On August 7, 2024, the Centers for Medicare and Medicaid Services (CMS) issued a final notice outlining the Transitional Coverage for Emerging Technologies (TCET) pathway procedures for coverage under Medicare (the Final Notice). The Final Notice largely finalized CMS’s proposals in the June 22, 2023, Notice with Comment Period, which we discussed in a prior alert, including limiting eligibility of the TCET pathway to certain devices designated by the Food and Drug Administration (FDA) as a “Breakthrough Device.”
However, the Final Notice makes some notable changes, including changing the timeframe for CMS to review nominations to a quarterly basis (instead of having CMS act on nominations within 30 days of submission) and providing an opportunity for manufacturers to begin the nomination process for potentially eligible devices up to two years prior to receiving FDA marketing authorization. The Final Notice was published in the Federal Register on August 12, 2024, and took effect on that date.
In response to comments expressing “that CMS should have issued the proposal as a proposed rule rather than a notice to facilitate meaningful changes and address key issues that hinder beneficiary access,” CMS stated that the agency “do[es] not agree that a proposed rule is required to establish a procedural rule.” CMS also expressed its disagreement with a “commenter’s assertion that CMS does not have statutory authority for [Coverage with Evidence Development].”
Also on August 7, CMS finalized two guidance documents related to Coverage with Evidence Development and National Coverage Analysis Evidence Reviews that it had proposed for comment in June 2023 and released the first of a new series of guidance documents that CMS states will discuss health outcomes and their clinically meaningful differences within certain “priority” therapeutic areas, beginning with its Clinical Endpoints Guidance for Knee Osteoarthritis.
While the Final Notice does signal some progress toward expedited Medicare coverage of certain innovative medical devices, some stakeholders may be disappointed that CMS maintained the TCET pathway’s limitation to certain Breakthrough Devices, declined to expand the maximum number of candidates (five) that it plans to accept into the TCET process each year, finalized the exclusion of digital technologies from TCET eligibility, and continued to assert its expectation that coverage determinations for the majority of Breakthrough-designated diagnostic laboratory tests will be made by Medicare Administrative Contractors (MACs) under existing coverage mechanisms.
An overview of the finalized processes and procedures follows below.
Eligible Products
CMS finalized its proposal to limit eligibility for the TCET pathway to certain FDA-designated Breakthrough Devices that (i) have been authorized for marketing by FDA, (ii) are determined to be within an existing Medicare benefit category, and (iii) are not already the subject of an existing Medicare National Coverage Determination (NCD) or otherwise excluded from coverage through law or regulation.
Though CMS acknowledged that several commenters recommended that the TCET eligibility criteria be expanded to include consideration of devices that may not fall within an existing benefit category, such as certain digital health technologies, CMS declined to revise its original proposal.
Stages and Procedures for the TCET Pathway
Consistent with its proposal, CMS finalized the three stages of the TCET pathway as (1) premarket, (2) coverage under the TCET pathway, and (3) transition to post-TCET coverage. In a slight change from the original proposal, the Final Notice offers a new opportunity for manufacturers to submit a nonbinding letter of intent to nominate a device for TCET pathway approximately 18 to 24 months before the anticipated FDA marketing authorization. CMS stated that this allowance is intended to provide “some flexibility” for nomination timeframes and will improve CMS’s “ability to track potential candidates, coordinate with FDA, and make operational adjustments.”
CMS also finalized its proposal to begin consideration of formal nominations approximately 12 months prior to the anticipated FDA authorization decision. However, in a change from its original proposal, CMS stated that it will review TCET nominations on a quarterly basis instead of acting on nominations within 30 days of submission. CMS stated that this change “will allow CMS to prioritize the most promising devices, will facilitate TCET implementation, and will establish a fair opportunity for eligible devices to be considered, regardless of the timing of FDA market authorization.” CMS further stated that nominations not selected in the first quarterly review will automatically be considered in the subsequent quarter. CMS also stated its intent to issue “proposed prioritization factors for TCET nominations in the near future” to “provide greater transparency, consistency, and predictability.”
If a nomination is accepted, CMS will offer an initial meeting with the manufacturer within 20 business days of receipt of a submitted nomination and may coordinate with FDA to learn more about the nominated technology. Under the Final Notice, a device may be accepted into the TCET pathway if CMS believes it is likely to be payable under one or more benefit categories — but CMS stated that “[t]his is an interim step” and “[a]cceptance into TCET should not be viewed as a final determination that a device fits within a benefit category.”
CMS will review and consider public comment on the proposed NCD for the TCET-accepted device before reaching a final determination on the benefit category determination. As proposed, CMS will engage a contractor to conduct an Evidence Preview that “is intended to inform judgments by CMS and manufacturers about the best available coverage options” and to offer “greater efficiency, predictability and transparency to manufacturers and CMS on the state of evidence and any notable evidence gaps.”
The Evidence Preview will include a summary of the available evidence for a Breakthrough Device, and manufacturers will have an opportunity to correct any errors and provide feedback before finalization. The Evidence Preview will be made available online alongside the posting of a tracking sheet announcing the opening of the NCD. In a change from CMS’s original proposal, however, if a manufacturer withdraws from the TCET pathway, only a more limited evidence summary that omits any evidence gap analyses will be published. Upon finalization of the Evidence Preview, the manufacturer may submit a formal NCD letter requesting that CMS open a TCET NCD analysis.
The Final Notice also implements CMS’s proposed Evidence Development Plan (EDP) concept, which is a plan developed by a manufacturer to address any evidence gaps identified in the Evidence Preview. The duration of TCET coverage will be tied to the EDP, which CMS will review within six months of the review date specified in the EDP. CMS finalized its proposal indicating that EDPs “may include fit-for-purpose (FFP) study designs, including transitional clinical study designs and those that rely on secondary use of real-world data, provided that those study designs follow all applicable CMS guidance documents.” CMS stated that it “expects to propose FFP study guidance in the future, with a particular emphasis on study designs that make secondary use of real-world data.” CMS further stated that it is “closely tracking developments in this emerging field.”
After its updated evidence review, CMS, “when appropriate,” will “open an NCD reconsideration by posting a proposed decision that proposes one of the following outcomes: (1) an NCD without evidence development requirements; (2) an NCD with continued evidence development requirements; (3) a non-coverage NCD; or (4) permitting local MAC discretion” for case-by-case coverage and rescinding the NCD. When posting a proposed NCD reconsideration decision, CMS will solicit public comments under a 30-day notice period, after which “CMS will have 60 days to finalize the NCD reconsideration.”
The Final Notice also addresses potential coverage under the TCET pathway for “similar devices” and “clarifies that follow-on devices will not count against the limit on TCET reviews” of five devices per year.
According to a CMS fact sheet, to be considered for the first quarterly review, nominations will need to be submitted by October 31, 2024, and the deadlines for the next three quarterly review cycles are January 31, 2025, April 30, 2025, and July 31, 2025.
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