CMS Rule Aims to Accelerate Medicare Coverage of Breakthrough Tech

CMS has issued a final rule entitled Medicare Coverage of Innovative Technology (MCIT) that aims to accelerate Medicare coverage of technological innovations.

“Government processes have slowed beneficiaries’ access to innovative treatments. Despite being deemed safe and effective by the FDA, Medicare beneficiaries have not had predictable, immediate access to innovative breakthrough devices,” said CMS Administrator Seema Verma.

“In an ever-evolving health care marketplace, CMS remains committed to transforming the health care delivery system through initiatives like MCIT that focus on results, removing government barriers to advancing innovations, fostering competition, and ensuring quicker access to the most advanced therapies for Medicare beneficiaries while providing them with better value and outcomes.”

The CMS press release argued that the current process hinders innovative technologies from getting to Medicare beneficiaries. Innovators have to receive approval from the Food and Drug Administration (FDA) and then receive approval for Medicare coverage, which costs them both time and funds.

To cut down the lag time between FDA approval and Medicare coverage approval, CMS has created a “breakthrough” timeline for innovative products. The FDA can use this timeline to expedite particularly creative and potentially life-saving solutions.

Along with the expedited pathway to FDA approval, Medicare may automatically cover FDA-approved products for up to four years. After four years or the given timeframe for coverage, CMS can reassess whether it will continue covering the device based on patient outcomes.

“This four-year timeline may incentivize the manufacturers of these breakthrough devices to develop additional evidence regarding the applicability of their products to the Medicare population, so they might continue Medicare coverage beyond the initial four years,” the press release stated.

The MCIT final rule aligns with the local coverage determination process. Local administrative contractors decide whether to cover non-national items. Thus, by providing national coverage, CMS seeks to eliminate the possibility that a product may receive Medicare coverage in one region of the country but not in another region.

Making coverage of breakthrough products national also prevents innovators from having to approach individual Medicare administrative contractors for local coverage determinations, CMS added.

The rule is retroactive up to two years before the effective date.

“The MCIT final rule will clarify the standard CMS uses to determine whether Medicare should cover items and services, like devices and surgical procedures,” CMS explained. “Under the Medicare law, with relatively few exceptions, the program can only cover items or services that are ‘reasonable and necessary’ for the diagnosis or treatment of illness or injury or improve the functioning of a malformed body member.”

CMS has promised to clarify the phrase “reasonable and necessary."

The rule is related to the Unleashing Innovation and Patients over Paperwork Initiative. The initiative has been touted by CMS leaders as a solution to reducing administrative burden. Other Patients over Paperwork Initiatives include the final rule that sought to boost biosimilars and generic drugs.