following two criteria:

• The device provides more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions.
• The device must satisfy one of the following elements:
• It represents a breakthrough technology;
• No approved or cleared alternatives exist; or
• It offers significant advantages over existing approved or cleared alternatives.

MCIT Coverage Pathway

CMS will coordinate with FDA and manufacturers as medical devices move through the FDA regulatory processes to ensure seamless Medicare coverage. This simultaneous effort will ensure Medicare coverage on the date of FDA market authorization for all devices that fall within a Medicare benefit category.

Unlike the pathways in the above table, the MCIT Pathway will allow for immediate national coverage upon the date of FDA market authorization (that is the date the medical device received Premarket Approval (PMA); 510K clearance; or the granting of a De Novo classification request) for the breakthrough device.

Medical Device Eligibility

The MCIT Coverage Pathway is available only to medical devices that meet all of the following:

• A device is an FDA-designated breakthrough device,
• A device that was FDA market authorized two years prior to the effective date of the final rule (March 15, 2021) and thereafter,
• A device is used according to their FDA approved or cleared indication for use,
• A device that falls within a Medicare benefit category,
• A device that is not the subject of a Medicare national coverage determination, and
• A device that is not otherwise excluded from coverage through law or regulation.

Coverage Period

The pathway is a voluntary, opt-in model and will begin when a manufacturer notifies CMS of its intention to utilize the MCIT pathway. CMS finalized that manufacturers may opt-in using no more than an email from the manufacturer to CMS indicating a desire to opt-in and the requested start date of MCIT coverage.

A manufacturer’s requested start date must be no early than the date a device receives market authorization and no later than 2 years after the date of market authorization.

In the proposed rule, CMS indicated that they anticipate two MCIT pathway participants in the first year based on the number of medical devices that received FY 2020 NTAP and were non-covered in at least one MAC jurisdiction by LCDs and related articles.

MCIT Pathway End Date

MCIT coverage will expire four years after the date of FDA approval, irrespective of when the manufacturer requested activation of their MCIT coverage, at which point, the manufacturer may request CMS to undertake an NCD for the breakthrough device.

Reasons that the MCIT Pathway may End Prior to 4 years

• The manufacturer withdraws the breakthrough device from the MCIT pathway,
• The device becomes subject to an NCD,
• The device becomes non-covered through law, regulation, or at the discretion of the Secretary subsequent to an FDA medical device safety communication or warning letter, or
• The FDA removes authorization of a device.

When an MCIT Coverage Pathway Ends, What Next?

At the end of the 4-year MCIT pathway, coverage of a device would be subject to one of the following three possible outcomes:

• NCD affirmative coverage, which may include facility or patient criteria;
• NCD non-coverage; or
• MAC discretion (claim-by-claim adjudication or NCD).

CMS encourages interested manufacturers to submit an NCD request during the third year of MCIT to allow time for NCD development.

Definition of “Reasonable and Necessary” Codified

In addition to the MCIT Pathway, CMS proposed and has finalized their intent to “codify in regulations the Program Integrity Manual definition of ‘‘reasonable and necessary’’ with modifications, including to add a reference to Medicare patients and a reference to commercial health insurer coverage policies.”

Reasonable and Necessary Definition

An item or service would be considered ‘‘reasonable and necessary’’ if it is— (i) safe and effective; (ii) not experimental or investigational; and (iii) appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it meets all of the following criteria:

(A) Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment of the patient’s condition or to improve the function of a malformed body member;

(B) Furnished in a setting appropriate to the patient’s medical needs and condition;

(C) Ordered and furnished by qualified personnel;

(D) Meets, but does not exceed, the patient’s medical needs; and

(E) Is at least as beneficial as an existing and available medically appropriate alternative.

(F) “Not later than March 15, 2022, CMS will issue guidance on the methodology of which commercial insurers are relevant based on the measurement of majority of covered lives. For national and local coverage determinations, which have insufficient evidence to meet paragraphs (b)(3)(i) through (v) of this section, CMS will consider coverage to the extent the items or services are covered by a majority of commercial insurers. As part of CMS’ consideration, CMS will include in the national or local coverage determination its reasoning for its decision if coverage is different than the majority of commercial insurers.”

CMS intends to list MCIT pathway covered devices on the CMS website to ensure all stakeholders will be aware of what is covered through this pathway.

Resources

CMS Press Release: CMS Unleashes Innovation to Ensure our Nation’s Seniors have Access to the Latest Advancements

 https://www.cms.gov/newsroom/press-releases/cms-unleashes-innovation-ensure-our-nations-seniors-have-access-latest-advancements

CMS Fact Sheet: Medicare Coverage of Innovative Technology (CMS-3372-F)

https://www.cms.gov/newsroom/fact-sheets/medicare-coverage-innovative-technology-cms-3372-f

Final Rule (CMS-3372-F)

https://www.govinfo.gov/content/pkg/FR-2021-01-14/pdf/2021-00707.pdf

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