Wednesday, March 3, 2021
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CMS Issues Medicare Coverage of Innovative Technology Final Rule

​The Centers for Medicare & Medicaid Services (CMS) issued the Medicare Coverage of Innovative Technology (MCIT) (CMS-3372-F) final rule to provide Medicare beneficiaries with access to the latest medical technology. Under current rules, FDA approval of a device is followed by an administrative process for Medicare coverage, that often lags behind the FDA approval. This causes additional administrative burden for and may delay access to these technologies during the  Medicare coverage determination process. The MCIT rule will eliminate this lag time by creating a new, accelerated Medicare coverage pathway for innovative products that the FDA deems “breakthrough,” and approves on an expedited basis. These devices could include new technologies like implants or gene-based tests to diagnose or treat life-threatening or irreversibly debilitating diseases or conditions like cancer and heart disease.

Under the MCIT rule, Medicare can provide national coverage simultaneously with FDA approval up to a period of four years.  After the coverage period is over, CMS will reevaluate the device based on clinical evidence of improvement in health outcomes among Medicare beneficiaries to determine more permanent coverage. The four-year timeline may incentivize manufacturers of breakthrough devices to develop additional evidence regarding the applicability of their products to the Medicare population to be eligible for continued Medicare coverage beyond the initial four years.

Because the MCIT rule will provide national Medicare coverage for four years, it will override the local coverage determination (LCD) process, providing equal access for seniors regardless of where they live.  Currently, under the local coverage process, 16 Medicare Administrative Contractors (MACs) make Medicare coverage decisions on the local level – 12 for Medicare Parts A and B, and four for Durable Medical Equipment. MACs can cover items or services on a claim-by-claim basis or through a Local Coverage Determination (LCD), which applies only to that MAC’s jurisdiction. In the absence of national Medicare coverage decision for an innovative technology, the technology could be covered in one area of the country but not in another.
In addition, the MCIT final rule will clarify the standard CMS uses to determine whether Medicare should cover items and services. Under federal Medicare law, with relatively few exceptions, the program can only cover items or services that are “reasonable and necessary” for the diagnosis or treatment of illness or injury or improve the functioning of a malformed body member. This final rule will codify CMS’s definition of reasonable and necessary in regulation to give innovators a clearer understanding of CMS standards.
A fact sheet on the final rule is available on the CMS website.
The final rule (CMS-3372-F) can be viewed in the Federal Register.

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