On June 21, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed notice with comment period outlining a transitional Medicare coverage pathway for emerging technologies through the national coverage determination (“NCD”) process in addition to several guidance documents that describe CMS’ approach to coverage reviews and evidence development, including the National Coverage Analysis Evidence Review and Clinical Endpoints Guidance: Knee Osteoarthritis.

The new Transitional Coverage for Emerging Technologies (“TCET”) will allow eligible U.S. Food and Drug Administration (“FDA”) designated breakthrough devices that fall within a Medicare benefit category to obtain transitional national coverage for approximately three to five years. Manufacturer participation in the TCET pathway is voluntary. The TCET pathway will build upon the existing coverage with evidence development (“CED”) policy. Appropriate candidates for the TCET pathway include devices that are FDA-designated Breakthrough Devices; determined to be within a Medicare benefit category; not already the subject of an existing Medicare NCD; and not otherwise excluded from coverage through law or regulation. CMS intends to prioritize innovative medical devices that, as determined by CMS, have the potential to benefit the greatest number of individuals with Medicare.

In sum, through the TCET pathway, CMS may conduct an early evidence review (i.e., Evidence Preview) before FDA decides on marketing authorization for the device and discuss with the manufacturer the best available coverage pathways, depending on the strength of the evidence. Before FDA marketing authorization, CMS may initiate discussions with manufacturers about any evidence gaps for coverage purposes and the types of study designs that could address them. The manufacturer may then propose an Evidence Development Plan (“EDP”), which will be developed by the manufacturer to address any evidence gaps identified in the Evidence Preview. For Breakthrough Devices in the TCET pathway, CMS’ goal is to finalize a TCET NCD within six months after FDA market authorization.

Key Takeaways

• The highly anticipated procedural notice outlining the TCET pathway includes significant changes from previous proposals of a Medicare coverage pathway for emerging technologies. Specifically, the TCET pathway relies heavily on evidence development as a condition of coverage. CMS anticipates accepting up to five TCET candidates annually due to CMS resource constraints.
• CMS states that it will issue additional detailed fit-for-purpose guidance documents and intends to publish a series of guidance documents that review health outcomes and their clinically meaningful differences within priority therapeutic areas. CMS will also soon announce the opening of an NCD pilot that will incorporate aspects of the new evidence development framework outlined in the TCET procedural notice and guidance documents.
• Comments on the notice close on August 28, 2023. The comment period for the additional guidance documents ends August 21, 2023.

Background

Section 1862(a)(1)(A) of the Social Security Act (“the Act”) directs the Medicare program to cover a wide range of items and services that, in general, are reasonable and necessary for the diagnosis or treatment of illness or injury. CMS makes reasonable and necessary coverage decisions through various pathways to facilitate beneficiary access to items and services that meet the statutory standard for coverage. CMS states that it recognizes that new approaches are needed to make decisions on certain new items and services (e.g., medical devices) more quickly to provide expedited access to new and innovative medical technologies. As described in the procedural notice, the TCET pathway provides time-limited coverage for devices with the potential to deliver improved outcomes to the Medicare population but that do not yet meet the reasonable and necessary standard for coverage under section 1862(a)(1)(A) of the Act.

Under the TCET coverage pathway, CMS will coordinate with the FDA and manufacturers of Breakthrough Devices as those devices move through the FDA premarket review processes to ensure timely Medicare coverage decisions following any FDA market authorization. CMS and FDA conduct separate and independent reviews of evidence for emerging medical technologies. FDA and CMS must consider different legal authorities and apply different statutory standards when making marketing authorization and coverage decisions, respectively, for medical devices. In general, FDA makes marketing authorization decisions based on whether the relevant statutory standard for safety and effectiveness is met, while CMS generally issues NCDs based on whether an item or service is reasonable and necessary for the diagnosis or treatment of an illness or injury for individuals in the Medicare population.

Currently, medical devices can obtain Medicare coverage through several pathways, namely claim-by-claim adjudication by the Medicare Administrative Contractors (“MACs”); local coverage determinations (“LCDs”); and NCDs, including the clinical trial policy NCD, CED policy, and the Parallel Review program. CED has been used to support evidence development for certain items and services that are likely to show benefit for the Medicare population. CED has been a pathway whereby, after a CMS and the Agency for Healthcare Research and Quality (“AHRQ”) review, Medicare covers items and services on the condition that they are furnished in the context of approved clinical studies or with the collection of additional clinical data.

