Bill Would Require Medicare to Cover New Breakthrough Devices for at Least 4 Years

Producers of innovative medical and diagnostic devices got a dose of good news when lawmakers in the US House of Representatives tabled a bill (H.R. 4043) designed to provide Medicare beneficiaries faster access to such technology approved by the FDA.¹ Under the Ensuring Patient Access to Critical Breakthrough Products Act, products that receive breakthrough device designation from the FDA would be covered by Medicare for at least four years until the Centers for Medicare & Medicaid Services (CMS) decides whether to make coverage permanent. Here’s a look at the bill and what’s at stake.

Rewarding vs Thwarting Medical Innovation

While capitalism may have its detractors, few would argue against the power of the profit motive in driving innovation. And while government regulation may have detractors of its own, such rules are essential to protect public safety, particularly in the field of medical technology. The overall mission of the FDA is to strike the right balance between regulation and innovation. But, as even the agency occasionally recognizes, FDA regulation can be heavy-handed, costly, and slow.

The Breakthrough Devices Program is one of many initiatives the FDA has taken to expedite and facilitate its regulatory process.² Purely voluntary, the program empowers the FDA to grant a breakthrough designation to new medical devices or device-led combination products for life-threatening or debilitating conditions for which there are currently no approved alternatives or which offer demonstrated and significant advantages over such alternatives.³

Securing breakthrough device designation enables companies to get their products to the US market more rapidly than would have been able possible via pursuit of traditional FDA pathways. The result is that providers and patients get access to the product sooner. At least that’s the theory. In reality, barriers remain.

Just reaching the market is only the first step. To generate profits, companies must get providers and patients to actually use their products. That often involves securing coverage from payers. And the simple fact that the FDA has cleared a product isn’t always enough to persuade insurers that the product is safe, suitable, and effective for their beneficiaries.

In the US, no payer is more important than Medicare. In addition to more than 65 million enrollees, Medicare has tremendous influence over the coverage decisions made by other public and private payers. CMS is responsible for making Medicare coverage decisions. Unfortunately, the Medicare coverage determination process is notoriously slow, taking up to three years, according to bill co-sponsor Suzan DelBene, D-Wash. Such delays mean seniors have to wait to access potentially life-changing new diagnostic and treatment options, DelBene notes.⁴

The New H.R. 4043 Bill

The goal of the new bill is to eliminate these barriers so that providers can order, patients can use, and producers can get paid for new medical devices immediately after they receive breakthrough designation from the FDA.

“Guaranteeing Medicare coverage of breakthrough medical devices would encourage future innovation and investment in next-generation medical technologies while improving the quality of life for millions of seniors,” says DelBene in a statement. “We can’t let the coverage approval process be a barrier to life-saving treatments or care.”⁴

If the concept sounds familiar, it’s because we’ve been down this road before. In August 2020, CMS proposed a rule requiring Medicare to cover medical devices that receive Section 510(k) breakthrough device designation for at least four years. Specifically, the Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary” rule would have recognized such devices as meeting 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.⁵

Once the initial four-year 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 determination (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.

Takeaway: Passage of the New Bill Is Anything but Assured

One of the first things the Biden administration did upon taking control was to put a hold on what it deemed questionable CMS rules proposed and finalized in the final days of the Trump regime, including the breakthrough coverage rule.⁶ In November 2021, CMS officially rescinded the rule.⁷ The new bill is pretty much a legislative version of the CMS rule that the Biden administration rejected. However, the fact that it comes from Congress and enjoys bipartisan support may not be enough to offset the objections that led to that previous rejection.

Aside from the politics, there were and are legitimate clinical concerns that automatic Medicare coverage of breakthrough devices would expose seniors to unproven and potentially dangerous products. Critics of the original CMS rule, including the bipartisan Medicare Payment Advisory Commission (MedPAC), pointed out that the FDA breakthrough device and Medicare “reasonable and necessary” coverage criteria are an apples-to-oranges comparison requiring completely different forms of medical evidence. Moreover, MedPAC contends that forcing CMS to cover breakthrough devices would strip the agency of its independent scientific review responsibilities in deciding what Medicare should cover.⁸

Still, H.R. 4043 is a potentially significant piece of legislation that could have a direct impact on not only medical device, but also diagnostics companies and labs.

References:

1. https://delbene.house.gov/uploadedfiles/breakthrough_bill_text.pdf
2. https://www.fda.gov/medical-devices/how-study-and-market-your-device/breakthrough-devices-program
3. https://www.fda.gov/combination-products/about-combination-products
4. https://delbene.house.gov/news/documentsingle.aspx?DocumentID=3430
5. https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-19289.pdf
6. https://www.g2intelligence.com/cms-to-create-new-breakthrough-device-medicare-coverage-rule/
7. https://www.cms.gov/newsroom/press-releases/cms-repeals-mcitrn-rule-will-consider-other-coverage-pathways-enhance-access-innovative-medical
8. https://www.medpac.gov/wp-content/uploads/import_data/scrape_files/docs/default-source/comment-letters/04132021_mcit_medpac_comment_with_2020_letter_sec.pdf

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