On June 22, 2023, Centers for Medicare & Medicaid Services (CMS) released the highly anticipated proposed Medicare device coverage pathway for breakthrough medical devices, known as Transitional Coverage for Emerging Technologies (CMS-3421).  Rather than a newly proposed rule, CMS released a proposed notice, which describes the process CMS will use to provide transitional coverage for emerging technologies (TCET) through the existing national coverage determination[1] (NCD) process. CMS states the TCET pathway can be implemented faster and modified more easily if established through a procedural notice. The unpublished notice is available here and the CMS fact sheet is available here.

CMS also published an updated proposed Coverage with Evidence Development guidance document and an updated National Coverage Analysis Evidence Review guidance document.

Comments are due August 21, 2023.

BACKGROUND ON MEDICARE COVERAGE OF INNOVATIVE TECHNOLOGIES

The medical device industry and stakeholders have been waiting for this rule for a number of years after the Biden Administration scrapped a Trump-era final rule before it went into effect in 2022. Previously known as the Medicare Coverage of Innovative Technology (MCIT) rule, the last version would have granted automatic Medicare coverage of any device that received a Breakthrough Designation[2] from the Food and Drug Administration (FDA). In November 2021, CMS rescinded the final rule and stated that “CMS no longer believes that it is appropriate to grant all FDA market authorized Breakthrough Devices automatic coverage solely based on its Breakthrough Designation.” CMS was largely concerned with giving up its authority to make coverage decisions for the Medicare population. CMS rescinded the rule with the promise that the agency would continue to work on an alternative device coverage plan. CMS held two stakeholder meetings in 2022, and the rule has been highly anticipated by the entire device industry.

On several occasions since rescinding the original rule, CMS alluded to utilizing its existing NCD process for these devices to accelerate patient access to innovative medical products while generating evidence that it is appropriate and helpful for the Medicare population.

NCDs are national policy statements which outline when and for whom an item or service is covered by Medicare. Typically, CMS establishes or revises NCDs based on health outcomes data. Many devices that are early in the product lifecycle do not have health outcomes data or have very little data that includes Medicare populations. CMS utilizes a process known as NCD with Coverage Evidence Development (CED) for new technologies or services, which allows providers to perform studies under certain conditions that may lead to a future NCD. In general, CED is a drawn-out process that does not always lead to an NCD and leaves most Medicare beneficiaries without access to that item or services if they are not participating in the studies. Over the last two decades, CMS has issued 26 NCDs requiring CEDs and only three of those led to a national coverage policy without CED.

CMS also has a process known as the Parallel Review program which allows CMS and FDA to simultaneously review the clinical data submitted by a manufacturer with the goal of decreasing the time between FDA approval and the subsequent CMS coverage. FDA and CMS review the data independently from each other and determine whether it meets their standards. CMS has continuously highlighted that the FDA review of devices does not focus specifically on the Medicare population and that the evidence required for FDA approval is not the same as the evidence required for Medicare coverage. Therefore, CMS is establishing the TCET pathway to support manufacturers who want to work with CMS to generate additional evidence that is appropriate for the Medicare population and that can potentially help expedite Medicare coverage.

TCET PATHWAY WILL UTILIZE EXISTING COVERAGE WITH EVIDENCE DEVELOPMENT PROCESS FOR NATIONAL MEDICARE COVERAGE

The proposed TCET pathway is an expedited national coverage pathway for eligible Breakthrough Devices that are FDA market authorized. CMS’s goal is to finalize a TCET NCD within six months of FDA market authorization. The normal statutory timeline for CMS to establish an NCD is nine to twelve months, but it often takes longer. The proposal to finalize an NCD within six months is a bold step by CMS. CMS would also coordinate benefit category determination, and facilitate coding, and payment reviews for devices under the TCET pathway.

CMS states that the TCET pathway intends to “balance multiple considerations when making coverage determinations,” including:

• Facilitating early, predictable, and safe beneficiary access to new technologies
• Reducing manufacturer’s and innovators’ uncertainty about coverage by evaluating early the potential benefits and harms of the technologies, and
• Encouraging evidence development if evidence gaps exist.

Device Eligibility for TCET Pathway

Devices that are eligible for the TCET pathway include:

• FDA-designated Breakthrough Devices
• Determined to be within a Medicare benefit category
• Not already the subject of an existing Medicare NCD, and
• Not otherwise excluded from coverage through law or regulation.

Diagnostic lab tests granted Breakthrough Designation are not eligible for the TCET pathway.

Participation in the TCET pathway will be voluntary and not all Breakthrough Devices will qualify- especially if the device is already covered under an existing NCD or if it is not separately payable (i.e., furnished under a bundled payment).

