CMS Seeks Comments on New Proposed Coverage Pathway for Breakthrough Devices and Guidance on CED and Evidence Reviews

On June 22, 2023, the Centers for Medicare and Medicaid Services (CMS) released a Notice With Comment Period outlining a proposed Transitional Coverage for Emerging Technologies (TCET) pathway under Medicare that would be available for certain devices that the Food and Drug Administration (FDA) has designated as Breakthrough Devices. Comments are due by August 28, 2023. On the same day, CMS issued two guidance documents related to Coverage with Evidence Development (CED) and National Coverage Analysis (NCA) Evidence Reviews, both of which are open for public comment until August 21, 2023. Together, these two sets of developments represent significant changes in CMS’s approach to breakthrough devices and device coverage issues.

An overview of these developments follows below. Stakeholders should carefully review these proposals and consider developing and submitting comments in light of the significant potential implications for Medicare coverage of innovative technologies and other treatments, including medical devices, digital health products, drugs/biologicals, and additional items and services.

Notice With Comment: Transitional Coverage for Emerging Technologies

As discussed in prior alerts,¹ in January 2021 CMS published a final rule to implement a Medicare Coverage of Innovative Technology (MCIT) pathway for coverage of certain devices that FDA had designated as Breakthrough Devices. Following delays in the effective date of that final rule, CMS ultimately repealed the MCIT final rule in November 2021. When it repealed the MCIT final rule, CMS expressed an intent to explore other policy options and to work on refinements and improvements to Medicare coverage processes.

In CMS’s new Notice With Comment Period, which outlines a different proposed Medicare coverage pathway for certain Breakthrough Devices, CMS states that it “has [now] conducted additional opportunities to engage with the public and stakeholders” and has “incorporated that input, along with input gathered in MCIT rulemaking, into [CMS’s] plans to improve the Medicare coverage process when making decisions on emerging technologies at the national level.” Of note, CMS has issued this proposal as a Notice, not as a Notice of Proposed Rulemaking. CMS states its view that “establishing TCET through a procedural notice rather than rulemaking has the advantages that it is faster to implement and can be more easily modified as we gain experience with the approach.” But some industry stakeholders may have concerns about the agency’s proposed procedural approach here for a program that could have a lasting and profound impact on Medicare coverage for the types of emerging technologies addressed in the Notice. As a result, CMS’s choice to propose the TCET pathway through a procedural Notice instead of through a Notice of Proposed Rulemaking, as well as other aspects of the proposal, may be subject to legal challenge, if finalized.

In the Notice, CMS states that the proposed TCET pathway would “leverage the existing [National Coverage Determination (NCD)] pathway, and CED in particular, to provide a streamlined coverage pathway for emerging technologies.” CMS also states that the proposed TCET pathway would “not alter the existing standards for these coverage mechanisms.”

Eligible Products

CMS proposes that products eligible for the TCET pathway would include certain FDA-designated Breakthrough Devices that FDA has authorized for marketing and that CMS has determined to be within a Medicare benefit category. Relevant devices also must not already be the subject of an existing Medicare NCD and not otherwise excluded from coverage through law or regulation. Digital health stakeholders and investors may be frustrated by the proposal because it reflects no relevant provisions or approaches that recognize the distinguishing factors and potential benefits of digital health.

CMS further proposes that manufacturers would self-nominate to participate in the TCET pathway on a voluntary basis.

Stated Goals for the TCET Pathway

CMS states that the proposed TCET pathway “is intended to balance multiple considerations when making coverage determinations,” including:

• “facilitating early, predictable, and safe beneficiary access to new technologies”;
•  “reducing uncertainty about coverage by evaluating early the potential benefits and harms of technologies with innovators”; and
• “encouraging evidence development if notable evidence gaps exist for coverage purposes.”

According to CMS, the proposed TCET pathway “aims to coordinate benefit category determination, coding, and payment reviews and to allow any evidence gaps to be addressed through fit-for-purpose studies.” CMS further states that the agency “is committed to establishing an alternative coverage pathway that better balances the needs of beneficiaries, patient groups, medical professionals and societies, medical device manufacturers, and others involved in developing innovative medical devices.”

The Notice also includes a discussion of CMS’s perspective regarding “differences between FDA and CMS review.” CMS states that “[t]hese two reviews are separate and are conducted independently by the two agencies.” It further states that, “[a]t CMS, we respect the findings of our FDA colleagues and appreciate the expertise they bring to the premarket review process.” However, CMS adds its view that “FDA review of devices does not focus specifically on the Medicare population.”

Proposed Stages and Procedures for the TCET Pathway

As outlined in the Notice, the TCET pathway would include three stages: (1) premarket, (2) coverage under the TCET pathway, and (3) transition to post-TCET coverage. The premarket stage would include several steps, including a manufacturer’s submission of a TCET pathway nomination to CMS, which CMS states should be undertaken “approximately 12 months prior to anticipated FDA decision on a submission as determined by the manufacturer”; CMS consideration of the nomination; an initial intake meeting with CMS and the manufacturer; CMS coordination with FDA “to learn more information about the technology in the nomination”; and a potential benefit category review “if all other pathway criteria have been met.” CMS then would determine whether to accept the nomination and would notify the manufacturer.

