FDA Moves to Help CMS With Device Coverage Decisions

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By Michael D. Williamson

May 31 — The FDA May 31 updated its policies on categorizing investigational devices, which will help the CMS when it makes coverage decisions.

A Food and Drug Administration draft guidance announced the changes. It is titled FDA Categorization of Investigational Device Exemption (IDE) Devices to Assist the Centers for Medicare & Medicaid Services (CMS) with Coverage Decisions.

An IDE allows a device to be used in a clinical study to collect safety and effectiveness data. Earlier policies on device categorization became outdated, and the FDA and Centers for Medicare & Medicaid Services have taken steps to revise “their shared understanding regarding categorization,” according to the document.

The Advanced Medical Technology Association (AdvaMed), a device industry group, welcomed the draft document. “While we are still reviewing the details of the draft FDA guidance, we support efforts to expedite CMS coverage decisions on devices used in FDA-approved clinical trials,” JC Scott, AdvaMed's senior executive vice president for government affairs, told Bloomberg BNA May 31.

“We hope the new guidance will further clear the way for Medicare patients to participate in IDE trials,” Scott said.

Moving to Another Category

The draft guidance modifies the FDA's process for placing IDE device studies into category A, for when there are unresolved questions about a device's safety or efficacy, or category B, for when a device is being tested for a new indication or has new characteristics.

Pre-existing policies dictate that when the FDA places a device study into category A, Medicare cannot cover device expenses for those studies, the guidance said. However, Medicare may make payment for an investigational device and routine care items and service furnished in an FDA-approved category B IDE study under specific circumstances, it added.

In addition, the draft guidance outlines the FDA's process for moving a device from category A into category B. Under examples outlined in the document, the FDA would move a device into category B when presented with new evidence that resolves questions about the product's safety or effectiveness.

A 1995 policy on device categorization between the FDA and the Health Care Financing Administration, the predecessor to the CMS, didn't discuss how to move products between categories, the draft guidance said.

A notice announcing the guidance is slated to be published in the Federal Register June 1. Comments (FDA-2016-D-1159) are due Aug. 2.

Simplifies Process

The updates the draft guidance makes to the FDA's categorization process simplifies what was a complicated procedure, Theodore Sullivan, a Washington-based attorney at Quarles & Brady LLP, told Bloomberg BNA May 31.

Essentially, the device categorization process comes down to whether the product is safe and effective, Sullivan said. The draft guidance allows industry to focus on this question, instead of worrying about several subcategories that existed under the previous categorization process, he said.

The draft guidance is “a good step” and should make it easier for industry to plan product development strategies, Sullivan added.

FDA-CMS Memo, Effective June 2

The draft guidance said it is intended to implement a December 2015 memorandum of understanding between the FDA's Center for Devices and Radiological Health and the CMS's Coverage and Analysis Group.

That memorandum, which takes effect June 2, noted the need for the agencies to update their policies on device categorization. Overall, the memorandum is meant to streamline and facilitate the efficient categorization of investigational medical devices to support the CMS's ability to make Medicare coverage determinations for those products, it said.

Recent Legislation

Legislation introduced by Sen. Dan Coats (R-Ind.) May 26 would also address gaps in the Medicare coverage process. However, Coats's bill (S. 2998), the Ensuring Patient Access to Critical Breakthrough Products Act, would only apply to devices that have been approved or cleared by the FDA, not those being investigated.

The legislation would establish a program to accelerate transitional coverage and payment for new technologies that offer breakthroughs for serious illnesses affecting Medicare beneficiaries, Coats said in a May 26 statement.

Coats's bill comes as the Senate is considering companion legislation on the House-passed 21st Century Cures Act (H.R. 6), which aims to speed development of and access to new drugs and devices. Sen. Lamar Alexander (R-Tenn.), who is leading the Senate effort on the legislation, said May 11 that he hopes there is a vote on the measure in July (92 HCDR, 5/12/16).

Currently there is a gap, which may last up to three years, between when a new medical device receives FDA approval or clearance and when the CMS issues a coverage decision for that product, according to Coats.

To speed access to breakthrough devices, Coats's legislation would grant new treatments approved through the FDA's expedited review program a three-year temporary Medicare coverage period. During this time, the CMS could specify what additional data would be needed to continue reimbursement after the initial three-year coverage period.

The bill was referred to the Finance Committee.

Reaction to Bill

AdvaMed praised the bill in a May 26 statement.

The bill “would both stimulate development of important new devices and diagnostics and assure more timely patient access to new treatment options,” Scott Whitaker, AdvaMed's president and chief executive officer, said.

To contact the reporter on this story: Michael D. Williamson in Washington at mwilliamson@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

For More Information

The draft guidance is at http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm504091.pdf.

The notice announcing the draft guidance is at http://src.bna.com/fsn.

The December 2015 memorandum of understanding is at http://src.bna.com/fsB.

Full text of S. 2998 is at http://src.bna.com/fsa.

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