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Medicare Coverage of Innovative Technology

Medicare patients will have coverage for medical devices the FDA designates as breakthrough technology under a proposed rule released this morning.

Once the Medicare Coverage of Innovative Technology (MCIT) final rule goes into effect, national Medicare coverage will begin on the date of a breakthrough device’s FDA market authorization would begin and continue for 4 years.

The proposed rule, scheduled to be published September 1 in the Federal Register, has been under discussion for years and would remedy a nationwide patchwork of Medicare coverage for such devices. Currently, a breakthrough device may be covered in one state or area of a state and not another, depending upon a local coverage determination made by a Medicare administrative contractor.

The MCIT pathway would be voluntary and device manufacturers would notify the Centers for Medicare and Medicaid Services if they want to use this coverage option.

“This coverage pathway delivers on the Administration’s commitment to give Medicare beneficiaries access to the newest innovations on the market, consistent with the statutory definitions of Medicare benefits,” U.S. Department of Health and Human Services administrator Alex Azar said in the proposed rule.

Medtech trade group AdvaMed hailed the publication of the proposed rule as a big step in a long struggle by the industry.

“In order to incentivize innovative medical breakthroughs, the federal government must ensure those breakthrough technologies are covered by Medicare,” said AdvaMed President and CEO Scott Whitaker in an email to MassDevice. “We are pleased that this proposed rule gets us closer to this goal, as it would help ensure the patients who need these innovative technologies have access to them.”

MCIT-covered devices would also have to fit Medicare statutory definitions of “reasonable and necessary” for treating patients. To that end, the proposed rule would refine the definitions of “reasonable and necessary.” Among the requirements, devices would need to be considered:

  • Safe and effective.
  • Not experimental or investigational.
  • Appropriate for Medicare patients, including the duration and frequency that is considered appropriate and whether it is covered by commercial insurers.

“Stakeholders have expressed interest in codifying a definition of ‘reasonable and necessary’ for many years,” Azar said in the proposed rule. “This proposed definition is familiar and functional, can satisfy that interest and meet (an October 2019 executive order to make Medicare coverage of breakthrough devices widely available) while also aligning with the goals of MCIT by providing clarity and predictability for innovation, including for beneficiaries and innovators.”

The proposed changes came as good news to medtech companies large and small.

“The proposed rule will improve patients’ lives by providing more timely access to safe and effective breakthrough therapies,” said Edwards Lifesciences (NYSE:EW) CEO Mike Mussallem in a news release from AdvaMed. “At a time of heightened national awareness of the importance of health care innovation to quality patient care, it will also help support an innovation ecosystem and bring value to the health care system. The medtech industry looks forward to working closely with CMS on this and additional ways to facilitate the coverage and payment process for the benefit of patients.”

“CMS’s proposal complements provisions in several recent Medicare rules that have enhanced new technology add-on payments (NTAP) and transitional pass through (TPT) payments for FDA-designated breakthrough technologies,” added Dr. John Liddicoat, EVP and president of the Americas region for Medtronic (NYSE:MDT). “While we are still reviewing the proposed rules to understand their full impact, it appears that combined, these rules will go a long way toward modernizing payment and coverage of transformational medical technologies, incentivizing innovation, and most importantly, improving patient care by ensuring Medicare beneficiary access to these new therapies.”

“These proposals are especially important to start-ups and small company innovators, which are an essential part of the medtech ecosystem,” said Simos Kedikoglou, CEO of cardiac contractility modulation therapy developer Impulse Dynamics. “For such companies, which often have limited capital resources, CMS’s action will help support patient access to life-changing breakthroughs and their development.”

Prashant Tambe
Prashant Tambe
An expert in SEO, Prashant carries an experience of over five years in the industry. He has the ability to analyze global industry trends that helps the leaders to make smarter decisions. An electrical, electronics and communication engineer, Prashant is able to predict future trends as they are changing fast with technological development.