CMS Outlines the TCET Pathway Procedures

CMS states that the agency will coordinate with the FDA and manufacturers of Breakthrough Devices as those devices move through the FDA premarket review process. Breakthrough Devices must meet two criteria: 1) device provides for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions and 2) device represents a breakthrough technology with no approved alternatives, it offers significant advantages over existing approved alternatives, or device availability is in the best interest of patients.

Manufacturers will be required to submit TCET pathway nominations one year prior to the anticipated FDA approval. The nomination process is outlined as an email to CMS with supporting documents. CMS will provide at least a preliminary decision to accept or decline the nomination within 30 business days following the receipt of the email submission. CMS states that it may take longer to determine whether or not the technology fits within a benefit category and that CMS will send a final decision on the nomination at that has been determined.

After the initial acceptance of the nomination, CMS will first meet with the manufacturer, then with its counterparts at FDA. CMS will then determine whether the device is an appropriate candidate for the TCET pathway.

Following the determination that the device is an appropriate candidate, CMS will conduct an Evidence Preview to identify and provide feedback on evidence gaps to the manufacturer. At Medical Device Manufacturers Association’s Annual Meeting in April 2023, CMS Chief Medical Officer, Dr. Lee Fleisher, announced that CMS was looking into outsourcing parts of the device review process in order to prevent a backlog once the TCET rule becomes effective. In this proposed notice, CMS states that the Evidence Preview will be conducted by a contractor using standardized evidence grading, risk of bias assessment, and applicability assessment.

CMS estimates that the Evidence Preview will take at least 12 weeks. CMS aims to have manufacturers involved in the Evidence Preview process by holding a meeting to discuss outcomes and potential errors and concerns. CMS will share findings of the Evidence Preview with the Medicare Administrative Contractors. At this point, the manufacturer will decide whether to pursue the TCET pathway or not. If the manufacturer chooses to continue, the manufacturer will submit a formal NCD letter to CMS to open a TCET NCD analysis along with an Evidence Development Plan (EDP) to address the gaps identified in the Evidence Preview process.[3] CMS and the manufacturer will work collaboratively to finalize the EDP within 90 business days of FDA market authorization. The EDP must also be approved by the Agency for Healthcare Research and Quality (AHRQ).

When the device that is accepted to the TCET pathway receives FDA approval, CMS will initiate the NCD process by posting a tracking sheet, pending the CMS and AHRQ-approved EDP. Approved EDPs will be published on the CMS website for public comment, after which CMS will review and issue a proposed TCET NCD and EDP. After another public comment period, CMS will publish a final TCET NCD within 90 days of the proposed TCET NCD.

Most TCET NCDs are expected to be CED NCDs.

CMS states that because most emerging technologies are likely to have limited or developing clinical evidence that may or may not have the Medicare population included, most emerging technologies will go through the NCD with CED process.

CMS works in conjunction with AHRQ to review and revise the CED criteria. In February 2023, CMS and AHRQ held a public Medicare Evidence Development & Coverage Advisory Committee (MEDCAC) meeting to discuss updates to the criteria for CED studies. Along with the notice today, CMS publishes its updated criteria in the proposed CED guidance document for stakeholder feedback.

Completion of studies under a CED NCD are expected to take 3-5 years, after which CMS will review evidence and decide whether to remove the CED requirement, continue the CED requirements or propose a non-coverage NCD. CMS may also decide to permit local MAC discretion to cover the device rather than a national coverage policy. CMS will publish the decisions in a proposed NCD for public feedback.

CMS shared the diagram[4] below to illustrate the proposed TCET pathway and timeline:

CMS Will Accept a Limited Number of TCET Candidates

CMS anticipates that it will accept up to five TCET candidates annually due to CMS constraints and devices that are determined to have the potential to benefit the greatest number of Medicare beneficiaries will be prioritized.

Manufacturers and CMS will have the option to withdraw from the pathway until CMS opens the NCD by posting a tracking sheet on its website. CMS says it will not publicly disclose participation of a manufacturer in a TCET pathway prior to posting of an NCD tacking sheet unless the manufacturer has already made this information public.

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This Applied Policy® Summary was prepared by Simay Okyay McNutt with support from the Applied Policy team of health policy experts. If you have any questions or need more information, please contact her at sokyay@appliedpolicy.com or at (202) 558-5272.

[1] §1862(1)(6)(A)

 

[2] n 515B of the FD&C Act, 21 U.S.C. 360e-3

[3] Traditionally, CMS has not utilized real-world data or fit-for-purpose study designs when considering suitable studies for a national coverage determination. However, CMS states that for devices in the TCET pathway, the manufacturer may include traditional clinical study designs or fit-for-purpose (FFP) study designs, including use of real-world data (RWD), in its EDP. This is welcome news to the device industry as they strongly encouraged CMS to allow FFP study design and use of RWD.  FFP studies are generally less burdensome than traditional study designs.

 

[4] Page 33 of the unpublished rule.

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