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August 15, 2024 – Last week, the Centers for Medicare & Medicaid Services (CMS) issued a final procedural notice for the new Transitional Coverage for Emerging Technologies (TCET) pathway for certain US Food & Drug Administration (FDA) designated breakthrough devices. For those in the health policy world, this final notice snuck up on us quickly. While Regs & Eggs previously noted that the Spring 2024 Unified Agenda included this final notice with an estimated release date of July 2024, we still were a bit surprised to see it finalized “on time,” as this is a major development in the movement to get new devices approved swiftly.
To discuss why this is such a big deal and what next steps Congress and other stakeholders may take from here, I’m bringing in my colleagues Leigh Feldman, Rachel Stauffer and Deborah Godes.
Let’s start by discussing why stakeholders sought changes to the process CMS uses to make Medicare coverage decisions for products that are already, or may soon be, authorized or approved by the FDA.
There are two key issues: the gap in time between FDA approval or authorization and the effective date of Medicare coverage, and the different evidentiary standards for FDA and CMS decisions.
Under existing coverage pathways, CMS or its contractors can take several years to finalize a national coverage decision (NCD) or a local coverage determination, respectively, after the FDA approves or clears a product. These coverage pathways can be unpredictable for manufacturers and can result in delays in coverage (if granted) for patients and providers.
The evidence necessary for FDA to make an approval or authorization decision sometimes differs from the evidence CMS needs to make a coverage determination, because the statutory standards for each agency’s decisions are different. Generally, FDA authorizes or approves products based on whether the relevant statutory standard for safety and effectiveness is met. In contrast, CMS makes coverage determinations 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. CMS looks to the evidence supporting FDA market authorization and an item or service’s approved or cleared indications for use for evidence generalizable to the Medicare population, as well as data on improvement in health outcomes and durability of those outcomes. If there are no data on those elements in the Medicare population, it is difficult for CMS to make an evidence-based Medicare coverage determination.
The coverage pathway announced in the final TCET notice last week attempts to shorten the gap between the date of FDA approval or authorization and the effective date of a Medicare NCD. It will do so by moving up earlier in the process CMS’s work with manufacturers to assess the available evidence for the item or service. The TCET pathway also involves the creation of a plan for manufacturers to generate the additional evidence necessary for CMS to assess whether the item or service is “reasonable and necessary” for the Medicare population.
Notably, the TCET pathway is only available for certain FDA-designated breakthrough devices that fall within a Medicare benefit category. The pathway’s availability is further limited by CMS resource constraints – CMS anticipates accepting up to five TCET candidates per year. For technologies accepted into and continuing in the TCET pathway, CMS’s goal is to finalize an NCD within six months after FDA market authorization pending a CMS and Agency for Healthcare Research and Quality approved evidence development plan.
We are drafting a detailed +Insight on:
Please contact us if you are interested in the +Insight. In the meantime, check out the CMS fact sheet here.
TCET is the successor to the Medicare Coverage of Innovative Technology (MCIT) pathway that was finalized in January 2021 rulemaking by the previous Administration and repealed in November 2021 by the current Administration. TCET was meant to replace MCIT, but there are key differences between the two pathways. Under MCIT, items and services with FDA breakthrough device designation status would have been eligible to automatically receive up to four years of Medicare coverage, regardless of whether additional evidence beyond that required for FDA market authorization was generated.
With the change in the Administration, CMS reevaluated the MCIT pathway, initially delaying and ultimately repealing the rule in November 2021. CMS cited several concerns that informed its decision, including lack of assurance that FDA review guarantees that a product will improve health outcomes for Medicare beneficiaries, and limited ability to remove coverage for devices that prove ineffective.
When MCIT was repealed in late 2021, a bipartisan group of members of Congress sent a letter to CMS expressing support for MCIT and urging CMS to act quickly regarding any new proposal. Members also introduced the Ensuring Patient Access to Critical Breakthrough Products Act (HR 1691) that largely mirrored the MCIT proposal to provide Medicare coverage for all breakthrough devices and diagnostics for four years. The proposed legislation would task CMS with determining whether the device should receive permanent coverage during those four years. The legislation passed the House Energy and Commerce Committee on June 27, 2024, by a vote of 36 – 5. No further action has been taken, and there is no Senate version. While the bill secured bipartisan support, it was passed before the final TCET notice was issued. It remains to be seen how Congress will react now that we are heading into the home stretch of an election year.
Until next week, this is Jeffrey (and Leigh, Rachel and Deborah) saying, enjoy reading regs with your eggs.
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