This is great news for the Medicare population since it takes years from FDA approval for a medical device to be covered by insurance, and patients generally don’t have the luxury of time.

The proposed rule states that “After the final rule is effective, the Medicare Coverage of Innovative Technology (MCIT) pathway would begin national Medicare coverage on the date of FDA market authorization and would continue for 4 years.” 

In other words, device manufacturers will have 4 years to complete the needed clinical trials with Medicare patients onboard AND covered by CMS after which point they’ll receive a National Coverage Determination (NCD), one or more Local Coverage Determinations (LCD), and claim by claim decisions which are the final decision tree policies for CMS to pay for any procedure.

Background: Before a medical device manufacturer can market and sell their device to customers and before it can be used by patients, it needs to get FDA market authorization. This starts with submitting an application for premarket notification (510(k)), De Novo request, or premarket approval application for the device.) Even before market authorization is granted, companies can apply to the FDA for breakthrough status. Companies will know if they were granted the designation within 60 days. Once confirmed, they will have a much higher engagement from the FDA clinicians and scientists to get this device to market authorization successfully. If you read our post on Elon Musk’s Neuralink, you’ll know they recently received a breakthrough designation to accelerate the path (& feedback loop from the FDA) for the Link to start human trials. However, trials can be costly as companies try to convince CMS to pay for the device or procedure to place/use the device. That is why, based on the October 3, 2019, Trump Executive Order on Protecting and Improving Medicare for Our Nation’s Seniors, CMS was tasked to find a way to cover the cost on the same day of breakthrough designation.

Why is it important? For one, medical device startups won’t need to raise as much funds to complete additional voluntary trials often needed for more risk-averse commercial insurance companies to pay for the product. Sometimes this can be a gap of up to 7 years between approval and coverage. Consequently, there could be a device with significantly fewer complications and/or side effects or significantly superior results that is FDA approved but not covered by Medicare. However, rapidly expediting approval and coverage can have negative impact--namely 

There is good and there is bad to every policy decision. In this case, depending on what is approved, it could go either way--that’s why the criteria for the MCIT pathway needs to be robust and limited to populations who could benefit the most. CMS sort of echoed that and said coverage will be based on what is “reasonable and necessary”.