CMS proposes automatic Medicare Coverage to FDA approved Breakthrough Devices

Medical Devices often have a difficult time entering the US market.

A device which enters the market after getting regulatory approval using the 510(k) pathway faces the conundrum of being based on a predicate. It’s difficult to escape the label after it was touted as the reason why your device was just like the other. While these devices are usually replacements of other devices, with some or another feature which makes the new device more this or that. Nowadays Health Care providers want to see credible proof that the device truly improves on the one being replaced. Preferably the use of the new device results in better patient outcomes and helps the bottom-line of the provider and the payor. Credible proof may be hard to come by, but with limited healthcare budgets and many competitors making similar claims, such proof becomes mandatory…. It becomes imperative to think about how such proof can be obtained, early on the lifecycle of the project. Better to find out early that an uphill battle is awaiting, before a several hundreds of thousands have been spent on development…

Truly novel devices face a different problem. For those types of devices, even if a predicate can be found, very few providers have history of using the device for the indication for which it was approved. Often, such novel devices cannot be charged for under existing CPT codes, making them difficult to “deploy”. The pathway for these devices is therefore extended. Manufacturers will typically apply for a CPT III code, such that when the device gets used, the use of the device and patient outcomes can be recorded. That data can later be used to obtain a CPT I code (and associated reimbursement).

But a CPT III code does not help with payment; payors are often reluctant to pay for such novel procedures. So, manufacturers of those types of devices apply with CMS to be considered for NTAP (New Technology Add-On Payment). Unfortunately, the process takes 2 years and only 30% of the applications submitted are granted the Add-On Payment.

It is therefore really important that CMS proposes to grant NTAP to devices that have been FDA approved through the “Breakthrough” process. Not having to apply and wait for NTAP allows for accelerated market introduction. But it is not easy to get approval using the breakthrough pathway: only 16 devices or technologies have been approved as of today using the breakthrough process.

Only products for which:

  1. a sponsor can demonstrate a reasonable expectation that the device could provide for more effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition identified in the proposed indications for use
  2. at least one of the following four criteria can be demonstrated:
    1. the device represents a breakthrough technology,
    1. no approved or cleared alternative exists
    1. The device offers significant advantages over existing approved or cleared alternatives including the potential, compared to existing approved alternatives, to reduce or eliminate the need for hospitalization, improve patient quality of life, facilitate patients’ ability to manage their own care (such as through self-directed personal assistance) or establish long-term clinical efficiencies
    1. Device availability is in the best interest of patients: whether the proposed device and indications for use provide a specific public health benefit.

A year from the breakthrough pathway’s inception the FDA had received only 100 requests for the breakthrough designation and only 71 of those requests had been accepted. As mentioned, as of today of all the request that have been accepted, only 16 have been approved.

As we mentioned in the beginning, getting a novel Medical Device to market is not an easy task.

That’s why the FDA provides manufacturers the opportunity to obtain payor input on clinical trial design or other plans to obtain clinical evidence.

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