Last fall, CMS proposed a special coverage rule that would provide automatic, four-year coverage for Breakthrough Devices after FDA approval or clearance. On January 12, 2021, after market close, CMS released a fact sheet and the final rule, largely as proposed. It's called Medicare Coverage for Innovative Technologies - MCIT. The rule also includes a section where they codify in regulation some generic, longstanding Medicare policies about defining "reasonable and necessary," e.g. "meets the patient's need" and "provided by appropriate personnel."
- See CMS Fact Sheet here.
- See CMS final rule press release, here.
- See the final rule text here. (76pp)
- The full Federal Register typeset publication appeared on January 14, 2021 (86FR2987, 24pp).
- Coverage at MedCity News here. At MedTech Dive here.
- Within a week, January 18, a company with a breakthrough device review underway raised $100M (Paige.AI), here. Coverage of MCIT at Forbes, here.
Some facts to know -
Diagnostics are in.
CMS continued to be a little confusing about diagnostics, but they're eligible. CMS notes in discussion that it had asked the public whether coverage should apply only to "breakthrough devices" or whether they should "also include diagnostics and drugs." (Diagnostics are DEFINITELY devices for the FDA, and many have had breakthrough status already). After repeating that view, CMS states clearly on page 38 of the early release version that any medical device so classified by FDA and reviewed as breakthrough, is covered under MCIT, "including in vitro diagnostics." Whew.
Preventive devices are out.
Devices are only covered under MCIT automated coverage if they are otherwise eligible for coverage. For example, eyeglass and dental devices wouldn't be covered even if they were MCIT, because they are excluded by statute. Regular Medicare-covered devices are "reasonable and necessary to treat illness," not primarily "preventive." It's not clear many preventive devices would be breakthrough status anyway, since BT status includes being intended to treat or diagnose a serious or fatal illness.
Normal Payment Rules Apply.
Normal payment rules apply, so if a product is bundled in a fixed price under a certain setting, the MCIT rule won't have any effect.
Normal illogical fee schedules and cumbersome coding delays also apply. CMS makes several remarks that MCIT is only one of their many initiatives to reduce burdens and delays. Note, too, that CMS opened an office for Technology Payment Policy last November (here).
You Have to Apply
If you went through FDA breakthrough review status, you have to apply for the CMS coverage. Details will follow. CMS writes, "Manufacturers simply need to notify CMS of their interest in MCIT for their breakthrough device via an email box and specify the desired start date for coverage. CMS will coordinate with FDA and the manufacturer to ensure a smooth start to coverage once the breakthrough device is FDA market authorized." The covered devices under MCIT will have their own CMS webpage. It looks like your start date can be delayed if you can't ramp up and commercialize as fast as your FDA approval.
Commercial Payers - attention will be paid.
One notable rule was reference to "commercial payers" as a major determinant of coverage, outside the breakthrough device part of the policy. CMS is not using this as a hard-and-fast criteria, but rather includes text that between now and 2022, CMS will develop a process through which it might cover something covered by commercial insurers if it does not meet particular Medicare rules provided in the regulation.
It seems to me that few things covered by most commercial insurers would literally fail to meet Medicare's pretty bland and generic rules (such as "furnished by qualified personnel" and "meets patient's medical need.") CMS is likely to include a discussion of commercial insurers' positions as part of NCDs and LCDs at some future point, for example.
Implementing Coverage for "Indication for Use."
The Breakthrough coverage is based on "indication for use." I submitted a comment that sometimes FDA itself vacillates in its approval documents for a device between "intended use" and "indication for sue," but CMS left the final text pointing only to "indication for use."
Like USPSTF recommendations, FDA "indications for use" aren't always easy to translate into coverage rules (e.g. an MRI scanner might be approved to "image the human body" which isn't a medical necessity scenario for coverage.) So we'll see how the policymaking over interpreting "indication" text in the labeling plays out.
Two Year Lookback
CMS offers 4 years of coverage from the time of FDA approval, but will implement MCIT on a rolling basis if devices still have half the time (2 years) left to run. So 2019, 2020 Breakthrough approvals can apply for coverage. As CMS states, "Breakthrough devices market authorized within 2 years prior to the date the final MCIT rule became effective will be eligible for coverage."
