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

The Trump administration issued a proposed rule intended to get Medicare coverage approval of new medical devices faster.

The proposed rule released Monday would tackle the lag time between when a new device is approved or cleared by the Food and Drug Administration and get covered by Medicare, a time the administration refers to as the “valley of death” for innovative products.

The rule would create a new, faster Medicare coverage process for devices the FDA gives a “breakthrough” designation to. Such devices are cleared at a faster rate by the agency because they treat an unmet medical need.

For devices approved under the new process, Medicare would give national coverage simultaneously with FDA approval. The coverage would extend for four years.

“After that time, CMS may reevaluate the device based on clinical and real-world evidence of improvement in health outcomes among Medicare beneficiaries,” the Centers for Medicare & Medicaid Services said in a release.

The additional four-year time frame is intended to incentivize manufacturers to create more evidence regarding how the device can be applied to the Medicare population so they can extend the coverage decision.

CMS hopes the new rule will also streamline decisions on new and innovative products. Currently, under the local coverage decisions, 16 Medicare contractors make Medicare coverage decisions on a local level.

Each of the contractors’ decisions apply to a different geographic area.

“In the absence of national Medicare coverage for an innovative product, the product could be covered by a patchwork of [local coverage decisions], meaning a senior in one area could have access, while another senior in a different area would not,” CMS said.

The new Medicare Coverage of Innovative Technology pathway means that device manufacturers don’t need to get local coverage approvals.

The pathway would extend to breakthrough medical devices that the FDA has approved in 2019 and 2020.

The rule also seeks to clarify the standard CMS uses to determine if Medicare covers a certain drug, device or biologic.

Federal law says Medicare will only pay for items and services that are “reasonable and necessary” for Medicare beneficiaries. But the proposal will further clarify what is and is not reasonable or necessary.

The agency also has worked to reduce a backlog of requests for Medicare coverage of new devices, some of which have been waiting for approval since 2014.

“In 2019 there were 11 [national coverage determination] applications waiting for CMS review,” CMS said in a release. “By the end of 202, CMS will have addressed nine of those 11.”

The medical device industry lauded the changes. 

"The 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 device company Impulse Dynamics, in a statement provided by device lobbying group AdvaMed.