For products that CMS accepts into the proposed TCET pathway, CMS proposes that a series of additional premarket stage steps would follow, including (1) an Evidence Preview, (2) an optional Evidence Preview Meeting and an opportunity for the manufacturer to provide feedback on the Evidence Preview, and, (3) if the manufacturer decides to continue with the TCET pathway, an Evidence Development Plan (EDP), which the manufacturer would develop to address any evidence gaps (if any) identified in the Evidence Preview.

For devices that CMS accepts into the TCET pathway and that receive FDA marketing authorization, CMS proposes to then initiate the NCD process, to “follow the NCD statutory timeframes” for that process, and to provide opportunities for public comment.

CMS states that the duration of coverage under the TCET pathway would be tied to the EDP. CMS also states that, in cases where CMS determines that “further evidence development (that is, CED) is the best coverage pathway, CMS will work with manufacturers to reduce the burden on manufacturers, clinicians and patients while maintaining rigorous evidence requirements” and will work to ensure that CMS is “not requiring duplicative or conflicting evidence development with any FDA post-market requirements for the device.” The Notice also references the new proposed CED and Evidence Review guidance documents that CMS issued on the same date as the TCET Notice, which are discussed briefly below.

Industry stakeholders, medtech leaders and innovators, cell and gene therapy manufacturers, and other innovators should consider commenting on this material proposal, including the burdensome timelines and requirements proposed by CMS to successfully navigate the TCET pathway process. Early reviews of the proposed process have articulated serious concerns about what appears to be a cumbersome, lengthy process at odds with the stated purpose of encouraging early access to beneficial products.

Proposed Guidance Document: Coverage With Evidence Development

CMS states that this Proposed Guidance Document addresses the factors CMS considers in making NCDs using the CED pathway. This proposed guidance would revise the initial CED guidance that CMS published in 2006 and subsequently revised in 2014. According to CMS, “[t]his proposed guidance describes the history of CED, its statutory basis [as asserted and described by CMS], and establishes principles for CED studies that are supported by the Agency for Healthcare Research and Quality (AHRQ) under section 1142 of the [Social Security] Act.”

CMS’s issuance of this proposed guidance provides an important comment opportunity for stakeholders who have perspectives on or concerns about the agency’s use of CED and CMS’s asserted basis of authority for CED decisions. For example, a number of stakeholders have expressed concerns about CED decisions that restrict Medicare beneficiaries’ access to FDA-approved diagnostics and treatments. If finalized, the Proposed Guidance Document may be subject to legal challenge.

Proposed Guidance Document: CMS National Coverage Analysis Evidence Review

This additional Proposed Guidance Document outlines CMS’s NCA evidence review process. The proposed guidance discusses the factors and methodological principles that CMS considers when reviewing clinical evidence in the context of NCAs and NCDs. For example, CMS states that, “[w]hen conducting NCAs, CMS generally makes three kinds of assessments: (1) [t]he quality of relevant individual studies; (2) [w]hat conclusions can be drawn from the body of the evidence on the direction and magnitude of the intervention’s potential harms and benefits; and (3) [t]he generalizability of findings from relevant studies to the Medicare beneficiary population.”

CMS states that “each NCD has its unique methodological aspects” but that, “[i]n general, some of the methodological attributes of clinical studies that are associated with strong evidence include the following”: randomization, contemporaneous control groups, prospective (rather than retrospective) studies, larger sample sizes, and masking. CMS also discusses “internal validity” and states that “methodological rigor is needed to support causal inference—that is, the extent to which any difference in the health outcomes of interest in the intervention group versus the control group can be properly attributed to the intervention studied.”

Additionally, CMS discusses certain criteria that the agency generally applies when reviewing evidence, such as risk of bias, precision of estimates, consistency in direction of findings, and external validity.

In this proposed guidance document, as well as the proposed CED guidance document discussed above, CMS states that the agency “is proactively publishing” the proposed guidance “to provide a framework for more predictable and transparent evidence development.” CMS further states that the proposed guidance represents the agency’s “current thinking” and “does not create or confer any rights for or on any person and does not operate to bind CMS or the public.” Both guidance documents also state that, “[w]here warranted by the circumstances, CMS may consider an alternative approach if it satisfies the requirements of the applicable statutes and regulations” and encourages stakeholders to contact the CMS Coverage and Analysis Group if “interested in discussing an alternative approach.”

Stakeholders should carefully review this new proposed guidance and consider its potential implications for Medicare coverage of important diagnostics, therapeutics, procedures, and other services. If finalized, this proposed guidance also could be subject to legal challenge.