CMS Ending Automatic Coverage for “Breakthrough Devices”? Really?!

CMS wants to stop automatically paying for medical devices that have been designated as a “Breakthrough Device” by the FDA.

Under current rules, FDA designation automatically brings Medicare coverage for the device. Receiving the “breakthrough” designation is a big two-fer: 1) the FDA declares your device worthy of special treatment and, 2) Medicare coverage for up to four years beginning as early as the date of the FDA’s market authorization.

The final payment rule requiring coverage came on January 14, 2021, the very end of the Trump Administration. The new administration ordered a review of all federal rules that were passed in the last days of the Trump Administration, but, had not yet been finalized.

“Breakthrough” V “Reasonable” and “Necessary”

After the review, CMS decided that automatically paying for devices designated by the FDA as “breakthrough” didn’t necessarily jive with their requirement of “reasonable” and “necessary.” In March, CMS delayed the effective date of the rule and opened a new comment period. The effective date was later delayed to December 15, 2021.

A breakthrough device, noted the agency, may only be beneficial for a specific subset of the Medicare population, or when used by clinicians with specific training. As a result, writes Robert Wanerman of the law firm Epstein Becker & Green, P.C. in the September issue of the National Law Review, “without sufficient evidence to clarify when those breakthrough devices will result in good outcomes for Medicare beneficiaries, CMS would lack the evidence that it needs to determine if the device is reasonable and necessary.

No Focus on Medicare Population

Wanerman added the agency pointed out that under the FDA’s criteria, “a manufacturer is not required to present data regarding the use of that device in the Medicare population in order to obtain approval or clearance, and that the relevant data might never be collected. CMS was not convinced that voluntary evidence development by manufacturers would be sufficient to enable it to make final coverage determinations.”

CMS had a related concern that if Medicare coverage for a breakthrough device was guaranteed based on the FDA’s designation and marketing authorization, providers and suppliers would have an incentive to use or prescribe that device instead of alternatives that may be more beneficial to their patients. “This,” wrote Wanerman, “could result in the breakthrough device becoming a standard of care, crowding out alternative treatments without regard to outcomes, and give the first-to-market product an unfair economic advantage that could suppress competition and innovation.”

The agency was careful to note that it would not bar Medicare coverage for breakthrough devices, and that its existing pathways for coverage would still apply.

Speak Up

This is a big deal. Over the past year we have seen many company announcements touting their breakthrough device and accompanying Medicare coverage. This was a shot of adrenalin for new devices making their way through regulatory hurdles and into the marketplace.

CMS wants to hear from you about this, but the comment period was only open until October 15, 2021. If you want to comment electronically refer to file code CMS–3372–P2 at http://www.regulations.gov. Follow the ‘‘Submit a comment’’ instructions.