September 2, 2020

On August 31, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that would allow Medicare beneficiaries to have access to some of the latest, cutting-edge treatments, tests and technologies.  Much of the following comes directly from the CMS news release on the proposed rule.

According to the agency, the proposed rule “represents a step forward that will help demolish the existing bureaucratic barriers that have created a ‘valley of death’ for innovative products, resulting in lag times and lack of access for America’s seniors.”  Department of Health and Human Services (HHS) Secretary Alex Azar added that the new proposal would “give Medicare beneficiaries faster access to the latest lifesaving technologies and provide more support for breakthrough innovations by finally delivering Medicare reimbursement at the same time as FDA approval.”

From Development to Delivery

The proposed rule-making, known technically as the Medicare Coverage of Innovative Technology (MCIT) Proposed Rule, aims to create a new, accelerated Medicare coverage process for innovative products that the FDA deems “breakthrough,” and which the FDA approves on an expedited basis.  The MCIT process 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 proposal, Medicare would provide coverage simultaneously with FDA approval, for a period of four years. After that time, CMS “may reevaluate the device based on clinical and real-world evidence of improvement in health outcomes among Medicare beneficiaries.” The thinking is that this four-year timeline would “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.”

National, Not Local

Significantly, because the MCIT rule would provide national Medicare coverage for four years, it would “streamline identical local coverage decisions (LCDs), promoting equal access for seniors and helping innovators focus on getting their devices to patients and clinicians.”  Under the current LCD process, 16 Medicare Administrative Contractors (MACs) make Medicare coverage decisions on the local level, with each MAC’s decisions applying only to that MAC’s jurisdiction.

Under the proposal, all of that red tape and separate policy-making is eliminated, as potential breakthrough devices are given automatic national coverage for four years, simultaneous with FDA approval—meaning innovators do not need to seek coverage from the individual MACs!

Backburner No Longer

This proposed rule would also allow Medicare to cover eligible breakthrough devices the FDA has already approved for use in 2019 or 2020, giving Medicare beneficiaries “immediate access to these innovative and potentially life-saving devices.”  Additionally, the MCIT proposed rule would clarify the standard CMS uses to determine whether Medicare should cover a product, like a drug, device, or biologic.  As CMS explains, under the Medicare law, the program can only pay for items or services that are “reasonable and necessary” for the Medicare population. If finalized, the MCIT proposal would clarify CMS’ definition of reasonable and necessary in regulation to give innovators a clearer understanding of CMS standards.

In addition to the proposed rule, CMS is also announcing that it has significantly reduced a backlog of requests for National Coverage Determinations (NCDs), some of which have been on a list awaiting approval since 2014.  In 2019, there were 11 NCD applications waiting for CMS review.  By the end of 2020, CMS will have addressed nine of those 11.  One of the remaining two is being handled by local MACs, and the second is undergoing additional clinical trials.

One-Stop Shop

The proposed rule also implements a CMS effort to provide better customer service for innovators seeking Medicare coverage for their products. This will take the form of a coordinated, internal structure that would strive to “harmonize the coverage, coding, and payment processes.”

The agency expects this coordination to more ably assist innovators as they “seek to secure Medicare coverage and payment for their newly FDA-approved products.”  This effort is to include a new pilot project under which “knowledgeable CMS staff will guide innovators through the coverage, coding, and payment processes to cut through confusion and, ultimately, help Medicare deliver critical new technologies to seniors more quickly.”

Action and Analysis

Public comments on the proposed rule will be accepted until November 2, 2020.  For a fact sheet on the proposed rule (CMS-3372-P), please visit: https://www.cms.gov/newsroom/fact-sheets/proposed-medicare-coverage-innovative-technology-cms-3372-p.

It remains to be seen how the MCIT proposed rule will ultimately affect hospitals.  We would expect that the expeditious delivery of breakthrough treatments and technologies on behalf of our older citizens in our nation’s specialty clinics will have the effect of obviating hospital stays in certain circumstances.  If hospital inpatient or outpatient services are required, the facility itself may benefit from having these new technologies on hand for the treatment of their Medicare patients, which may, in turn, lead to more successful outcomes.

It is our privilege to bring you breaking information that might be of benefit to your financial and clinical planning.  If we can help you with other business solutions, please reach out to us at info@miramedgs.com.