In general, CMS relies heavily on health outcomes data, including health outcomes data as it relates to the Medicare population, before proposing an NCD. CMS believes that the TCET pathway can support manufacturers that are interested in working with CMS to generate additional evidence that is appropriate for Medicare beneficiaries and that may demonstrate improved health outcomes in the Medicare population to support more expeditious national Medicare coverage. The TCET pathway would build upon CMS and AHRQ’s ongoing collaboration on the CED process.

In January 2021, CMS finalized a rule that would establish a new national coverage pathway for items and services comprising of new medical technologies. Under this pathway, items and services involving medical technologies would have been eligible to automatically receive up to four years of Medicare coverage. Under the Biden Administration, CMS published in November 2021 a final rule that repealed the January 2021 rule that never became legally effective and thus was not implemented.

Overview of the TCET Pathway

According to CMS, the TCET Pathway supports both improved patient care and innovation by providing a clear, transparent, and consistent coverage process while maintaining robust safeguards for the Medicare population. CMS explains that it is establishing TCET through a procedural notice, rather than rulemaking, since it relies on existing authorities and because it is faster to implement and can be more easily modified as the agency gains experience with the approach.

Under the TCET coverage pathway, CMS will coordinate with FDA and manufacturers of Breakthrough Devices as those devices move through the FDA premarket review processes to ensure timely Medicare coverage decisions following any FDA market authorization. FDA’s Breakthrough Devices Program is only for those medical devices that FDA determines meet the standards for Breakthrough Device designation and for medical devices and device-led combination products that meet certain criteria (in accordance with section 515B of the Food, Drug, and Cosmetic Act).

Medicare coverage under the TCET pathway is limited to certain Breakthrough Devices that receive market authorization for one or more indications for use covered by the Breakthrough Device designation when used according to those indications for use. Manufacturers of FDA-designated Breakthrough Devices that fall within a Medicare benefit category may self-nominate to participate in the TCET pathway.

Overview of Proposed Procedures for the TCET Pathway

Further outlined below, the TCET pathway has three stages: (1) premarket; (2) coverage under the TCET pathway; and (3) transition to post-TCET coverage.

1. Premarket

• TCET Nomination: The timeframe for manufacturers to submit TCET pathway nominations to CMS is approximately 12 months prior to the anticipated FDA decision on a submission, as determined by the manufacturer. Manufacturers should provide information such as a description of the technology and disease or condition the device is intended to diagnose or treat; state of development of the technology; a comprehensive list of peer-reviewed publications that support the nominated Breakthrough Device; and a statement describing how the medical device addresses the health needs of the Medicare population.
• CMS Consideration: CMS will make a preliminary decision to provisionally accept or decline a nomination within 30 business days following confirmation that the nomination has been received.
• Intake Meeting: CMS will offer an initial meeting with the manufacturer to review the nomination (including a description of the device, its intended application, place of service, evidence supporting its use, and the anticipated timeframe for FDA review) within 20 business days.
• Coordination with FDA and Benefit Category Review: CMS will meet with FDA to learn more information about the technology. CMS may initiate a benefit category review if all other pathway criteria have been met. If CMS believes that the device, prior to a decision on its approval or clearance by FDA, is likely to be coverable through one or more benefit categories, the device may be accepted into the TCET pathway.
• Manufacturer Notification: After completing its review of the nomination, CMS will notify the manufacturer by email whether the product is an appropriate candidate for the TCET pathway.
• Evidence Preview and Evidence Preview Meeting: If CMS determines that the product is an appropriate candidate, CMS will initiate an Evidence Preview, which is a systematic literature review that would provide early feedback on the strengths and weaknesses of the publicly available evidence for a specific item or service. CMS anticipates that the Evidence Preview will take approximately 12 weeks to complete. CMS will share the Evidence Preview with the manufacturer and manufacturers will have an opportunity to propose corrections and raise any concerns. For manufacturers who withdraw from the TCET pathway following the completion of an Evidence Preview, there will be no publicly posted tracking sheet and no public notification that an Evidence Preview was completed.
• Manufacturer’s Decision to Continue or Discontinue with the TCET Pathway: If the manufacturer decides to continue, the next step would include a manufacturer’s submission of a formal NCD letter expressing the manufacturer’s desire for CMS to open a TCET NCD analysis.
• Evidence Development Plan: If evidence gaps are identified by CMS and/or AHRQ during the Evidence Preview, the manufacturer should also submit an EDP to CMS that sufficiently addresses the evidence gaps identified in the Evidence Preview. CMS is partnering with AHRQ to consider how to incorporate greater flexibility into the CED paradigm by allowing fit-for-purpose evidence study designs that meet rigorous CMS evidence requirements.
• EDP Submission Timing, Meeting, and Finalization: CMS will have 30 business days to review the proposed EDP, including sharing it with AHRQ, and provide written feedback to the manufacturer. After the initial review, CMS will meet with the manufacturer and, where appropriate, AHRQ. The manufacturer and CMS will have another 60 business days (with potential for extension) to make any adjustments to the EDP.

