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.

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