CMS Finalizes Medicare Transitional Coverage for Emerging Technologies Pathway

CMS Finalizes Medicare Transitional Coverage for Emerging Technologies Pathway

August 19, 2024, Covington Alert

On August 7, 2024, the Centers for Medicare & Medicaid Services (“CMS”) released a final notice establishing the process and procedures for the Transitional Coverage for Emerging Technologies (“TCET”) pathway. The final notice aligns closely with the proposed notice that was published on June 28, 2023.

The TCET pathway is designed to give Medicare beneficiaries more timely and predictable access to up to five new medical technologies per year. The TCET pathway will leverage the existing National Coverage Determination (“NCD”) and Coverage with Evidence Development (“CED”) processes to facilitate coverage decisions on a limited number of devices designated as Breakthrough Therapy Devices by the U.S. Food & Drug Administration (“FDA”) annually.

Background

When CMS determines that there is insufficient evidence to definitively conclude an item or service is “reasonable and necessary,” the agency may issue a CED decision as part of an NCD. NCDs issued with a CED decision provide for Medicare coverage of select items and services, on the condition that they are furnished in the context of approved clinical studies or with the collection of additional clinical data. To date, CMS has used CEDs rarely.

According to CMS’s fact sheet, the TCET pathway “increases the number of NCDs that CMS will conduct per year and supports both improved patient care and innovation by providing a clear, transparent, and consistent coverage process . . . while maintaining robust safeguards for the Medicare population.” The TCET pathway is meant to provide manufacturers with opportunities for increased pre-market engagement with CMS while increasing flexibility to address evidence gaps. Participation in the TCET pathway may reduce uncertainty for manufacturers about coverage options through a pre-market evaluation of potential harms and benefits of technologies and identify important evidence gaps.

TCET Nomination, Selection, and Coverage

The above graphic on the TCET Pathway published by CMS shows the nomination, selection, and coverage process.

Manufacturers may submit a non-binding letter of intent to nominate a potentially eligible device approximately 18 to 24 months before anticipated FDA marketing authorization. The submission of a non-binding letter of intent may avoid delays in TCET reviews. CMS encourages manufacturers to submit a nomination for a device approximately 12 months prior to when the manufacturer anticipates an FDA decision on the submission. Since the TCET pathway depends on forward-looking, extensive premarket engagement, nominations for Breakthrough Devices anticipated to receive an FDA decision on market authorization within 6 months may not be accepted. TCET nominations will be reviewed by CMS on a quarterly basis. Manufacturers will not need to resubmit a nomination for the device in their original submission to be considered in a subsequent quarter.

CMS anticipates accepting up to five TCET candidates per year. According to the final notice, CMS will prioritize requests based on “the magnitude of the potential impact on the Medicare program and its beneficiaries and staffing resources.” Appropriate candidates for the TCET pathway would include those devices that are:

• FDA-designated Breakthrough Devices;
• Determined to be within a Medicare benefit category;
• Not already the subject of an existing Medicare NCD; and/or
• Not otherwise excluded from coverage through law or regulation.

CMS intends to soon release the proposed factors that the agency will use to prioritize TCET nominations.

Coverage under the TCET NCD will continue only as long as needed to facilitate the timely generation of evidence that can inform patient and clinician decision-making (which CMS anticipates may last for approximately five or more years). Standard NCD processes and timelines will continue to apply as part of the transition to post-TCET coverage, and following a 30-day public comment period, CMS will have 60 days to finalize the NCD reconsideration. CMS aims to finalize an NCD within six months after FDA market authorization.

Changes from the Proposed Notice

Notable changes to the final notice from the proposed notice not discussed above include:

• Inclusion of in vitro diagnostic products (“IVDs”): The final notice includes added language to clarify that CMS intends to consider IVDs, including diagnostic laboratory tests, for the TCET pathway.
• Posting of an Evidence Summary: If an NCD is opened, CMS will post an evidence summary on the CMS website for public comment.
• Interim Reporting: Evidence Development Plans (which are developed by the manufacturer to address any evidence gaps in a device’s initial literature) should incorporate interim reporting to ensure adequate progress and timely completion. Interim reports should also disclose any meaningful changes to prespecified study protocols, which are essential to transparency.
• NCD Dashboard: Some information on TCET devices will be added to the NCD Dashboard, including the number of devices in the TCET pathway, the date of nomination, the date of acceptance, and the date the NCD process was initiated. This dashboard will be updated on an ongoing basis.

Manufacturer-Specific Considerations

As manufacturers consider the nomination of a candidate device, manufacturers will want to weigh the risks and benefits of the TCET pathway for that device. Some considerations include:

• Potentially inconsistent coverage or non-coverage by local Medicare contractors upon approval;
• The potential for the TCET pathway to result in a CED;
• The timelines of the TCET pathway and NCD reconsideration, particularly if a CED is involved;
• Benefits of the evidence development options, including fit-for-purpose (“FFP”) studies that can rely on real-world data; and
• Perception by commercial payers of information included in the NCD Dashboard.

Device nominations for the first quarterly review must be submitted by October 31, 2024. Subsequent review deadlines are January 31, 2025; April 30, 2025; and July 31, 2025.

Manufacturers who are interested in the TCET pathway may notify CMS through the Coverage Center Website using the “Contact Us” link. For more information on the final notice, please see the Fact Sheet published by CMS.

If you have any questions concerning the material discussed in this client alert, please contact the members of our Health Care practice.