2. Coverage under the TCET Pathway

• CMS NCD Review and Timing: If a device that is accepted into the TCET pathway receives FDA marketing authorization, CMS will initiate the NCD process by posting a tracking sheet following FDA market authorization (that is, the date the device receives PMA approval; 510(k) clearance; or the granting of a De Novo request) pending a CMS and AHRQ-approved EDP. CMS states that the manufacturer may also request that their device be withdrawn from the TCET pathway at this stage in the process, in which case CMS would not proceed with the NCD review.

The process for Medicare coverage under the TCET pathway would follow the NCD statutory timeframes in section 1862(l) of the Act. CMS would start the process by posting a tracking sheet and elements of the finalized Evidence Preview, specifically the non-proprietary information, which would initiate the start of a 30-day public comment period. Following further CMS review and analysis of public comments, CMS would issue a proposed TCET NCD and EDP within 6 months of opening the NCD. There would be a 30-day public comment period on the proposed TCET NCD and EDP and a final TCET NCD would be due within 90 days of the release of the proposed TCET NCD.

• Request for specific stakeholder input on the evidence base and conditions of coverage: CMS strongly encourages expert input and recommended conditions of coverage (with special attention to appropriate beneficiary safeguards) from relevant specialty societies and patient advocacy organizations. CMS encourages these organizations to publicly post on their website any additional feedback, including relevant practice guidelines, within 90 days of CMS’s opening of the NCD, and to notify CMS when recommendations have been posted.
• Coverage of Similar Devices: To be eligible for coverage under a TCET NCD, devices similar to the specific breakthrough-designated device would be subject to the same coverage conditions, including a requirement to post an EDP.
• Duration of coverage under the TCET pathway: In general, CMS anticipates this transitional coverage period would last for a period of 3 to 5 years as evidence is generated to address evidence gaps identified in the Evidence Preview. However, CMS retains the right to reconsider an NCD at any point in time.

3. Transition to Post-TCET Coverage

• Updated evidence review: CMS intends to conduct an updated evidence review within 6 calendar months of the review date specified in the EDP. CMS will assess whether the evidence is sufficient to reach the reasonable and necessary standard. CMS will also review applicable practice guidelines and consensus statements and consider whether the conditions of coverage remain appropriate. CMS will collaborate with AHRQ and FDA as appropriate.
• NCD Reconsideration: Based upon the updated evidence review and consideration of any applicable practice guidelines, CMS states that it will open an NCD reconsideration by posting a proposed decision, either: (1) an NCD without evidence development requirements; (2) an NCD with continued evidence development requirements; (3) a non-coverage NCD; or (4) permitting local MAC discretion to make a decision under section 1862(a)(1)(A) of the Act.

CMS states that neither an FDA market authorization nor a CMS approval of an EDP guarantees a favorable coverage decision. Standard NCD processes and timelines will continue to apply, and following a 30-day public comment period, CMS will have 60 days to finalize the NCD reconsideration.

As started earlier, comments on CMS’ proposed notice close on August 28. For more information on how the notice could impact your organization, please contact the professionals listed below, or your regular Crowell Health Solutions contact.