I’ve said it before and I’ll say it again, pushing for medtech innovation without determining how companies will be reimbursed for it will result in a lack of truly novel products. Sure, companies are going to put out better products, but those will ultimately be few and far between in a sea of “me too” offerings.

In an ideal world, new devices would be invented and released to the population for the betterment of mankind. Unfortunately, that scenario is a pipe-dream; these companies require a financial “reward” for their hard work to ensure the creative process continues and substantially improved iterations are unveiled.

Round 1 of this ongoing coverage harkens back to October 2021 when CMS balked at the idea of tying automatic reimbursement to the FDA’s breakthrough device designation. That aspect of the plan was dropped and a new plan was to be put into place. Of course, as expected, that portion of things has taken far too long.

Round 2 occurred just earlier this year when a bill was put forth to restore the reimbursement for breakthrough devices for the originally planned four-year period. The “Ensuring Patient Access to Critical Breakthrough Products Act of 2023” seems to have stalled somewhat (a comments period was announced in July), and there hasn’t been much of an update on it since my Editor’s Letter from May.

Now we have Round 3 with a new plan being proposed. The “Transitional Coverage for Emerging Technologies” (TCET) offering is a slightly watered down version of the original plan. The reimbursement period is not immediate and works off the Medicare model for coverage determination. Whether that’s enough of a monetary “reward” for device manufacturers remains to be seen.

Perhaps the closest thing we have to an industry “reaction” to the TCET plan is statements made by the Medical Device Manufacturers Association (MDMA) during a CMS public stakeholder call concerning the proposal. The comments were made by Dan Waldmann, EVP, Health Policy and Reimbursement, at MDMA.

While recognizing CMS’ effort to implement reforms to enhance pathways already in place to handle the increase breakthrough device designation products would bring, it’s clear he doesn’t think the agency’s plan is enough. Waldmann said, “We are concerned about the limited number of devices CMS projects will be accepted into the accelerated CED [Coverage with Evidence Development] program. The proposal reflects how CED should work for any product that is only eligible for coverage under the agency’s CED authority, as compared to its general authority to cover devices that are ‘reasonable and necessary.’”

Waldmann expanded on those comments: “Unfortunately, being limited solely to an accelerated CED program, the current proposal represents a missed opportunity to meaningfully accelerate access and foster innovation. While developing its TCET proposal, CMS officials have frequently used a graphic to illustrate the Medicare coverage process, which divides items and services to three categories—those that clearly meet the reasonable and necessary criteria under general conditions of use and are therefore appropriate subjects for a national coverage determination; those that are promising, but for which there are gaps in evidence relevant to the Medicare population that are significant enough that it does not meet the ‘reasonable and necessary’ standard, and thus can only be covered under CED; and, finally, those that are reasonable and necessary, but for which there is ‘limited context,’ meaning that additional data from real world use of the technology is needed to formulate a long-term national coverage policy. CMS currently defers coverage decision making on items and services in this latter category to its local Medicare Administrative Contractors…”

Essentially, unless the product is deemed “reasonable and necessary,” it would not meet the bar set by CMS to gain immediate coverage. Let me remind you of the types of product to which we are referring. By granting the breakthrough designation to a device, the FDA has already deemed the device to have met one of four criteria: represents breakthrough technology, no approved or cleared alternatives exist, offers significant advantages over existing approved or cleared alternatives, or device availability is in the best interest of patients.

To me, there is a distinct difference between the measure of CMS versus that of FDA. Will companies seek out to develop truly innovative solutions if that product is going to require real-world evidence to support a reimbursement plan? How long and how much evidence will be required? How will smaller and startup companies remain afloat during this period?

Everyone wants innovative medical devices to help save lives; now we need to be sure they are going to be paid for in a timely manner to ensure companies are willing to take the risk. 

Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com