Medical-device industry, MedPAC oppose CMS’ proposed coverage determination changes

Medical-device associations are urging CMS to withdraw its proposal changing how Medicare determines if a service or item will be covered.

In a proposed rule released in late August, CMS would modify Medicare’s long-standing standards for coverage. Currently, CMS considers a service for coverage if it’s a recognized Medicare benefit and “reasonable and necessary” for treatment or diagnosis, which isn’t currently defined. CMS is proposing to define the “reasonable and necessary” stipulation as meaning an item or service is safe and effective, not experimental and appropriate. CMS then gave appropriateness several definitions including if a service or item is currently covered by commercial insurance.

Comment letters for the proposed rule were due Monday and stakeholders are pushing back.

The Medical Device Manufacturers Association said in its letter to CMS that the agency should withdraw the proposals related to the “reasonable and necessary” definitions.

Similarly, AdvaMed, which represents 400 medical-device and digital technology companies, said CMS should hold town halls and listening sessions with an array of stakeholders before implementing “such an important and permanent change in regulatory language.”

Both the Medical Device Manufacturers Association and AdvaMed took issue with the proposal to use commercial insurance coverage to make Medicare coverage determinations. The Medical Device Manufacturers Association said the process Medicare currently uses relies on stakeholders and decisions can be appealed, whereas in the commercial insurance space its unclear when medical experts are used and there is no appeals process. “There is little transparency (in the commercial insurance space) regarding criteria or process,” the association said in the letter.

In its comment letter, the Medicare Payment Advisory Commission also strongly opposed Medicare using commercial insurance coverage to make coverage determinations. Commercial insurers don’t evaluate the appropriateness of a service for Medicare beneficiaries, which MedPAC said could cause Medicare to cover services that don’t improve outcomes for those 65 and older.

The MDMA and AdvaMed were supportive of CMS’ other proposal in the rule to begin covering in Medicare “breakthrough” devices as defined by the Food and Drug Administration. The FDA’s Breakthrough Devices Program is a voluntary option for manufacturers to secure quicker approval of their device. The program is only open to devices that provide effective treatment or diagnosis of a life-threatening or debilitating condition and they must use a breakthrough technology, offer significant advantages compared with existing alternatives or have no approved clearance currently in existence.

By covering breakthrough devices, “CMS is sending a signal to the entire innovation ecosystem that taking the risk to develop new breakthroughs will be rewarded,” AdvaMed said in its letter.

AdvaMed recommended CMS also pay for similar devices that aren’t part of the FDA’s “breakthrough” program. The FDA doesn’t currently approve devices with the same intended uses more than once in its breakthrough program.

The proposed rule involves Medicare covering the use of a breakthrough device for four years after it receives FDA market authorization, which both AdvaMed and the Medical Device Manufacturers Association support. After the four years, manufacturers can use the usual available coverage options to receive permanent reimbursement in Medicare.

CMS also isn’t requiring that manufacturers conduct clinical trials or studies on the Medicare population to evaluate devices’ impact on health outcomes. The Medical Device Manufacturers Association said while it supports that provision it would like clarity from CMS on what information should be collected in order to receive permanent approval after the four years.

The FDA’s Breakthrough Devices Program uses premarket clearance to bring devices to market. In its comment letter, MedPAC said there is evidence that premarket clearance from the FDA doesn’t indicate a device is safe or effective. MedPAC urged CMS to require devicemakers to collect clinical evidence. The patient safety organization ECRI also urged something similar.

“The Commission remains concerned about inappropriate incentives (through increased payment) for providers to use new technology without proven safety or efficacy,” MedPAC said.