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CMS Repeals Rule Aimed at Expediting Medicare Coverage for FDA Breakthrough Devices

NEW YORK – The US Centers for Medicare and Medicaid Services announced on Friday that it has repealed a final rule that would have expedited Medicare coverage for certain medical devices, including in vitro diagnostic tests.

The Medicare Coverage of Innovative Technology and Definition of "Reasonable and Necessary" final rule was rescinded because of concerns that its provisions wouldn't properly protect Medicare patients, CMS said in a statement. The repeal is effective Dec. 15, the day when the original rule would have gone live.

The rule, originally proposed in August 2020, would have expedited Medicare coverage for medical devices with breakthrough device designation from the US Food and Drug Administration. Once the device received market authorization, Medicare coverage would have been provided for up to four years under the rule, which was finalized in January but put on hold by the Biden administration, which then proposed canceling it. 

After the initial period of Medicare coverage provided by the original rule, devices could then receive an affirmative national coverage decision (NCD) from CMS, a negative NCD from CMS, or have coverage left to the discretion of Medicare Administrative Contractors through local coverage determinations (LCD) or on a claim-by-claim basis.

The rule was originally proposed to address delays in coverage caused by the NCD and LCD processes, which often take nine to 12 months to finalize. It also was intended to address coverage inconsistencies across geographies due to differences in LCDs. In the proposed rule, CMS said out of the 16 breakthrough devices to have received market authorization, 10 had coverage variabilities.

However, CMS said that the clinical studies needed for FDA authorization "might not consider the differences in clinical profiles, complexities of medical conditions, or associated treatments of the diverse population of Medicare patients."

“Under the rule we are repealing, CMS may have covered devices without adequate evidence to demonstrate that the device would be reasonable and necessary to diagnose or treat the Medicare population for particular medical conditions," Lee Fleisher, CMS chief medical officer, said in a statement.

The agency said it plans to work with the FDA, the US Department of Health and Human Services' Agency for Healthcare Research and Quality, manufacturers, and other stakeholders to "develop an expeditious process to cover innovative devices that benefit Medicare patients." CMS will hold at least two stakeholder meetings in 2022 to address future policies in the space, it added.

CMS noted that the other pathways available for diagnostic tests to receive Medicare coverage, including claim-by-claim determinations and local and national coverage determinations, are still available.

The Advanced Medical Technology Association, which has advocated for the rule and submitted comments to CMS last month arguing against the repeal, said in a statement that the MCIT rule "was truly transformational for Medicare patients and doctors" and that it was disappointed in the repeal.