By Daniel O. Carroll, Esq.

The Centers for Medicare & Medicaid Services’ (“CMS”) final rule establishing the Medicare Coverage of Innovative Technology (“MCIT”) pathway to Medicare coverage for breakthrough medical devices and related medical procedures (“Final Rule”), which was published on January 14, 2021 and slated to become effective as of March 15, 2021, will not become effective until at least May 15, 2021, in order to allow CMS to consider additional comments and issues of fact, law and policy. This delay is made in accordance with the January 20, 2021 memorandum from Ronald Klain, Assistant to the President and Chief of Staff, entitled “Regulatory Freeze Pending Review”. This delay and request for additional comments now causes uncertainty about whether or not the Final Rule (as published) will actually become effective on May 15, 2021.

The Final Rule is intended to address the current significant delay between the Food and Drug Administration’s (“FDA”) marketing approval for innovative medical devices that are designated as part of the Breakthrough Devices Program and Medicare coverage of the same. The MCIT pathway will provide Medicare coverage for Breakthrough Devices and related medical procedures during a four-year period that begins immediately upon FDA marketing authorization. The Final Rule also codifies the phrase ‘‘reasonable and necessary’’ in order to provide greater certainty for those seeking coverage for Part A and Part B items and services (including FDA designated Breakthrough Devices after the initial four-year period of MCIT coverage).

A medical device is eligible to be designated by the FDA as a “Breakthrough Device” if it (a) provides more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions, and (b) meets at least one of the following: (i) represents breakthrough technology, (ii) no approved or cleared alternatives exist, (iii) offers significant advantages over existing approved or cleared alternatives, or (iv) device availability is in the best interests of patients. Designation as a Breakthrough Device is intended to provide manufacturers with a way to expedite the development and availability of the device in coordination with the FDA.

However, currently, FDA marketing approval does not automatically result in Medicare coverage. Under the MCIT pathway, Medicare coverage can begin immediately on the date of FDA marketing approval for the Breakthrough Device or on a later date designated by the manufacturer. Such coverage is available unless the Breakthrough Device does not have a Medicare benefit category or is otherwise excluded from coverage by statute. The MCIT pathway is voluntary for manufacturers who opt-in. The MCIT coverage expires four years after the date of FDA approval (whether or not the manufacturer requests coverage to begin at a date after the date of FDA approval).

If available, Medicare coverage under the MCIT pathway includes coverage for (a) the Breakthrough Device, (b) any reasonable and necessary procedures to implant and/or use the Breakthrough Device, (c) any reasonable and necessary items and services to maintain the Breakthrough Device, (d) related care and services for the Breakthrough Device, and (e) reasonable and necessary services to treat complications arising from use of the Breakthrough Device. 

Additional comments on the Final Rule are due April 16, 2021, after which CMS will have one month to consider whether to allow the Final Rule should be amended, rescinded, further delayed or allowed to become effective. 

For more information, contact Daniel O. Carroll, Esq. at doc@spsk.com or 973-631-7842.