CMS repeals rule covering breakthrough devices

The Centers for Medicare and Medicaid (CMS) has repealed the rule requiring coverage of breakthrough devices, in its final rule published November 15, 2021.  As we previously reported, CMS had initially proposed the repeal of this rule in September.  CMS may reconsider coverage of breakthrough devices in future.  In addition, H.R. 4043, currently pending in Congress, would require coverage of such devices.

FDA authorizes marketing of virtual reality device for back pain

On November 16, 2021, the Food & Drug Administration (FDA) authorized marketing of a prescription-use immersive virtual reality (VR) system for reduction of chronic back pain. Called EaseVRx, the VR system includes a prescription device consisting of a VR headset and controller and a breathing amplifier for use in deep breathing exercises, along with a treatment program consisting of 56 VR sessions. The program uses cognitive behavioral therapy to aid in pain relief through relaxation and other techniques. EaseVRx was granted approval through the De Novo premarket review pathway and was designated as a Breakthrough Device.

The FDA evaluated the safety and effectiveness of EaseVRx based on results of a randomized double-blinded clinical trial. Participants using EaseVRx reported greater reduction in pain than a control group using a 2-D program and no serious adverse events were observed.

FDA publishes draft guidance on premarket submissions for software

The Food and Drug Administration (FDA) published draft guidance on the content of premarket submissions for device software functions on November 4, 2021. The guidance is not binding, but represents the FDA's recommendations for what developers should include, so that the FDA can evaluate the safety and effectiveness of device software functions. The FDA will host a webinar to discuss the draft on December 16, 2021 at 1:00 ET. Comments should be submitted on the draft guidance by February 2, 2022. When the guidance is final, it will supersede existing guidance published in May 2005.

The guidance applies both to a device software function that controls or is part of a hardware device (Software in a Medical Device, or SiMD), and software that is used for a medical purpose without being part of a hardware device (Software as a Medical Device, or SaMD). The FDA suggests that basic documentation can be provided for certain premarket submissions, while enhanced documentation will be required when any of the following factors apply:

  • The device is part of a combination product
  • The device is intended to test blood donations or determine blood donor and recipient compatibility
  • The device is a Class III device (higher risk devices that provide life-supporting or life-sustaining functions, or that present potential serious risk of illness or injury)
  • A failure or latent flaw of the device software function could present a probable risk of death or serious injury to a patient, user or others in the environment of use, as assessed prior to implementing risk control measures.

The guidance includes an outline of documentation to be included, examples illustrating which devices would require basic or enhanced documentation, and example architecture design charts.

CMS proposes to repeal mandated Medicare coverage of breakthrough devices

The Centers for Medicare and Medicaid Services (CMS) proposes to repeal the Medicare Coverage of Innovative Technology (MCIT) that was published on January 14, 2021, along with the definition of "reasonable and necessary" published at the same time. The effective date of these rules had previously been delayed to December 15, 2021. The proposal to repeal them will be published in the Federal Register on September 15, 2021.

Under the original MCIT rule, devices designated by the Food and Drug Administration (FDA) as breakthrough devices would be covered under Medicare for four years starting on the date that the FDA authorizes marketing of the device (or a later date if designated by the manufacturer). In proposing to repeal the MCIT rule, CMS notes that it and the FDA operate under different statutes in approving Medicare coverage by CMS, and breakthrough designation by FDA. The standard for Medicare coverage is a determination that a device is reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body part. In making national coverage determinations under this "reasonable and necessary" standard, CMS considers whether the item or service improves health outcomes for Medicare beneficiaries, who are typically older and with more comorbidities than the general population.

Under the FDA's processes for breakthrough designation, a device can be approved for this designation prior to marketing authorization. Under the Breakthrough Devices Program, medical devices and combination products must meet two criteria. First, the device must provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions relative to the current standard of care. Second, the device must satisfy one of four elements:

  • it represents a breakthrough technology;
  • no approved or cleared alternatives exist; 
  • it offers significant advantages over existing approved or cleared alternatives; or 
  • device availability is in the best interest of patients.

CMS expressed concern that since the FDA does not require that Medicare beneficiaries be included in clinical studies required for marketing authorization, evidence that the device is reasonable and necessary for the Medicare population may not exist. Also, the MCIT rule would limit CMS's ability to deny coverage if a particular device is found to be harmful to Medicare beneficiaries; CMS could remove coverage only if the FDA removed marketing authorization or issued a warning letter.

The controversial aspect of the definition of reasonable and necessary published on January 14 was the extension of the appropriateness criteria to commercial insurers. CMS proposes to repeal this rule as well, but invites comment on this aspect. CMS invites comments on how to provide improved access to innovative technologies for Medicare patients. Comments are due within 30 days after the publication of the proposed rule on September 15.

FDA approves marketing of hologram imaging system

The Food and Drug Administration (FDA) has approved the marketing of the HOLOSCOPE-i device developed by Real View Imaging Ltd. The HOLOSCOPE-i generates holograms from 3D data from CT and ultrasound sources. The hologram floats in air at hands reach from the clinician, who can directly interact with the image. It is intended to provide visual information for analysis of surgical options, and the intraoperative display of images. The FDA granted marketing approval based on a clinical study demonstrating substantial equivalence between the HOLOSCOPE-i and an existing legally marketed device, the EchoPixel True 3D Viewer. For the HOLOSCOPE-i, the 3D holographic image is displayed via an optical system, while the EchoPixel uses 3D glasses.

Medicare rules on coverage of innovative technology pushed back

The Centers for Medicare and Medicaid Services (CMS) adopted a final rule on Medicare coverage for innovative technology (MCIT) on January 14, 2021. On March 17, 2021, CMS delayed the effective date of the rule until May 15, 2021 to additional time for public comment.

The MCIT rule established a pathway to Medicare coverage for medical devices designated as breakthrough by the Food and Drug Administration (FDA). However, the rule did not address operational issues, such as how CMS would establish coding and payment levels for breakthrough devices. CMS noted that according to a recent report by the FDA, more than 400 devices have been designated as breakthrough – a much larger volume than anticipated at the time that the proposed rule for MCIT was published. Also, recent expert comments have raised concerns about how breakthrough technology may affect older patients specifically. The additional comment period will provide opportunity for comment on how to assess clinical benefit to the Medicare population.

Australian Health Insurance Cards in Apple Wallet

The Australian Health Industry Claims and Payments Service (HICAPS) now allows healthcare practitioners to accept digital insurance cards stored in the Wallet feature on iPhones or the Apple Watch. Four Australian insurance firms participate in the program. This allows customers to make a health insurance claim by holding their iPhone or Apple Watch near a HICAPS terminal. Real-time notifications about the claim will be sent through the insurer's app. No information about the claim goes to Apple because there is a direct encrypted connection between the user's device and the HICAPS terminal.

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