CMS Proposes to Repeal “Reasonable and Necessary” Device Coverage Track and Regulations | Knowledge


On September 15, 2021, the Centers for Medicare & Medicaid Services (CMS) published a Proposed Rule in the Federal Register which would repeal the Medicare Coverage of Innovative Technology (MCIT) path and the “Reasonable and Necessary” final rule published on January 14, 2020 (Final rule). The final rule has an effective date of December 15, 2021. In its rule proposal proposing to repeal the final rule and seeking comments on this proposal, CMS expresses concerns about the adequacy of the evidence needed to demonstrate that a device subject to the MCIT route is “reasonable and necessary” for the purposes of Medicare coverage as well as operational challenges with “reasonable and necessary” regulations.

Comments on this proposed rule are due by October 15th. In setting the comment deadline, CMS invoked an exception to the Medicare Act, which also requires a 60-day comment period. Medical devices and other stakeholders should consider commenting on this draft rule, including with respect to the proposed repeal of the MCIT path.

Context of the MCIT course

The MCIT route would establish a Medicare coverage route for medical devices designated as breakthroughs by the Food and Drug Administration (FDA). Under the final rule, the MCIT would result in four years of national Medicare coverage of a breakthrough device from the date of FDA market authorization or a date chosen by the manufacturer in both. years that follow. In the proposed repeal, CMS argues that the final rule “is not in the best interests of Medicare beneficiaries because the rule may provide coverage without adequate proof that the revolutionary device would be reasonable and necessary treatment for Medicare patients. who have the particular disease or condition that the device is intended to treat or diagnose. CMS says that “significant concerns persist about the availability of clinical evidence” for these breakthrough devices, particularly with regard to the Medicare population. CMS appears to want to assess the clinical evidence applicable to a given device before determining whether Medicare coverage is appropriate.
For more information on these rules, please see our Sidley updates here, here and here.

New developments

In the proposed new rule, CMS attempts to respond to its change of position by stating that “after further consideration of all public comments” CMS “no longer agrees.[s] that the FDA’s safety and efficacy standards alone are sufficient to support open Medicare coverage. CMS also maintains that “FDA and CMS operate under different statutes which have different purposes”.

In discussing its proposed repeal of the MCIT path, CMS expresses the following concerns:

  • Evidence Development and Patient Safety. CMS says the typical process of determining national Medicare coverage involves a “thorough review” of clinical evidence and its applicability to the Medicare population, which has more comorbidities and may have different outcomes than others. populations. CMS further states in the proposed rule that CMS recognizes that the agency has “changed [its] position, ”but argues that securing coverage under the MCIT path could be problematic if there is no evidence demonstrating a health benefit or addressing specific risks to Medicare beneficiaries.
  • Limits of the MCIT course. CMS expresses concern about certain limitations of the path, stating that “there are many drawbacks to limiting coverage via the MCIT path only to devices that are part of the Breakthrough Devices program.” CMS notes that other non-revolutionary devices could be at a disadvantage and that development could be stifled.

The Final Rule also established regulatory standards for “reasonable and necessary” determinations for items and services provided under Parts A and B of Medicare. Among other considerations, these final rule standards dealt with the use of commercial insurer coverage policies in Medicare determinations. Specifically, CMS said it would consider, in part, coverage to the extent that items or services are covered by a majority of commercial insurers in determining whether an item or service is appropriate for Medicare patients. In the draft rule, CMS recognizes that “challenges” persist in their operationalization when the coverage policies of commercial insurers can be considered. While CMS proposes to repeal the Final Rule in its entirety, including reasonable and necessary settlements, CMS is seeking comments on whether to revoke only the commercial assurance portions of the Final Rule or to consider different criteria in the context of a future codification of the definition of “reasonable and necessary”. The question of the potential codification of standards for “reasonable and necessary” determinations in regulations raises important questions under Azar v. Allina Health Services, 139 S. Ct. 1804 (2019), as CMS and its contractors currently rely on sub-regulatory guidelines to make such decisions.

Despite the proposed repeal, CMS says it recognizes the value of access to innovative and beneficial technologies. Nonetheless, CMS expresses the position in the proposed rule that “there are other ways to achieve our stated objectives”, which “may include better use of existing channels or the development of future rules”. However, CMS does not offer any details or commitments. CMS also states that the agency “is considering future policies and potential rule-making to provide better access to innovative and beneficial technologies”.

CMS recognizes in the rule proposal that under Section 1871 (a) of the Social Security Act, certain rules and other actions affecting Medicare coverage and payment standards generally require a comment period. at least 60 days, barring legal exceptions. CMS invokes the “good cause” exception in this proposed rule, stating that the agency “finds[s] good reason to reduce the public comment period to 30 days with respect to the proposed repeal of the [Final Rule]”, Which would otherwise come into effect on December 15, 2021. Additionally, CMS suggests that it plans to provide only a“ 30-day notice ”before its proposal to repeal the Final Rule, if finalized. , comes into force – so the repeal would take effect before December 15. However, one of the things that the Congressional Review Act requires is that agencies postpone key rules like this one by at least 60 days.

Stakeholders affected by the proposed repeal of this final rule should consider submitting their comments before the October 15 deadline.


Comments are closed.