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CMS Proposed Rule: Unleashing Innovative Technology

Published on 

Tuesday, October 20, 2020

 | Billing 
 | Coding 

Pre-orders have started for Apple’s soon to be released iPhone 12. Imagine what it would be like for devoted iPhone fans if the time from placing a pre-order to when you could actually hold one in your hands followed the CMS timeline for approval for new healthcare technologies. This would definitely not be the timeline for creating and maintaining a consumer base of people wanting the latest technology available in an iPhone.

In September, 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.”

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.

Current Medicare Coverage Pathways

The MCIT pathway is being 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 details current Medicare coverage pathways in this proposed rule. Each pathway is highlighted in the following table. 

Current Medicare Coverage Pathways
PathwayPathway DescriptionStatutorily Prescribed Timeframe
National Coverage Determinations (NCDs)In general, NCDs are national policy statements published to identify the circumstances under which a Medicare item or service is covered.Pathway generally takes 9 to 12 months to complete.
Local Coverage Determinations (LCDs)LCDs apply only within a Medicare Administrative Contractor’s (MACs) geographic jurisdiction (i.e. Palmetto GBA Jurisdiction J encompasses AL, GA and TN).Pathway can take 9 to 12 months to complete.
Claim-by-Claim AdjudicationCoverage decisions made by a MAC in the absence of an NCD or LCD.Case-by-Case basis
Clinical Trial Policy (CTP)The CTP pathway was developed in 2000, can be used for coverage of routine care times and services in a clinical study supported by certain Federal Agencies.CTP in general has not been used by device manufacturers because coverage of a device is not included in this pathway
Parallel ReviewThis is a way for the FDA and CMS to simultaneously review submitted clinical data to help decrease the time between FDA approval and the subsequent CMS NCD.This process involved 2 stages:

1.       FDA & CMS meet with manufacturer to provide feedback on submitted data.

2.       FDA & CMS concurrently review clinical trial results.

Proposed MCIT Coverage Pathway

The MCIT Coverage Pathway would be specifically for Medicare coverage of devices that are designated as part of the FDA Breakthrough Devices Program and are FDA market authorized. The pathway would involve a coordinated effort by CMS, the FDA and manufacturers as medical devices move through the FDA regulatory process for Breakthrough devices. This simultaneous effort will ensure Medicare coverage on the date of FDA market authorization for all devices that fall within a Medicare benefit category.

MCIT Pathway Proposals:

  • The pathway would be voluntary and be initiated when a manufacturer notifies CMS of its intention to utilize the MCIT pathway.
  • To be part of the MCIT Pathway, the device must be used in accordance with its FDA approved or cleared indication for use.
  • Unlike the pathways in the above table, CMS is proposing that that MCIT Pathway would 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.
  • If CMS has issued an NCD for a specific breakthrough device, it would not be eligible for the MCIT pathway.
  • Coverage would continue for up to 4 years, unless CMS determines the device does not have a Medicare benefit category as determined as part of the pathway process.
  • Reasons that the MCIT pathway may end prior to 4 years includes circumstances where a device becomes subject to an NCD, regulation, statute, or if the device can no longer be lawfully marketed.

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.

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. They are also seeking comments on whether or not a National Coverage Analysis should be opened if a MAC has not issued an LCD within 6 months of the expiration date of the MCIT period.

MCIT Device Eligibility

CMS is proposing that devices having received Breakthrough Device designation within 2 years of the date this proposed rule is finalized will be eligible for coverage for claims submitted on or after the effective date of the final rule. This group of devices would not be eligible for all 4 years of MCIT coverage as the 4 year period starts on the date of FDA market authorization. CMS anticipates 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.

Proposal to Codify Definition of “Reasonable and Necessary”

In addition to the proposed MCIT Pathway, CMS is proposing 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.”

Proposal: “An item or service would be considered ‘‘reasonable and necessary’’ if it is— (1) safe and effective; (2) not experimental or investigational; and (3) appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is:

  • 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;
  • Furnished in a setting appropriate to the patient’s medical needs and condition;
  • Ordered and furnished by qualified personnel;
  • One that meets, but does not exceed, the patient’s medical need; and
  • At least as beneficial as an existing and available medically appropriate alternative.”

Proposal: An item or service would be “appropriate for Medicare patients” under (3) if it is covered in the commercial insurance market, except where evidence supports that there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals.

Proposal: An item or service deemed appropriate for Medicare coverage based on commercial coverage would be covered on that basis without also having to satisfy the bullets listed above.

CMS Seeking Comments to the Proposed Rule

In the world of CMS proposed rules, this one makes for a quick read at just 13 pages in the Federal Register. CMS is seeking comments on many aspects of this proposed rule and comments must be received by CMS no later than 5 p.m. on November 2, 2020.


CMS Press Release: CMS Acts to Spur Innovation for America’s Seniors

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

Proposed Rule (CMS-3372-P)

Article Author: Beth Cobb, RN, BSN, ACM, CCDS
Beth Cobb, RN, BSN, ACM, CCDS, is the Manager of Clinical Analytics at Medical Management Plus, Inc. Beth has over twenty-five years of experience in healthcare including eleven years in Case Management at a large multi-facility health system. In her current position, Beth is a principle writer for MMP’s Wednesday@One weekly e-newsletter, an active member of our HIPAA Compliance Committee, MMP’s Education Department Program Director and co-developer of MMP’s proprietary Compliance Protection Assessment Tool.

This material was compiled to share information.  MMP, Inc. is not offering legal advice. Every reasonable effort has been taken to ensure the information is accurate and useful.