Tech & Innovation in Healthcare

Find out which medical devices are eligible.

On June 27, 2023, the Centers for Medicare & Medicaid Services (CMS) published their transitional coverage for emerging technologies (TCET) through the national coverage determination (NCD) process notice in the Federal Register. The proposed TCET pathway is geared towards deciding if payers should cover new medical technologies.

Learn about the TCET pathway and how it could expedite medical device development and reimbursement.

Background: In September 2021, CMS repealed the “Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary’” final rule because the agency found the research lacking and wanted more study and regulation over Food and Drug Administration (FDA)-designated breakthrough devices. A little more than a year later in November 2022, CMS released four guidelines for use in future rulemaking, ensuring more safety for beneficiaries, support for manufacturers and clinicians, and better coordination with the FDA on regulatory reform.

Now: Harnessing feedback the agency garnered from the MCIT rule, “the TCET pathway aims to coordinate benefit category determination, coding, and payment reviews and to allow any evidence gaps to be addressed through fit-for-purpose studies,” CMS says in the notice.

Chart the TCET Pathway

The proposed TCET pathway serves as a roadmap for moving new medical technologies from the development lab to the patient, and factors in three considerations along the way:

1. Patient access: The proposed pathway aims to provide patients with access to new medical technologies quickly, safely, and predictably.

2. Clarity: Medical technology developers could have a better understanding of whether payers will cover the devices. Developers can know possible risks and benefits of the technologies earlier in the process.

3. Evidence development: The proposed pathway encourages technology developers to conduct further research if evidence gaps are found.

“The healthcare technology development and approval process takes so long — to go through FDA clearance, then go through the CMS reimbursement process — it ends up being about four to five years. I’m really excited about this expedited pathway to hopefully make the timeline a lot shorter and go down to maybe two years before the technology is getting reimbursed,” says Kaitlyn O’Connor, Esq, partner at Nixon Gwilt Law in Virginia.

Timeline: CMS would accept a device into the TCET pathway once the device receives FDA marketing authorization. The Agency will then initiate the NCD process, and the Medicare coverage process under the TCET pathway would follow established NCD timeframes with the goal of finalizing the TCET NCD within six months. However, this timeframe could be affected if evidence gaps are identified by CMS and the Agency for Healthcare Research and Quality (AHRQ). At that point, an evidence development plan (EDP) will be created and need to be completed by the device manufacturer.

The TCET NCD coverage “will continue only as long as needed to facilitate the timely generation of evidence that can inform patient and clinician decision making,” according to a CMS fact sheet. For devices that require a CMS- and AHRQ-approved EDP, the EDP includes a review date that provides one additional year of coverage once the study is complete. This additional year will allow manufacturers finish the evidence analysis, compile additional reports, and submit their findings to peer-reviewed publication. CMS anticipates the evidence collection, analysis, and submission to last three to five years. Ultimately, the EDP will help “lead to a predictable, long-term Medicare coverage determination,” the agency says.

What Devices are Eligible for the Pathway?

CMS is proposing that the TCET pathway will be available only for medical devices designated as breakthrough devices by the FDA. Also, these devices cannot be already part of an existing NCD and “not otherwise excluded from coverage through law or regulation,” the agency wrote in the notice. CMS does mention that most diagnostic tests designated with breakthrough status should have coverage determined by Medicare Administrative Contractors (MACs) through existing pathways.

The FDA stipulates that select medical devices “that provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions” are eligible for the voluntary Breakthrough Devices Program. The program’s aim is to accelerate the devices’ development, evaluation, and review to ensure healthcare providers and patients can access the devices quicker. While the FDA aspires to reduce the process time for these devices, the agency still requires standards be met to “protect and promote public health.”

The proposed TCET pathway would help improve the timeline and reduce the time between when a manufacturer submits a device to the FDA and when the device is approved for reimbursement.

“For example, a pain management virtual reality (VR) software platform that previously would have had to go through FDA clearance first to be a medical device, and then go through the two-year process with CMS to get reimbursed. Now, that timeline will be collapsed, that process will be collapsed. They would have the ability to go through the FDA process and start the ball rolling on reimbursement at the same time,” says O’Connor.

Know What This Means for Healthcare Practices

Healthcare is slow to adopt new technology and with good reasons. Physicians want to know the devices are safe to use with their patients, and physicians want to know if and how much they’ll be reimbursed for using the technology since it is an investment.

Providers buy the technology to give to their patients, and then the patients’ payers reimburse the practitioners for the cost of the device. Healthcare providers spend money to purchase the device and maintain the device for the patient, but if the practices don’t know how much they’re going to be reimbursed, are they going to foot the bill up front?

“I think providers and technology companies will struggle with that, but people can make public comments on the pathway and the clarity around how much the technology is actually going to get paid,” O’Connor says.

Resource: Review the CMS TCET notice or the fact sheet and submit comments through Aug. 28, 2023.