CMS cancels plans to expedite Medicare coverage on devices

The CMS has called off plans to create a new regulatory pathway that would have accelerated granting Medicare coverage for medical devices.

The agency withdrew a proposed rulemaking that would have launched the expedited coverage of innovative technology, or EXCITE, from review at the White House's Office of Management and Budget this month. The proposal had languished at the executive branch for nine months.

Details of the new rule's substance or why it was pulled are unclear, and the CMS has not returned requests for comment on the scrapped regulation.

However, medical-device stakeholders believe that the CMS derived the rule from an industry proposal known as PACER, or the Provisional Accelerated Coverage to Encourage research initiative.

Medical-device industry members submitted the PACER proposal to CMS officials in late 2016, and the agency sent the EXCITE rulemaking to the OMB a few months later.

During various meetings with medical-device companies over the past year, CMS officials confirmed that the rulemaking was created to hasten access to medical devices for Medicare beneficiaries, but they could not say how closely EXCITE would have matched the PACER proposal, according to Elizabeth Halpern, a partner at Hogan Lovells who met with both CMS and OMB officials last year about the canceled rulemaking.

The medical-device community has long been frustrated by the sometimes yearslong lag between Food and Drug Administration approval and Medicare coverage.

While FDA approval focuses on safety and efficacy issues with clinical trial evidence, the CMS wants to know how a device will work in seniors before it grants Medicare coverage.

Medicare patients are older and have more co-morbidities than clinical trial patients.

HHS attempted to address industry concerns by launching a voluntary parallel review program between the FDA and CMS in 2011. However, academic and medical-device experts view the program as a disappointment, with only two approvals stemming from the process.

Parallel review did not change actual review standards for either agency; it aimed to cut the timeline between approval and coverage by making the agencies' clinical data expectations clear.

However, a Health Affairs analysis found that the pathway has been hampered by a lack of resources at the CMS.

The Coverage and Analysis Group within the CMS has experienced a lot of turnover, and it has been able to maintain contact with FDA officials to conduct reviews.

Devicemakers have also bristled at the cost of focusing data-collection efforts on seniors when a product may target a broader audience, the analysis found.

"Parallel review was supposed to foster innovation and expand access to medical devices by speeding up the approval and reimbursement process," said Marta Podemska-Mikluch, an assistant professor of economics at Gustavus Adolphus College who has studied the pathway. "This lackluster interest among manufacturers can be attributed to the limitations of parallel review that PACER would have addressed."

Under PACER, the CMS would grant provisional Medicare coverage for an FDA-approved product while the devicemaker gathered additional evidence required by the CMS.

The proposal is "a great way to accelerate the use and study of innovative technologies as they provide funding by way of coverage from Medicare, while collecting high quality data that can tell us about risks and benefits," said Dr. Rita Redberg, a cardiologist at the University of California at San Francisco and former chair of the CMS' Medicare Evidence Development & Coverage Advisory Committee.

Moving forward with PACER would have been a win-win for devicemakers and the CMS since the agency often had to make coverage decisions without sufficient evidence, according to James Chambers, an assistant professor of medicine at Tufts Medical Center in Boston, who has studied Medicare coverage decisions.

A concept like PACER "would have provided an additional opportunity to ensure patients have access to innovative interventions while also ensuring the development of evidence to allow CMS to ultimately judge the appropriateness of covering the product for Medicare beneficiaries," Chambers said.