Volume of Cases? 2 to 4? Really?
CMS estimates that each MCIT application will require 15 minutes, that there will be 2 the first year, and 3, 4, 5 submitters in each subsequent year (after which applications will "level off.")
In part, this depends on CMS being aware of only several BT products so far. See, however, an article in Nature Biotechnology by Johnston et al. (38:933, here), finding there have been 222 products in the BT pathway by January 2020, and the number was rising rapidly.
In addition, multiple products can enter the BT pathway because there is no approved product (say, 4); and after one of those 4 is approved, the other three remain in the BT pathway. (4 products might eventually be approved because they entered at timepoints when no product of the type was yet approved).
Cocktail Party Question: How Far Back Does This Idea Go?
The idea of giving special coverage status to BT devices goes back at least to 2016; see my history article here (original from August 2019 and survey back to 2016).
CMS Acknowledges BT Devices Might Fail LCDs, Without This Regulation
In the regulatory cost section, at the end of the rulemaking, CMS notes it is aware of at least 2 recent medical devices that were rated substantial advances for new technology add on payments by CMS leadership, but failed to get LCD coverage (that is, had explicit LCD non coverage). This can't happen again, for BT devices at least, under the rule.
Other Notes
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Original version was also posted to Linked In here.
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FDA Home Page
See the FDA homepage for the Breakthrough Device program here. It's a review program - products are admitted in this "review pathway" because they are likely to meet breakthrough criteria and have promising features. It's not based on the final results of clinical trials and final review.
Device is expected to provide more effective treatment, or diagnosis, for a life threatening or irreversible condition. The device must meet ONE of the following; (1) breakthrough technology per se, (2) no approved alternatives [LDTs don't count against this, they're not "approved"), (3) significant advantages over approved alternatives, (4) availability is "in the best interest of patients."
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MCIT & Opposition
The approved policy for MCIT overcomes objections of some academics that CMS should conduct its own review and not be handcuffed to accepted a prior FDA decision - Neumann & Chambers, here.
AHIP, the insurance plan group, had opposition to the MCIT proposal (comment here.) AAMC had concerns that some products might be arbitrarily excluded because of differing interpretations of the amount of Medicare-age patient data (here).
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Financial Spin
While the market (DJIA) was unchanged on the next day, Renalytix and Exact Sciences were both up about 4%. Here. Press release from Renalytix praising CMS for the ruling, here. For Exact, with a market cap around $25B, a 4% boost is worth about $1B.
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Wording of Device Indications
I mentioned that device indications are sometimes pretty open-ended at FDA.
For example, the Lilly Alzheimer PET scan (Amyvid) is indicated "to estimate beta-amyloid density in adult patients who have cognitive impairment who are being evaluated for causes of cognitive decline." Which patients? When? Everybody? Always?
Siemens PET/CT K113448 has a section, "Indications for Use" that simply defines the product as a PET/CT system (not an "indication") then states "the systems are intended to be used by appropriately trained health care professionals to aid in detecting, localizing, diagnosing, staging, lesions, tumors, disease, and organ function for the evaluation of diseases and disorders such as, but not limited to, cardiovascular and neurological disorders and cancer. The images can also be used to aid radiotherapy planning." Pretty hard to convert that into a LCD for which PET scans are medically necessary and which aren't.
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References to the White House
In the CMS "Fact Sheet," CMS quotes President Trump's October 2019 Executive Order on CMS reform. "[President Trump's Executive Order 13890 focused, in part, on CMS streamlining coverage, coding, and payment for innovative technology, including breakthrough medical devices. This final rule delivers on President Trump’s order by creating an unfettered path to coverage beginning as soon as the same day as FDA market authorization for breakthrough devices."
While the policy highlights Trump's E.O., it avoids language sometimes used previously in press releases and fact sheets, which went to lengths to specially laud his vision and leadership several times while announcing a regulation. "Thanks to President Trump's leadership....Thanks to President Trump's vision for America's seniors..." These latter types of rhetoric are missing today.
The CMS "Press Release" for MCIT has paragraphs of quotes from Seema Verma, but does not mention President
Contrast this to the December press release on prior authorization policy, writing, "Today, under President Trump’s leadership, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would improve the electronic exchange of health care data among payers, providers, and patients."
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