Jianyuan (Yuan) Hua, FDA Regulatory and Compliance Associate in New York, contributed to the drafting of this post.
On November 12, 2021, the Centers for Medicare and Medicaid Services (CMS) issued a final rule rescinding the Medicare Coverage of Innovative Technology and Definition of "Reasonable and Necessary" final rule (MCIT/R&N). As we reported in an earlier blog post, CMS first proposed to repeal the MCIT/R&N in September 2021. The Final Rule was issued after a 30-day public comment period.
We note that CMS received over 100 comments. Not all commenters agreed with CMS's decision – some argued that repealing the MCIT/R&N would endanger patients, while others argued that CMS can address any outstanding issues through subsequent proposed rules. However, most comments echoed CMS's concerns that FDA safety and effectiveness standards alone are not sufficient to meet the statutory requirements for Medicare coverage, which require that a device be reasonable and necessary for the treatment of the patient. Additionally, multiple stakeholders agreed with CMS that open-ended coverage as outlined by MCIT would harm Medicare beneficiaries, who are often older and underrepresented in clinical studies. The comments also cautioned that the MCIT pathway could potentially give an unfair advantage to breakthrough devices and stifle competition by overlooking second-to-market and non-breakthrough technologies.
The repeal of the MCIT/R&N in the Final Rule does not mark the end of CMS seeking to provide coverage pathways for innovative and beneficial technologies. Rather, CMS seeks to open dialogue with the FDA, medical device manufacturers, and other stakeholders to develop a holistic approach that does not undermine Medicare beneficiary safety concerns. CMS and the Agency for Healthcare Research and Quality (AHRQ) will review the current Coverage with Evidence Development (CED) study criteria and determine whether they can update the criteria to provide advanced technology to Medicare beneficiaries without overlooking safety concerns that are unique to these patient populations. CMS welcomes dialogue from all interested parties and will hold at least two stakeholder meetings during 2022 to inform its decision-making process. Lastly, CMS encouraged informal engagement with the agency to inform the agency's development of alternative expedited coverage pathways.
Meanwhile, CMS noted in the Final Rule that coverage for innovative technologies remains possible through claim-by-claim adjudication, local coverage determinations (LCDs), and national coverage determinations (NCDs), including plans to expedite the NCD process. In addition, the 21st Century Cures Act ("Cures 2.0 Act") draft, which builds on White House infrastructure goals to improve health care, may provide CMS with new statutory authority to provide coverage for breakthrough devices. We will continue to monitor developments in this space.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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