Expedited breakthrough device coverage, “reasonable and necessary” definition delayed until Dec. 15

On May 14, 2021, the Centers for Medicare & Medicaid Services (CMS) released a display copy of a Final Rule (Final Rule) further delaying the effective date of the Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary” Final Rule (MCIT Final Rule) until December 15, 2021.

As a reminder, the MCIT Final Rule established:

  • A Medicare coverage pathway to provide Medicare beneficiaries faster access to new, innovative medical devices designated as breakthrough devices by the Food and Drug Administration (FDA) with 4 years of National Medicare coverage starting on the date of FDA market authorization or a manufacturer-chosen date within 2 years thereafter.

  • Regulatory standards to be used in making reasonable and necessary determinations under §1862(a)(1)(A) if the Social Security Act for items and services furnished under Medicare Parts A and B.

  • An alternative method of meeting the “appropriate for use in Medicare beneficiaries” criterion for reasonable and necessary determinations based on whether there is coverage by a majority of commercial insurers, with CMS to issue draft guidance implementing this method of meeting the appropriateness criterion at a later date.

The MCIT Final Rule was initially published on January 14, 2021, but was delayed by the March 17 Interim Final Rule with Comment Period (IFC) pursuant to the memorandum from the Assistant to the President and Chief of Staff titled “Regulatory Freeze Pending Review” and accompanying guidance from the Office of Management and Budget (OMB). The IFC delayed the effective date to May 15, 2021 with a 30-day public comment period.

CMS noted it had received 215 comments in response to the IFC delaying the effective date, and it described a number of the comments and concerns provided. Ultimately, CMS determined that implementing the MCIT Final Rule by May 15, 2021 was impracticable. It cited multiple reasons for further delaying the effective date, including:

  • The MCIT Final Rule does not require evidence that MCIT devices specifically benefit the Medicare beneficiary population;

  • The MCIT Final Rule takes away tools CMS has to deny coverage when it becomes apparent that a particular device can be harmful to the Medicare Population;

  • The MCIT Final Rule only provides for coverage of MCIT devices and does not provide a clear path for appropriate coding and payment;

  • The MCIT Final Rule did not account for the costs associated with reasonable and necessary services and supplies for use of the breakthrough device, which are required to be covered as part of the MCIT Final Rule, in its regulatory impact analysis;

  • Many commenters expressed concern about codifying the definition of “reasonable and necessary” generally, and including the option of relying on coverage by commercial insurer policies specifically.

CMS stated that it is considering the appropriate next steps in this policy area to promote the best interest of all Medicare stakeholders. The substance of any future regulation is unclear and unpredictable.

If you have any questions on this delay of CMS’s definition for “reasonable and necessary” medical items and services or on the MCIT pathway for breakthrough medical devices, please contact the Hogan Lovells attorney with whom you regularly work, or any of the authors of this alert.

 

Authored by Stuart Langbein, Beth Roberts, Beth Halpern, Samantha Marshall, James Huang, Victoria Wallace, and Boyd Jackson

 

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