CMS Proposes Policy Changes to Increase Med-Tech Pricing Transparency

The Centers for Medicare and Medicaid Services (CMS) is working with the U.S. Food and Drug Administration (FDA) to streamline access to novel medical technologies for Medicare beneficiaries. CMS also plans to update payment and coding for medical devices, according to today’s announcement.

At the Medical Device Manufacturers Association annual meeting today, CMS Administrator Seema Verma rolled out the agency’s strategy to improve access to new technologies. The move expands upon other proposed rules that the agency claims will unleash innovation in healthcare by encouraging a competitive market that lowers costs and increases the quality and access of healthcare.

“Our vision is ambitious yet achievable: To protect and secure Medicare and ensure beneficiaries have access to the latest medical technologies,” Verma said at the meeting.

Just last week, the agency announced payment policy changes to support access to more transformative technologies, including certain antimicrobial drugs and CAR-T cell therapies.

CMS has also proposed to modernize payment policies for medical devices that receive breakthrough device designation from the FDA. The update to the policies includes waiving the requirement for “substantial clinical improvement.”

What does that mean? When a device is granted breakthrough designation, real-world data on a variety of patient populations are often limited, which makes it hard for innovators to meet the requirement. Waiving the mandate would provide additional Medicare payment for the technologies for a period of time when the real-world evidence is emerging, so the beneficiaries do not have to wait for access to the technologies.

Verma said that with the advent of novel technologies, it is up to CMS to ensure safe and effective treatments are readily accessible without delaying patient care.

“Simply put, our goal is to get new innovations to our beneficiaries concurrent with FDA approval by, one, removing government barriers to innovation and two, harmonizing CMS coverage, coding and payment processes,” she said.

The agency is also looking at several new systematic initiatives to speed up the process for engaging with innovators and new technologies.

Coding, coverage and payment determinations are not always made in a particular sequence, which can lead to unpredictable pathways for innovators to review timelines and engage with CMS. Innovators want more transparency.

CMS said it will try to provide a more advanced guidance on how its processes sync with the FDA’s guidance. The two agencies are working together before devices are approved to expedite coverage opportunities for Medicare beneficiaries.

CMS understands that using general codes makes it hard to bill for services. Permanent codes should be issued more often to enhance the ease of billing for new technologies, they argued. So, CMS has explored more frequently issuing Healthcare Common Procedure Coding System codes, on either a semiannual or quarterly basis.

Innovators will have opportunities each quarter to submit or get drug approvals. They will also have semi-annual opportunities to submit devices, which could help them accelerate through the adoption curve.

CMS also heard concerns that its Medicare contractors were making decisions to automatically not cover technologies with category III Current Procedural Terminology codes, which are used for emerging technologies.

This week, the agency posted answers to frequently asked questions about the local coverage determination process, noting that contractors cannot make local coverage decisions that automatically bar an item or service because it has a category III code.

Verma said that if these changes are implemented, there is an opportunity to improve innovator experiences with Medicare, create predictable coverage pathways and enhance opportunities for coverage for transformative technologies.

“To achieve these goals, all of us will need to work together towards a modernized CMS that can readily adapt to tomorrow’s innovations,” said Verma.

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