NEW YORK – Officials at the Centers for Medicare and Medicaid Services (CMS) have indicated the agency is working toward a more streamlined pathway to coverage for certain emerging medical device technologies.
Some observers suggest, however, that the new pathway, known as Transitional Coverage for Emerging Technologies (TCET), may prove less impactful for device developers than the proposed rule — the Medicare Coverage of Innovative Technology (MCIT) rule — it is intended to replace.
Originally proposed in August 2020, MCIT aimed to speed Medicare coverage of medical devices with US Food and Drug Administration breakthrough designation by requiring that Medicare automatically cover such devices for up to four years once they received market authorization from the FDA.
The MCIT rule was repealed in November 2021 largely due to concerns that it did not do enough to ensure that devices authorized by the FDA were appropriate and effective for the Medicare patient population.
At the beginning of 2022, the Biden Administration said it planned to revisit the issue through the proposed TCET program. CMS held "listening sessions" in February and March to collect stakeholder feedback about the program and indicated that it would present details on it in the fall of 2022.
In an editorial published last week in JAMA Internal Medicine, Jonathan Blum, principal deputy administrator and chief operating officer at CMS, and Lee Fleisher, chief medical officer and director of the Center for Clinical Standards and Quality at CMS, sketched an outline of TCET, which they described as a new agency rule "being developed" to expedite review of innovative medical devices.
Scott Whitaker, president and CEO of medical technology organization AdvaMed, which was a proponent of MCIT and has advocated for TCET, said that based on "the intelligence we are hearing now," he expects CMS likely won't present its plans for the rule until sometime next year.
Mark McClellan, director of the Duke-Margolis Center for Health Policy at Duke University and a former CMS administrator and FDA commissioner, likewise said he thought CMS would probably offer details on the proposed program in early 2023, but he added that the JAMA editorial from Fleisher and Blum indicated the agency continued to support the idea.
"I don't think you'd see such a clear statement of commitment to the program from senior leaders unless they were quite confident that this is going forward," he said.
What, exactly, TCET consists of and how impactful it could be for device developers remains to be seen, however.
According to an analysis shared by reimbursement expert and consultant Bruce Quinn in August at the Next Generation Dx Summit in Washington, D.C., by guaranteeing Medicare coverage for breakthrough devices authorized by the FDA, the MCIT program had the potential to significantly incentivize investment in these devices. He presented the hypothetical case of a test that under the existing CMS reimbursement system would be worth $15 million to investors over a five-year window covering clinical trial work and initial commercialization. He projected that under MCIT, the same test would be worth around $36 million over that same period.
"If the cost of developing the product was $20 million, and the investor thought it was worth … $15 million, they would never do it," he said. "It would just be canceled. But if the product was thought to be worth $36 million, then you would invest $20 million and go forward."
TCET may not include a similar automatic coverage mechanism, though.
In the JAMA article, Fleisher and Blum laid out a list of principles that they said the CMS rule currently under development would meet. That list didn't include automatic coverage for breakthrough devices authorized for marketing by the FDA as provided for by MCIT.
"It doesn't feel like that is where CMS is at now," Whitaker said, though he said that AdvaMed feels such a provision is "right and appropriate. … We'll have to wait and see."
The principles laid out in the JAMA article included enabling CMS to conduct evidence review of devices before they receive FDA market authorization; allowing CMS to, if a manufacturer requests, start coverage review of a device before FDA market authorization; and exploring how the agency could "reduce the burden on manufacturers, clinicians, and patients while maintaining rigorous evidence requirements" in cases where it decides additional evidence is needed.
In an email to 360Dx, Quinn said that based on CMS's actions thus far, he didn't "expect much" from TCET. He added that the list of principles detailed in the JAMA article didn't appear to add anything to the CMS coverage process that isn't already available through the agency's Parallel Review program, which allows the FDA and CMS to review device submissions simultaneously.
Whitaker said that even if TCET doesn't include an automatic coverage mechanism like that in MCIT, it could still prove helpful to device manufacturers if it provides more clarity around the coverage determination process.
"If you are not going to cover [devices] based on FDA approval, then give us clarity around what we need to do from that point to get coverage so we can do that process," he said. "It can't be opaque, and it can't change from product to product. It needs to be clear and consistent."
Greater transparency around the CMS coverage process is perhaps the most important thing that could come out of the TCET rulemaking process, McClellan said.
"The key word you keep hearing from industry is 'predictability,'" he said. "There are different places reasonable people might come out on what is needed for coverage and by what process, but if you know what [the process] is, that helps."
He noted that having the opportunity to receive early input from CMS and other stakeholders like providers and other payors "makes a difference in how you design your studies and how you plan ahead."
McClellan said that while device developers are able to meet with CMS prior to putting their products on the market, and that he encourages them to do so, the coverage decision process can still be somewhat opaque, especially for smaller firms without the resources to hire large teams focused on reimbursement.
He added that CMS might not be adequately staffed to handle extensive early and ongoing interactions with devices manufacturers.
"At Duke-Margolis, we've suggested that additional appropriations for CMS to staff this kind of effort would be helpful to make sure we can get to efficient decisions," he said.
AdvaMed's Whitaker said his organization also believes CMS needs more resources for this task but added that "they have to ask for it. You don't get funding if you don't ask."
He pointed to the example of the FDA, which he said has, from the perspective of the device industry in any case, significantly improved its processes and communication over the least two decades.
"If you went back 15, 20 years ago and asked small, midsized companies, what is the biggest hurdle in getting a new innovation to market, they would have said FDA is the problem," he said. "If you asked those same companies today, they would say that FDA isn't the problem, CMS is the problem."
Whitaker said the funding provided to the FDA through the user fee program, which went into effect in 2002, has allowed the agency to hire the staff it needed to do better work, including improving its interactions with industry.
"CMS has the same challenge, but they have to ask for money," he said.
Whitaker also said that the FDA user fee legislation includes provisions that establish performance and decision timeline guidelines and hiring targets for the agency.
"As a result … there are quite clear guidelines, timelines, mile markers, if you will, along the way, that help a company navigate the [FDA] process better," he said.
He suggested that while CMS didn't necessarily need a similar user fee-based system, "if there was a way for [industry[ to help support [the agency], we would. But they are going to have to ask Congress for it and make the case, and we would be more than happy to help support that."
McClellan said that while he would like to see "a close look at some additional resources that could help CMS execute a program like [TCET] effectively," he didn't think something on the scale of the FDA user fee program was needed, at least not initially.
"I think another, say, $10 million to $20 million a year for something like this would go a long way," he said. "The advantage of an approach that doesn't go all the way to user fees is that it could potentially be implemented more quickly with less administrative burden and could provide some evidence on just how much of a difference this program can make and how widely it's needed."