Medical device makers may soon have an easier path to securing health insurance reimbursement for their products, following the notice Thursday of a long-awaited rule by the Centers for Medicare and Medicaid Services.
The program, called Transitional Coverage for Emerging Technologies, would apply to medical products deemed “breakthrough devices” by the Food and Drug Administration. Device makers complain that the process of acquiring Medicare coverage is opaque and complex, creating a “valley of death” between FDA approval and securing coverage from health insurers. The TCET rule is an attempt to make that process more clear.
CMS noted in its announcement that the pathway is voluntary. Participating device makers would get access to CMS officials before FDA market authorization. The officials would review early evidence, help manufacturers design studies that might better address payers’ concerns, and offer guidance on the best existing coverage areas.
The goal is to finalize coverage for the medical device no later than six months after FDA clearance. Then, ideally, the device would generate enough evidence on the market to achieve a longer-term Medicare coverage determination.
“The goal of the TCET pathway is to develop reliable evidence for patients and their physicians to make health care decisions and ensure that people with Medicare receive high-quality care,” the CMS leaders wrote in the announcement.
In 2021, CMS rolled back a Trump-era policy that would have automatically given four years of Medicare coverage to devices granted breakthrough status by the FDA. They repealed the rule because of the different, and typically higher data standard CMS has for approving devices. STAT has found that the FDA’s breakthrough devices program, while meant to benefit patients, has so far shown the biggest gains for device companies.
In a JAMA editorial, CMS officials said they were working on a replacement. Device manufacturers have been eagerly calling for the rule ever since. At a House hearing on medical innovation last month, lawmakers from both sides of the aisle espoused the potential rule. Rep. Suzan DelBene (D-Wash.) drew attention to the device companies in her state and to her bipartisan bill. Joshua Makower, the founder of Stanford Byers Center for Biodesign, said an easier path to reimbursement is critical in funding and sustaining innovation.
“When [aspiring innovators] understand how difficult it is and how unlikely it is for them to be successful, they look elsewhere,” Makower said.
Thursday’s announcement about the rule does not explicitly make getting Medicare coverage easier. Its clearest impact seems to be accelerating the coverage determination process, and making it more transparent. The public will have 60 days to comment on the proposed pathway. CMS also intends to release more details and documents about the program.
Scott Whittaker, CEO of device lobby AdvaMed, told STAT the organization is looking forward to reviewing the draft rule.
“We continue to believe that immediate coverage of FDA approved technologies represents the best path forward to ensure seniors receive the benefits they need and America’s medtech companies continue to lead the world in medical innovation,” Whittaker wrote.
This story has been updated to include a comment from AdvaMed.