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The Repeal of MCIT: 3 key takeaways for medical device manufacturers

In November 2021, the Medicare Coverage of Innovative Technology (MCIT) repeal was published in the Federal Register. This decision left start-up MedTech companies wondering if a U.S. Food and Drug Administration (FDA) Breakthrough designation would have advantages over traditional pathways and assist with the medical device reimbursement process. While there were benefits to the original MCIT, was there anything to assist with coding, coverage and payment with the repeal?  Before we answer this question, let’s review a brief history of the MCIT rule.

The original MCIT rule, published in the Federal Register on January 14, 2021, intended to establish a pathway for innovative medical devices to obtain Medicare coverage and avoid the long wait times typical of the current Medicare process. The idea was to create a process specific to Medicare, similar to the FDA’s Breakthrough Designation program, which promotes accelerated review and an avenue for collaborative communication for regulatory clearance of innovative devices.

The FDA and the Centers for Medicare and Medicaid Services (CMS) operate under very different statutes and have varying goals, yet they are similar in the aspect that both entities require some level of clinical data for approval (unless FDA-exempt). When digging into the details, clinical evidence requirements differ widely for each of these goals:

  • FDA clearance and classification
  • National coding
  • National and local coverage
  • Medical necessity for individual approval  

From a manufacturer’s viewpoint, it can be very costly to wait multiple years to gain widespread coverage to maximize commercialization opportunities. When a company has FDA clearance but no reimbursement pathway, this often results in a commercial lag effect.

To address the above challenge, the MCIT Rule proposed that CMS should automatically offer an initial four (4) years of coverage for breakthrough devices. At the end of this four year period, national coverage would defer to normal coverage review pathways, i.e. local coverage determination (LCD) and national coverage determination (NCD) processes to determine coverage. This would allow a device/product to gain traction in the marketplace, decreasing barriers to physician orders and patient treatment.

For the manufacturer, this would address a huge pain point, but for other stakeholders cautionary alarms sounded. Could CMS control unknown or unexpected safety risk exposures to patients? Does FDA data sufficiently represent clinical data used in local or national coverage determinations? Would this special program allow unfair coverage advantages to products that receive breakthrough designations? These were just some of the criticisms to the theoretical and operational aspects of the proposed MCIT rule which led to its repeal in November 2021.

So here we are, back to the original problem of a multi-year outlook on Medicare coverage that some argue lacks transparency and ballooning resource investments. What avenues to coverage do innovative devices and breakthrough designation products have related to the MCIT repeal?

1. Coverage with Bundle Payment

Some devices do not require local or national coverage policies because they fall into a ‘Bundle Payment Methodology.’ For these devices, the decision on whether or not to use a particular device rests on the physician or surgeon who chooses the procedure and treatment for a patient. In these instances, there may not be any barrier or oversight from payers on how a physician or surgeon treats patients. Some examples of devices in Bundled Payment (such as comprehensive Ambulatory Payment Classifications, APCs, under the Medicare Outpatient Prospective Payment System) include supplies for certain procedures. In fact, in many cases, reporting and interpretation of services such as imaging may be bundled into different reimbursement mechanisms.

2. Coverage with Evidence Development

Coverage with Evidence Development (CED) has received some criticism because it is a massive undertaking and involves an unpredictable multi-year timeline. But, it is currently the only program that combines FDA and CMS involvement in a parallel format. During the CED process, manufacturers can expect to require dedicated resources to liaise and manage the program with the government entities. Once the program is complete—even though long-term coverage may be granted—there is still uncertainty to eventual reimbursement rates.

3. Medicare Coverage Related to Investigational Device Exemption (IDE) Studies

To foster innovation, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) developed a program to allow Medicare payments for routine costs of care furnished to Medicare beneficiaries in certain IDE studies. The benefit of Medicare coverage of an IDE study is first, the obvious alleviation of partial costs associated with conducting an IDE trial, in addition to the less obvious benefit of obtaining Medicare input. The Medicare Coverage and Analysis Group (CAG) is the same group that reviews national coverage determinations. These study types provide an opportunity to gather input on inclusion/exclusion criteria, population size, comparators and evidence needs for reimbursement coverage.

These pathways are available to utilize today, but some manufacturers may also want to advocate for a new proposed rule under Transitional Coverage for Emerging Technologies (TCET). However, the process has only begun and its pathway forward is speculative.

In any case, manufacturers should consider potential reimbursement strategies early in the development process, as an evidence strategy will always be required for coverage. NAMSA reimbursement experts can help you optimize the best coverage path forward.

How Can NAMSA Help?

Global medical device Sponsors often face similar challenges when bringing novel technologies to the marketplace. Healthcare payment and reimbursement systems throughout the world are complex and can vary widely from one country to another, making it critical to understand potential reimbursement barriers early on in the process.

As a result of these intricacies, global medical device organizations sometimes lack the proper context when distinguishing effective reimbursement and commercialization strategies—that’s where NAMSA’s international team of reimbursement experts can put their knowledge to work for you.

NAMSA offers a full continuum of reimbursement services and solutions for new and existing medical technologies. Our teams are expert in all aspects of reimbursement strategy, including: payer relations, medical policy research, coverage advocacy, HCPCS and CPT code applications and health economic analysis.

To learn more about NAMSA’s Reimbursement Services, please visit: https://namsa.com/services/reimbursement/. Or, sign up for a complimentary consultation with one of our reimbursement experts by visiting: https://namsa.com/namsa-expertise/subject-matter-experts/.

Rebecca Lanquist

Rebecca Lanquist

Rebecca Lanquist is a seasoned reimbursement professional with multiple years of experience in Medical Devices, Durable Medical Equipment and Remote Patient Monitoring. Her functional expertise include Reimbursement Strategy, Health Policy, Coverage, Billing Guides and Tools, Payer Relations for Limited Coverage Cases, DME Supplier Billing, Medicare and Stakeholder Incentives. Rebecca’s prior work include products in Urology, Skin and Wound Care, Physical Medicine and Rehabilitation, External Prosthetics and Orthopedics. Prior to NAMSA, Rebecca held positions at firms such as Ottobock Healthcare, Coloplast Corp. and Magellan Medical Technology Consultants .