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CLSA in InsideHealthPolicy: Device Makers Praise Bipartisan Device Coverage Bill, But Issues Remain

By David Roza | InsideHealthPolicy
June 14, 2018

The medical device lobby praised a newly introduced bipartisan House bill that would require CMS automatically cover for three years breakthrough devices approved through FDA’s expedited review pathway, but an industry lawyer said lingering questions could cause some manufacturers to be wary of the new process were the bill to be passed unchanged. The lawyer said it is unclear whether manufacturers would need to apply for the bill’s transitional coverage, what data CMS would require for a final national coverage determination; and specifically how reimbursement levels would be set for the new technology during the transitional period.

“There are numerous manufacturers that don’t want to gamble on an unfair national coverage determination, so they might stay away from that process or wait a long time,” said Robert Wanerman, a member of the Health Care and Life Sciences practice at Epstein Becker Green. “If you get into this program and get Medicare coverage [for three years] it’s great, but what happens at the end of that period? At the end, CMS could still make a negative national coverage determination.”

The Ensuring Patient Access to Critical Breakthrough Products Act, introduced on June 5 by Rep. Suzan DelBene (D-WA), who sits on Ways & Means, would require Medicare to cover all breakthrough products approved through FDA’s expedited review process for three years and make a permanent coverage determination on those products at the end of the three years.

The bill was referred on June 5 to both the Ways & Means and Energy & Commerce committees for consideration of provisions under their respective jurisdictions. The bill is cosponsored by Reps. Terri Sewell (D-AL), a member of W&M health subcommittee; Jackie Walorski (R-IN), also on W&M; Gus Bilirakis (R-FL), member of the E&C health subcommittee; and Tony Cárdenas (D-CA), also on E&C.

Leading medical device industry groups told lawmakers during a closed-door meeting in April that the industry’s future depends on Congress overhauling CMS’ coverage process for breakthrough devices. As FDA clears the way for easier approval of these devices, CMS also must reform its policies to avert a chilling effect on innovation, the lobbyists said, according to briefing material obtained by Inside Health Policy. One top consulting firm calculated it currently takes three years post-FDA approval to get a product covered and reimbursed by CMS. The Advanced Medical Technology Association (AdvaMed) has advocated a number of fixes, including an approach similar to that in the bipartisan House bill whereby breakthrough devices upon FDA approval or clearance would immediately be covered and payed for by CMS.

AdvaMed praised the new bipartisan House bill, in particular a section that would raise the reimbursement levels included in Medicare’s New Technology Add-on Payment (NTAP) program by 30 percent. The program allows for health care providers to recoup some of the added cost of using new technology.

“Taken together, the breakthrough policy proposal and NTAP reforms would both stimulate development of important new devices and diagnostics and assure more rapid availability of those treatment options to patients,” AdvaMed president and CEO Scott Whitaker said in a statement.

Sara Radcliffe, the president and CEO of California Life Sciences Association (CLSA), also praised the bill. “Currently, many FDA-approved medical technologies experience a considerable multi-year delay in receiving coverage and payment determinations from [CMS], creating access issues for patients in need,” she said in a statement. “This bill is a common-sense solution to minimize any delays in patient access to products that have been determined by FDA to be innovative, breakthrough technologies.”

Though AdvaMed, CLSA and DelBene referred to a multi-year delay in breakthrough devices receiving coverage from CMS, Wanerman said it was unclear exactly which part of the coverage determination process the stakeholders were referring to. He said CMS follows a timetable on National Coverage Determinations (NCDs) established in 2013 where, once CMS accepts a request for a new NCD or to review an existing NCD, it takes nine months or so to publish a final determination, “which is fairly nimble,” he said.

The lawyer said the press releases likely refer either to the length of time before CMS accepts an NCD request, or to the length of time it takes for Medicare to make non-national coverage decisions.

Wanerman said the bipartisan bill is a step forward for device makers but still leaves some key issues unclear.

For example, he said it is unclear whether manufacturers would have to ask CMS to enter the bill’s transitional coverage period or whether CMS would take the initiative on starting the process.

“Reading that part, I’m not sure if this is something CMS does on their own initiative or if the manufacturer has to ask for it,” Wanerman said. “That’s not clear in the bill and that’s an important consideration for manufacturers.”

Wanerman also said it is uncertain what type of data CMS would look for in making its coverage determination. While the bill does call for new medical services or technology to meet criteria such as reducing hospital stays, improving patient quality of life, or decreasing pain, bleeding or other symptoms, the lawyer said the exact requirements for meeting those criteria remain unknown.

“CMS is going to be looking for evidence of improved outcomes,” he said. “But then is it a question of improved outcomes or improved outcomes over what timeframe? That’s not specified here.”

Wanerman also said manufacturers would have to show particularly good outcomes with older patients in order to win coverage from Medicare. “If you don’t have great numbers with the Medicare population, like over 65, there’s a real risk there and lots of manufacturers know that,” he said. “Some manufacturers might think this is very nice, but they’re still gambling and they would rather go a more traditional route.”

Also unclear is specifically how CMS would determine reimbursement rates during the transitional period, Wanerman added. While the bill outlines potential additional payments for breakthrough devices, such as the NTAP program, Wanerman said the bill leaves the question of reimbursement levels otherwise unspecified.

Wanerman said many of these questions could be resolved through the rulemaking process. Despite the uncertainties, he said the bill still provides an exciting incentive for manufacturers.

“Some manufacturers are so eager to get to market they’re willing to be the leader whether they succeed or fail,” he explained. “This gives you some protection for three years, whereas under the current process you’ve got no protection.”

Two days after the DelBene introduced the bill, HHS Secretary Alex Azar met with representatives of large medical device manufacturing companies to discuss methods for reducing obstacles to financing and marketing new medical devices. Specifically, the secretary heard from AdvaMed, Abiomed Inc. and other companies and associations about their experiences securing reimbursement from Medicare and Medicaid and approval from FDA.

In a statement, Azar said the gathering was part of ongoing efforts by both himself and President Donald Trump “to break down barriers to innovation.”

Though Commissioner Gottlieb has made streamlining pathways to approving new products a priority at his agency, FDA spokespeople said the agency generally does not comment publicly on proposed or pending legislation. — David Roza