CMS final rule will bring new medical technologies to Medicare beneficiaries faster

WASHINGTON, D.C. (January 14, 2021) — The Centers for Medicare & Medicaid Services (CMS) issued a final rule on Tuesday that propels innovative technology so Medicare beneficiaries have access to the latest, most advanced devices. The action is designed to help smooth the Medicare coverage pathway for innovative products, resulting in faster access to new devices for America’s seniors. This action delivers on CMS’s Unleashing Innovation and Patients Over Paperwork Initiative.

The Medicare Coverage of Innovative Technology (MCIT) (CMS-3372-F) final rule will provide the nation’s more than 60 million Medicare beneficiaries access to the latest medical technology faster than ever. Under current rules, FDA approval of a device is followed by an often lengthy and costly process for Medicare coverage. The lag time between the two results in innovators first spending time and resources on FDA approval, and then subsequently on the Medicare coverage process. This causes undue burden for innovators and could delay access to these potentially lifesaving technologies during the existing Medicare coverage determination process.

“Government processes have slowed beneficiaries’ access to innovative treatments. Despite being deemed safe and effective by the FDA, Medicare beneficiaries have not had predictable, immediate access to innovative breakthrough devices,” said CMS Administrator Seema Verma. “In an ever-evolving health care marketplace, CMS remains committed to transforming the health care delivery system through initiatives like MCIT that focus on results, removing government barriers to advancing innovations, fostering competition, and ensuring quicker access to the most advanced therapies for Medicare beneficiaries while providing them with better value and outcomes.”

The MCIT rule will eliminate this lag time for both seniors and innovators. It will create a new, accelerated Medicare coverage pathway for innovative products that the FDA deems “breakthrough,” which FDA approves on an expedited basis and could include devices harnessing new technologies like implants or gene-based tests to diagnose or treat life-threatening or irreversibly debilitating diseases or conditions like cancer and heart disease. Under the MCIT rule, Medicare can provide national coverage simultaneously with FDA approval, up to a period of four years.  After the coverage period is over, 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. This four-year timeline may incentivize the manufacturers of these breakthrough devices to develop additional evidence regarding the applicability of their products to the Medicare population, so they might continue Medicare coverage beyond the initial four years.

Because the MCIT rule will provide national Medicare coverage for four years, it will harmonize with the local coverage determination (LCD) process, thus promoting equal access for seniors regardless of where they live.  Currently, under the local coverage process, 16 Medicare Administrative Contractors (MACs) make Medicare coverage decisions on the local level – 12 for Medicare Parts A and B, and four for Durable Medical Equipment. MACs can cover items or services on a claim-by-claim basis or through a Local Coverage Determination (LCD), which applies only to that MAC’s jurisdiction. In the absence of national Medicare coverage decision for an innovative technology, the technology could be covered in one area of the country but not in another.

Additionally, to secure an LCD, innovators are required to seek separate decisions from each of the MACs.  MCIT makes this step for innovators unnecessary, which helps innovators and beneficiaries alike. Under MCIT, breakthrough devices are given national coverage for four years, as early as the date of FDA approval, meaning innovators no longer have to seek LCDs from each MAC.  Innovators will have the option to choose when they would like coverage to begin.  This will give innovators flexibility to align the coverage process with their manufacturing and distribution cycles.

After the final rule takes effect, upon manufacturer request, Medicare may cover through MCIT 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 life-saving devices.

In addition, the MCIT final rule will clarify the standard CMS uses to determine whether Medicare should cover items and services, like devices and surgical procedures. 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’s definition of reasonable and necessary in regulation to give innovators a clearer understanding of CMS standards. 

Based on public comment, the final rule included a more flexible start date for MCIT coverage.  Manufacturers can choose the date coverage begins to better align with market availability.  Also, as stakeholders requested, CMS will gather more information about utilizing commercial insurer coverage policies and utilize them under specific circumstances.

For a fact sheet on the final rule (CMS-3372-F), please visit: https://www.cms.gov/newsroom/fact-sheets/medicare-coverage-innovative-technology-cms-3372-f

The final rule (CMS-3372-F) can be downloaded from the Federal Register at: https://www.federalregister.gov/public-inspection/2021-00707/medicare-program-medicare-coverage-of-innovative-technology-and-definition-of-reasonable-and