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

A major insurance group blasted a proposed rule intended to grant faster Medicare coverage decisions on new breakthrough medical devices, saying the rule could lead to unsafe devices reaching seniors.

The rule, proposed by the Centers for Medicare & Medicaid Services (CMS) back in September, aims to address a lag time from when the Food and Drug Administration (FDA) approves a device and when CMS delivers a national coverage determination (NCD) that would determine whether Medicare covers it.

But America’s Health Insurance Plans (AHIP), the top insurance lobbying group, said there is a vital reason for that lag time.

The proposed pathway could result in a “less rigorous evidence-based coverage process and potentially result in premature coverage of unproven devices for the Medicare population,” AHIP said in comments on the rule. The comment period closed Monday.

The new pathway would only apply to devices that are cleared through the agency’s 510(k) pathway and have a breakthrough designation, which applies to devices that provide a better treatment for life-threatening or debilitating diseases. Under the 510(k) pathway, a device only needs to prove it is similar to another device on the market and bypasses more rigorous clinical studies.

Normally, it takes CMS nine to 12 months to finalize an NCD on a device after it clears the FDA.

AHIP commented that after a medical device is approved by the FDA, a plan’s medical policy committee evaluates its safety and efficacy.

“Absent an NCD, health insurance providers use evidence-based guidelines to develop medical coverage policies,” AHIP said.

However, the proposed pathway would act instead as an “interim NCD” with a less rigorous coverage process, the group commented.

AHIP was also concerned that the 510(k) pathway has sometimes been used to clear medical devices to enter the market without comprehensive safety evaluations.

If CMS decides to continue with the pathway in a final rule, AHIP wants the agency to add a process for stakeholders to evaluate the device for safety, efficacy and value before a Medicare coverage determination is made.

The Medicare Payment Advisory Commission (MedPAC), a panel that advises Congress and CMS on Medicare coverage issues, was also concerned about using the FDA’s approval process to determine Medicare coverage.

“The FDA’s role in the drug and device development process as a regulator is distinct and separate from the role of CMS as a payer,” the panel said in comments on the rule.

The panel said the FDA looks at whether a device is safe and effective for its intended use but may or may not include whether that device is safe for the Medicare population.

CMS should, at the very least, include a coverage with evidence development policy that would still gather clinical evidence on the device, MedPAC said.

The panel was also concerned with CMS’ decision to modify the definitions of “reasonable and necessary” in coverage determinations. Federal law requires Medicare Part A and B to cover items and services that are “reasonable and necessary” for diagnosis or treatment.

Factors used to make this determination include whether the device is safe and effective and is not experimental or investigational.

However, the proposed rule said that commercial insurance coverage could be used to meet the “reasonable and necessary” standard.  

But relying on commercial coverage policies could result in coverage of services that don’t improve the outcomes for Medicare patients, MedPAC warns.

“The proposal circumvents Medicare’s coverage determination processes and could undermine Medicare’s evidentiary standard,” the panel added.

AHIP said CMS should not make any decisions based on how a single commercial plan covers a device.

“Coverage by a majority of health insurance providers or a majority of commercial enrollees would be more representative,” AHIP said.

The medical device industry also has concerns with the rule’s proposed definitions.

“Commercial insurance coverage decisions lack transparency and processes for stakeholder engagement and are not appropriate for inclusion in Medicare’s reasonable and necessary definition,” said the Advanced Medical Technology Association (AdvaMed), the leading device lobbying group, in comments.

However, AdvaMed cheered the moves to hasten coverage determination for breakthrough devices.

“CMS is sending a signal to the entire innovation ecosystem that taking the risk to develop new breakthroughs will be rewarded if those devices receive FDA marketing authorization and improve patient care,” the group said.