CMS proposes early coverage pathway for new medical devices

Medicare could soon cover innovative new medical devices while more evidence on their effectiveness and safety is gathered.

Why it matters: The policy, proposed by the Biden administration Thursday, aims to improve Medicare patients' access to new technologies while filling gaps in research on the technologies.

• It takes almost five years on average for new medical devices to get national Medicare coverage, according to a 2022 survey of industry players.

Catch up quick: In the final days of the Trump administration, regulators approved a policy that allowed four years of national Medicare coverage for breakthrough devices and diagnostic products.

• The Biden administration scrapped the rule soon after taking office, noting that FDA-approved devices may not automatically be suitable for Medicare beneficiaries, and saying the devices needed more evaluation than the Trump-era pathway required.

How it works: If the new policy is finalized, manufacturers could nominate devices the Food and Drug Administration views as breakthrough products for short-term coverage.

• Devices accepted will undergo a literature review on strengths and weaknesses of their available evidence.
• Following the review, the manufacturer will make an evidence development plan to fill any gaps and make sure the device meets standards of coverage for the Medicare population.
• The Centers for Medicare and Medicaid Services said it will work with manufacturers to make sure the coverage pathway doesn't duplicate or conflict with requirements the FDA already lays out for post-market surveillance.
• CMS estimates temporary coverage will typically last three to five years, but said timelines will vary based on how long it takes to generate proper evidence for regular coverage.
• When temporary coverage ends, CMS will reconsider the device's status. Regulators at that point can opt to cover the product with or without more evidence, or not to cover the product. They can also defer the decision to local contractors.

The intrigue: Coverage decisions based on future studies to show products' real world effectiveness might ring a bell. CMS's use of conditional coverage for accelerated-approval Alzheimer's drugs has stirred up controversy over the last few years.

Be smart: Device manufacturers have long pushed for a predictable Medicare coverage pathway for innovative products, and communicated with CMS during the rulemaking process.

• Elon Musk's Neuralink brain chip has received breakthrough designation from the FDA.

What they’re saying: “[W]e are pleased that CMS recognizes the need to improve the coverage process for seniors,” Scott Whitaker, president and CEO of the medical device industry trade group AdvaMed, said in a statement to Axios. “We continue to believe that immediate coverage of FDA approved technologies represents the best path forward.”

What we’re watching: House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) said at the Medical Device Manufacturers Association meeting in April that she wanted to see the revamped CMS rule before advancing legislation on the issue.

• Both Democrats and Republicans have pushed the Biden administration to issue a new Medicare coverage policy for breakthrough devices.
• Reps. Suzan DelBene (D-Wash.) and Brad Wenstrup (R-Ohio) reintroduced legislation in March to ensure FDA-designated breakthrough devices automatically get four years of Medicare coverage.

What's next: Stakeholders now have 60 days to comment on the policy.