CMS Plots to Increase Breakthrough Device Payments

Regulatory NewsRegulatory News | 24 April 2019 |  By 

The Centers for Medicare and Medicaid Services (CMS) late Tuesday proposed a new rule that would increase payments for medical devices designated by the US Food and Drug Administration (FDA) as breakthrough devices.

CMS explains how at the time of approval for these devices with a breakthrough designation, real-world data on outcomes in different patient populations is often limited. So, it can be challenging for device firms to meet the requirement for demonstrating a “substantial clinical improvement” in order to qualify for new technology add-on payments.

Therefore, CMS proposes to waive for two years the requirement for evidence that these devices represent a “substantial clinical improvement.”

“Waiving this requirement would provide additional Medicare payment for the technologies for a period of time while real-world evidence is emerging, so Medicare beneficiaries do not have to wait for access to the latest innovations,” CMS said.

In addition, CMS proposes increasing the add-on payment beginning in FY 2020 from 50% to 65%.

Device industry group AdvaMed praised the CMS moves, saying: “We are pleased that this rule reflects several of AdvaMed’s priorities, including increasing funding for new technology add-on payments (NTAP), and making it easier for breakthrough technologies to access the Medicare program. This will help ensure that hospitals and patients have access to breakthrough innovations and care, and further incentivize transformational technologies.”

As far as the overall impact of the new payments to CMS, the agency said it could not quantify the costs.

“Given the relatively recent introduction of FDA’s Breakthrough Devices Program, there have not been any medical devices that were part of the Breakthrough Devices Program and received FDA marketing authorization and for which the applicant applied for a new technology add-on payment under the IPPS and was not approved. Therefore, it is not possible to quantify the impact of this proposal,” the proposal says.

Device companies have also called on FDA recently to be more transparent about the number of devices that have been granted a breakthrough designation so that they can further understand if a candidate device would qualify for the designation. Former FDA Commissioner Scott Gottlieb said last December that 110 devices had received a breakthrough device designation, and eight have received marketing authorization.

In addition to the proposal related to breakthrough devices, CMS also took steps to deal with unique challenges associated with paying for CAR-T treatments, including Novartis’ Kymriah (tisagenlecleucel) and Gilead’s Yescarta (axicabtagene ciloleucel). 

“The agency is considering several changes to payment policies for CAR-T for 2020, including additional changes to new technology add-on payments for CAR-T and changes to the formula that is used to calculate payments to hospitals for CAR-T,” CMS said.

Proposed Rule


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