April 19, 2021
Breakthrough Device Designation Reimbursement

What is Breakthrough Device Designation (BDD) and Why Has the Automatic BDD Reimbursement Been Paused by the Centers for Medicare & Medicaid Services (CMS)?

The Breakthrough Device Designation (BDD) is a mechanism for certain medical devices that meet specific eligibility criteria. The BDD may allow for more support from and communication with FDA, timelier interactions, a more flexible clinical study design, and priority review.  This frequent communication increases the efficiency of the development and review processes, allowing for a reduction in time to market for new and novel medical devices.

As of March 12th, the Centers for Medicare and Medicaid Services (CMS) has paused the Medicare Coverage of Innovative Technology (MCIT)reimbursement for Breakthrough Device Designation (BDD)1⁻³ partially due to a wider effort by the Biden administration to reconsider all rules enacted in the last days of the previous administration and partially due to a prominent article advocating for reconsideration of MCIT.⁴ MCIT, originally implemented in a January 2021 rule, was designed to expand CMS coverage to breakthrough technology and the major concerns of this expansion are the costs associated with this program (due to the large number of eligible devices) and the impression that the long-term safety and effectiveness of these devices has not been adequately studied. However, the debate on this particular program is heated with lobbyists on both sides of the issue. Currently, the result is unclear but may be known in next 2 months when the 60 days pause and public comment period has elapsed.

Prior to the paused MCIT rule, CMS had experimented with using the FDA BDD as a way to expedite smaller parts of the reimbursement process. Breakthrough Designated Devices previously were exempted from demonstrating the “newness or substantial improvement” criteria of the New Technology Add-On Payment (NTAP) pathway implemented under the 2020 Inpatient Prospective Payment System (IPPS) CMS rule. There are other criteria to the NTAP pathway (e.g. inpatient technologies only) and it did not guarantee coverage but only indicated how a product may be paid if covered. One of the additional requirements for coverage was a determination that the product was “reasonable and necessary” to treat the beneficiary’s condition.

Part of the paused MCIT regulation was a more clear definition of the “reasonable and necessary” requirement. According to CMS, an item or service would be considered reasonable and necessary if it is:

1. Safe and effective

2 Not experimental or investigational

3. Appropriate for Medicare patients, including the duration and frequency that is considered appropriate for the item or service, in terms of whether it is:

          i. Must meet all of:

                    a. Furnished in accordance with accepted standards of medical practice for the diagnosis or treatment
                        of the patient's condition or to improve the function of a malformed body member

                    b. Furnished in a setting appropriate to the patient's medical needs and condition

                    c. Ordered and furnished by qualified personnel

                    d. One that meets, but does not exceed, the patient's medical need, and

                    e. At least as beneficial as an existing and available medically appropriate alternative.

          OR

          ii. If it is covered in the commercial insurance market, except where evidence supports that there are
              clinically relevant differences between Medicare beneficiaries and commercially insured individuals.
              An item or service deemed appropriate for Medicare coverage based on commercial coverage would
              be covered on that basis without also having to satisfy the previously listed bullets.

This was previously defined on an individual case-by-case basis and this formalized definition would reduce administrative burden and potentially increase the adoption of breakthrough technology.¹

CMS and FDA Regulatory Alignment

To give some historical background on the potential impact of this paused rule, CMS and FDA traditionally have very little communication with each other. While this means that the FDA review is unlikely to directly influence CMS review, it also means that a sponsor company must design a clinical study to meet two, sometimes disparate, sets of requirements. FDA focuses on the intended use population (which can be narrowed with labeling) while CMS is more focused on the Medicare population; age and co-morbidities can differ significantly between these two. FDA looks entirely at safety and effectiveness while CMS also considers healthcare economics and pricing. Because of this and depending on the indication, CMS typically requires more long-term outcome data than FDA. This often results in a longer timeline to gain CMS coverage compared to FDA clearance or approval.

One alternative to the tenuous BDD/MCIT pathway is the parallel review process.⁶ Parallel review establishes communication between FDA and CMS and the sponsor in two steps: (1) FDA and CMS meet with the manufacturer to provide feedback on the proposed pivotal clinical trial within the FDA pre-submission process; and (2) FDA and CMS concurrently review (‘‘in parallel’’) the clinical trial results submitted in the PMA, or de novo request. FDA and CMS then independently review the data to determine whether it meets their respective agency standards and communicate with the manufacturer during their reviews. Parallel review is most successful for devices with a significant amount of clinical evidence.⁶

How can a New Device Move Forward from Here?

The postponed CMS rule states that candidates for parallel review are not appropriate for simultaneous MCIT consideration, so there is a choice between BDD/MCIT, parallel review, or neither (independent review by each agency). Contact us if you have any questions about breakthrough device designation review and how to proceed.

References:

  1. Federal Register. 2021. Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary”. [online] Available at: <https: 2020="" www.federalregister.gov="" documents="" 09="" 01="" 2020-19289="" medicare-program-medicare-coverage-of-innovative-technology-mcit-and-definition-of-reasonable-and=""> [Accessed 30 March 2021].</https:>
  2. Public-inspection.federalregister.gov. 2021. [online] Available at: <https: public-inspection.federalregister.gov="" 2021-05490.pdf=""> [Accessed 30 March 2021]. </https:>
  3. Kelly, S., 2021. CMS puts the brakes on breakthrough device coverage rule. [online] Healthcare Dive. Available at: <https: 596791="" www.healthcaredive.com="" news="" cms-puts-the-brakes-on-breakthrough-device-coverage-rule=""> [Accessed 30 March 2021].</https:>
  4. Rathi VK, Johnston JL, Ross JS, Dhruva SS. Medicare's New Device-Coverage Pathway - Breakthrough or Breakdown?. N Engl J Med. 2021;384(12):e43. doi:10.1056/NEJMp2101874
  5. Andrew. T., The National Law Review. 2021. CMS Releases Highly Anticipated Medicare ‘Breakthrough’ Coverage Final Rule. [online] Available at: <https: www.natlawreview.com="" article="" cms-releases-highly-anticipated-medicare-breakthrough-coverage-final-rule=""> [Accessed 30 March 2021].</https:>
  6. U.S. Food and Drug Administration. 2021. Payor Communication Task Force. [online] Available at: <https: www.fda.gov="" about-fda="" cdrh-innovation="" payor-communication-task-force#3=""> [Accessed 30 March 2021]. </https:>

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