CMS Proposes Cancelling Automatic Medicare Coverage for Breakthrough Devices

King & Spalding

On September 15, 2021, CMS published a proposed rule to repeal a final rule that would have allowed Medicare to automatically cover certain medical devices as soon as they receive FDA approval (the Proposed Rule). The final rule, entitled “Medicare Program: Medicare Coverage of Innovative Technology (MCIT) and Definition of ‘Reasonable and Necessary’” (the MCIT Final Rule) was originally published in the Federal Register in January 2021. Although the MCIT Final Rule was set to take effect on March 15, 2021, CMS issued a series of extensions, which culminated in last week’s Proposed Rule to repeal the MCIT Final Rule altogether. Comments on the Proposed Rule are due by October 15, 2021.

As discussed in further detail in a King & Spalding Client Alert published on March 26, 2021, the MCIT Final Rule would have granted four years of Medicare coverage for certain medical devices designated by the FDA as breakthrough devices beginning immediately upon FDA market authorization. In addition, the MCIT Final Rule would have codified a regulatory definition of “reasonable and necessary” under section 1862(a)(1)(A) of the Social Security Act for all items and services furnished under Medicare Parts A and B. Notably, the definition would have codified regulatory language giving CMS authority to review and consider commercial insurance coverage policies in certain circumstances.

In the Proposed Rule, CMS explains that “[w]e believe that the finalized [MCIT Final Rule] is not in the best interest of Medicare beneficiaries because the rule may provide coverage without adequate evidence that the Breakthrough Device would be a reasonable and necessary treatment for the Medicare patients[.]” As for the section of the MCIT Final Rule that would codify the “reasonable and necessary” definition, CMS notes that “[e]xpanding the reasonable and necessary definition to systematically consider commercial insurer coverage presents implementation and appeals process challenges that would likely persist.” However, CMS is requesting comments on whether it should repeal only the commercial insurance aspects of the “reasonable and necessary” definition while leaving the remainder of the definition in place.

The Proposed Rule is available here. For a copy of the MCIT Final Rule, please click here.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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