Study: Novel devices face lengthy path from authorization to Medicare coverage

The median time from marketing authorization to coverage under the Medicare program is nearly six years for novel medical diagnostics and devices, according to a cross-sectional study from researchers at Stanford University.

“The time required to establish at least nominal coverage results in uneven beneficiary availability and stretches longer than the time to average [Food and Drug Administration] authorization. These data highlight the need for establishment of a more efficient and timely reimbursement process for novel FDA-authorized medical devices and diagnostics,” Josh Makower, MD, of Stanford University, and colleagues wrote in JAMA Health Forum.

The researchers analyzed new device and diagnostic product applications authorized by the FDA through the premarket approval pathway, the de novo pathway, or with breakthrough designation in the 510(k) pathway from 2016 through 2019 to identify novel technologies and determine how long it takes for technologies without an established reimbursement pathway to achieve at least nominal coverage under the Medicare program. (RELATED: CMS Finalizes Path to Boost Reimbursement for Breakthrough Devices, Regulatory Focus 6 August 2019)

Overall, they identified 64 novel device and diagnostic technologies that were approved during the four-year study period. Of these, just 28 technologies (44%) successfully achieved either explicit coverage through a national or local coverage determination or implicit coverage through alignment with a billing code.

The time from FDA approval to at least nominal Medicare coverage ranged from 91 days to 7 years, with a median time to coverage of 5.7 years.

The researchers also explored how the strength of clinical evidence, type of technology, and the size of the commercial manufacturer impacted the time to Medicare coverage authorization. While the probability of coverage did not differ significantly based on the strength of clinical evidence, researchers found that technology type was a significant factor, with diagnostic assays reaching nominal coverage more quickly than other device types.

Manufacturer size was also a significant factor in achieving coverage. For instance, the five-year coverage probability was 19.4% for small manufacturers versus 67.9% for large manufacturers. The finding “suggests a disproportionate burden for small manufacturers,” Makower and coauthors wrote.

Both FDA and the Centers for Medicare and Medicaid Services (CMS) have established acceleration programs to try to shorten the timeline to coverage authorization for novel technologies, but the researchers noted that reviews of these programs suggest they are not meeting their intended goals, in part due to low utilization and lack of clarity.

“The results of this study suggest there is a need for a dedicated pathway that closes the substantial coverage gap demonstrated herein and provides a process for early communication between CMS and manufacturers that informs evidence development resulting in final coverage determinations,” the researchers wrote.

Several of the study authors reported financial relationships with a variety of medtech companies.

JAMA Health Forum

Study: Novel devices face lengthy path from authorization to Medicare coverage

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