CMS finalizes rule aimed at cutting lag time of Medicare coverage for breakthrough devices

The Trump administration finalized a rule Tuesday that will grant faster Medicare coverage decisions on new breakthrough medical devices.

The rule will tackle the lag time between when a new device is approved or cleared by the Food and Drug Administration (FDA) and when it gets covered by Medicare, a time the administration refers to as the “valley of death” for innovative products, officials have said. The rule creates an accelerated Medicare coverage pathway for "breakthrough" devices, or those which the FDA approves on an expedited basis. 

For example, officials said, it could be used for devices that harness technologies like implantation or gene-based tests to diagnose or treat conditions like cancer or heart disease. Under the rule, officials said, Medicare can provide national coverage simultaneously with FDA approval for up to four years.

After the coverage period is over, the Centers for Medicare & Medicaid Services (CMS) will reevaluate the device based on clinical and real-world evidence of improvement in health outcomes among Medicare beneficiaries to determine more permanent coverage, they said.

RELATED: Insurers slam CMS proposal to hasten Medicare coverage of breakthrough medical devices

The proposed rule, released in August, was lauded by medical device makers while it was initially panned by insurers who said the rule could lead to unsafe devices reaching seniors.

The rule would allow companies to seek national determination rather than individual local coverage determinations.

Based on public comments, the final rule included a more flexible start date for coverage to allow manufacturers to choose the date coverage begins to better align with manufacturing and distribution. Also based on public comments, CMS officials said, they will gather more information about utilizing commercial insurer coverage policies and utilize them under specific circumstances.

After the rule takes effect, Medicare may cover eligible breakthrough devices, including devices that received FDA marketing authorization approval within two calendar years of the final rules effective date. 

RELATED: CMS rule aims to reduce lag time between FDA approval and Medicare coverage of new devices

After the final rule takes effect, upon manufacturer request, Medicare may cover through the rule eligible breakthrough devices the FDA has approved, including breakthrough devices that received FDA marketing authorization approval within two calendar years prior to the final rule’s effective date, giving Medicare beneficiaries access to these innovative and potentially lifesaving devices.

The final rule clarifies the standard CMS uses to determine whether Medicare should cover items and services like devices and surgical procedures, officials said. Under the Medicare law, with relatively few exceptions, the program can only cover items or services that are “reasonable and necessary” for the diagnosis or treatment of illness or injury or improve the functioning of a malformed body member.

This final rule will codify CMS’ definition of reasonable and necessary in regulation to give innovators a clearer understanding of CMS standards, they said.