CMS to Repeal Medicare Coverage of Breakthrough Devices Rule

CMS has proposed repealing a Trump-era rule that sought to deliver faster Medicare coverage for medical devices designated as "breakthrough" by the Food and Drug Administration (FDA). The rule also would have implemented new standards for “reasonable and necessary” determinations.

The final rule titled “Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary’” was released in early 2014. The Trump administration intended for the rule to facilitate beneficiary access to innovative devices. The rule was slated to take effect on December 15, 2021, after several implementation delays.

“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,” then-CMS Administrator Seema Verma said in an announcement.

The rule would have established a Medicare coverage pathway to deliver faster access for breakthrough medical devices by providing four years of national Medicare coverage starting on the date the FDA market authorization or a chosen date by the manufacturer that is within two years of the authorization.

Medical devices designated as “breakthrough” by the FDA are thought to be more effective at treating or diagnosing serious diseases or conditions. FDA provides the designation to certain medical devices and device-led combination products to accelerate development, assessment, and review.

On Monday, CMS expressed concerns with the final rule that it felt could not be addressed with more time for implementation.

“We believe that the finalized MCIT/R&N rule is not in the best interest of Medicare beneficiaries because the rule may provide coverage without adequate evidence that the Breakthrough Device would be a reasonable and necessary treatment for the Medicare patients that have the particular disease or condition that the device is intended to treat or diagnose,” the agency stated in the proposed rule.

“[S]ignificant concerns persist about the availability of clinical evidence on Breakthrough Devices when used in the Medicare population as well as the benefit or risks of these devices with respect to use in the Medicare population upon receipt of coverage,” it continued.

Currently, the FDA does not require clinical trials for medical devices to include Medicare patients. Medicare patients have more comorbidities and typically require higher acuity services, which could impact patient outcomes, CMS explained.

CMS also said it is seeking to repeal the standards for “reasonable and necessary” in Medicare Parts A and B because the new definition “presents implementation and appeals process challenges.”

Starting Dec. 15, the standard would have been updated to consider private payer coverage of services. But public comments demonstrated concern about how including private payer coverage in reasonable and necessary determinations would remove flexibilities and possibly impact Medicare’s ability to provide equitable access to care.

While CMS is seeking a full repeal of the final rule, it is inviting additional comments on the reasonable and necessary standards in Medicare. The agency also said it believes there are “other ways” to achieve faster access to breakthrough medical devices, such as leveraging existing pathways.

Stakeholders have also been invited to comment on the proposed repeal of the rule. Comments are due within 30 days of September 15, 2021.