CMS Repeals Rule Providing Expedited Medicare Coverage for MCIT “Breakthrough” Devices

It’s official. On Nov. 12, the US Centers for Medicare and Medicaid Services (CMS) announced that it was repealing a Trump administration final rule that, effective Dec. 15, 2021, would have expedited Medicare coverage for certain medical devices, including in vitro diagnostic tests. Here’s a quick briefing on the latest developments and their impact on the lab industry.

The MCIT Breakthrough Devices Rule

Originally proposed in August 2020, the “Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary’” rule would have made medical devices that receive Section 510(k) breakthrough device designation from the US Food and Drug Administration (FDA) covered by Medicare for at least four years. Under the rule, such breakthrough devices would be deemed to meet the “reasonable and necessary” standard set out in Section 1862(a)(1)(A) of the Social Security Act for purposes of Medicare coverage. This initial determination would have stood over a four-year period starting on the date of FDA market authorization.

Once the initial period ended, CMS would have had to perform a new “reasonable and necessary” evaluation of the device based on clinical and real-world evidence of improved health outcomes. Based on the results, devices would then have received:

• An affirmative national coverage decision (NCD) from CMS;
• A negative NCD from CMS; or
• A coverage determination made by the Medicare Administrative Contractor (MAC) via local coverage determinations (LCD) or on a claim-by-claim basis.

The justification: Coverage under the NCD and LCD processes typically takes nine to 12 months to finalize, which delays Medicare patient access to innovative devices. There are also inconsistencies in coverage across geographical markets due to differences in LCDs of local MACs.

The Controversy Over the Rule

The breakthrough device coverage rule was one of the many 11th-hour Trump rules on which the incoming Biden regime imposed a regulatory freeze within hours of taking office. After extending the freeze, the administration has now decided to officially repeal the rule.

Opponents of the rule, including the bipartisan Medicare Payment Advisory Committee, (MedPAC) had contended that FDA breakthrough device authorization and Medicare “reasonable and necessary” coverage approval is an apples-to-oranges comparison requiring different forms of medical evidence. Forcing CMS to cover new devices just because they get 510(k) certification would strip the agency of its scientific review responsibilities and expose Medicare patients to new technologies of unproven effectiveness and safety, they argued.

The announcement to repeal the rule cites these concerns. According to CMS, the clinical studies needed for FDA authorization “might not consider the differences in clinical profiles, complexities of medical conditions, or associated treatments of the diverse population of Medicare patients.”

“Under the rule we are repealing, CMS may have covered devices without adequate evidence to demonstrate that the device would be reasonable and necessary to diagnose or treat the Medicare population for particular medical conditions,” noted Lee Fleisher, CMS chief medical officer, in a statement.

Impact on Labs

While not surprising, the decision to repeal the MCIT rule represents a setback for developers of new lab tests. Assurance of Medicare coverage would have gone a long way toward breaking down barriers to research and development and incentivizing investment in novel diagnostics. In addition to the four years of assured coverage for new devices, the rule might have also incorporated a “lookback” window covering devices approved within the two-year period before the rule took effect. There was even talk of CMS extending the “lookback” window beyond two years to cover all breakthrough devices approved by the FDA so far.

The good news is that the idea of having some form of expedited coverage for breakthrough devices isn’t totally dead. CMS said it plans to work with the FDA, the US Department of Health and Human Services’ Agency for Healthcare Research and Quality, manufacturers and other stakeholders to “develop an expeditious process to cover innovative devices that benefit Medicare patients.” The agency also said it plans to hold at least two stakeholder meetings in 2022 to address future policies in the space.

Until such efforts come to fruition, makers of new tests and devices will have to rely on the existing slow and cumbersome pathways like NCDs, LCDs and claim-by-claim determinations for Medicare coverage of their products.