Stryker Issues Public Comment on Centers for Medicare & Medicaid Services Proposed Rule

WASHINGTON, Nov. 28 -- Eric Rugo, vice president for government affairs and health policy at Stryker, Allendale, New Jersey, has issued a public comment on the Centers for Medicare and Medicaid Services proposed rule entitled "Medicare Program: Medicare Coverage of Innovative Technology and Definition of Reasonable and Necessary". The comment was written on Nov. 2, 2020, and posted on Nov. 12, 2020:

* * *

Thank you for this opportunity to comment on the Centers for Medicare & Medicaid Services' proposed rule to establish the Medicare Coverage of Innovative Technology (MCIT) pathway and codify the Medicare "reasonable and necessary" standard (Proposed Rule).

Stryker is one of the world's leading medical technology companies and together with our customers, we are driven to make healthcare better. Stryker is committed to bringing the best possible solutions to patients, providers, and Medicare. This philosophy has placed Stryker at the forefront of medicine's most promising breakthroughs in joint replacements, trauma, spine, orthobiologics, surgical navigation systems, neurovascular solutions, robotics, and related procedures.

In short, the Proposed Rule combines two distinct proposals that we believe should be considered separately. First, Stryker strongly supports CMS's proposed establishment of the MCIT pathway to accelerate Medicare coverage of breakthrough devices. We offer suggestions for improving this program, including revising the start date of coverage and expanding the types of devices included in the MCIT program. We also encourage CMS to provide additional information on how it will integrate coding and payment for the new breakthrough technologies to support the MCIT coverage policy. We urge CMS to finalize adoption of the MCIT pathway policy as soon as possible.

Second, CMS proposes to codify a revised standard for making Medicare "reasonable and necessary" determinations. Stryker believes that the current Medicare Program Integrity Manual (PIM) provisions provide settled guidance to stakeholders while maintaining the flexibility necessary to accommodate medical innovation. Codification of a revised standard therefore is not necessary.

Furthermore, we have serious concerns about CMS's proposed "reasonable and necessary" definition, which would incorporate commercial coverage policies into Medicare coverage determinations. We oppose adoption of this proposed policy. CMS and the Medicare Administrative Contractors (MACs) should instead continue to use the established coverage determination processes that include notice, consultation with relevant parties, and full evidence review. We believe that CMS should proceed separately with expeditious finalization of the MCIT proposal. If CMS proceeds with consideration of any future changes to the reasonable and necessary definition, we recommend that the agency issue an advance notice of proposed rulemaking and host "town hall" meetings to solicit public comments, followed by a separate proposed rulemaking to maximize opportunities for stakeholder input, given the complex policy issues involved.

Our detailed comments follow.

I. MCIT Pathway

CMS proposes to establish the MCIT pathway to provide immediate national Medicare coverage for devices designated as part of the Food and Drug Administration's (FDA) Breakthrough Devices Program that are FDA market authorized./1

The MCIT pathway would be voluntary, and coverage under the MCIT program would continue for up to 4 years. CMS would encourage, but not require, manufacturers that have breakthrough devices covered under MCIT to develop additional data for the healthcare community.

Stryker strongly supports CMS's proposed establishment of the MCIT pathway, and we commend CMS for seeking "to deliver on the Administration's commitment to provide access to breakthrough devices to Medicare beneficiaries." We believe the MCIT pathway aligns with Executive Order 13890 and complements other important steps the Administration has taken in recent years to promote Medicare beneficiary access to innovative technologies. These CMS policies include the establishment of new outpatient transitional pass-through (TPT) payment and inpatient new technology add-on payment (NTAP) pathways for "transformative" breakthrough medical devices and revisions to the standard CMS uses to determine whether a new technology represents a "substantial clinical improvement" over existing technologies.

We offer below our responses to specific CMS questions about policy options for implementing the MCIT pathway.

A. Coverage Period

CMS proposes that MCIT pathway eligibility would begin on the same date the device receives FDA market authorization "to ensure there is no gap between Medicare coverage and FDA market authorization" and provide beneficiaries with "predictable access to new devices." The coverage period would last for up to four years./2

CMS proposes a "lookback" provision under which breakthrough devices that received FDA market authorization no more than two calendar years prior to the effective date of the rule will be eligible for coverage under the MCIT pathway.

We agree that the MCIT period should last at least four years. Regarding the start of the eligibility period, CMS has acknowledged that technologies are often not available on the market immediately after FDA market authorization. For instance, for NTAP purposes, CMS considers the date that the medical service or technology came on the market (i.e., first sale or availability).

We likewise recommend that CMS begin the MCIT period at the later of the date of FDA market authorization or, when there is a documented delay in U.S. market availability, the date of first sale. CMS could also consider limiting the extension of the coverage start date based on date of first sale, such as one year after FDA market authorization.

We also agree that MCIT coverage should be available to devices with recent breakthrough status, which CMS defines as those devices receiving FDA market authorization up to two years prior to the effective date of the rule. We suggest that the four-year MCIT coverage period for any such devices also be considered to begin at the later of the device's FDA market authorization or the date of first sale. Aligning the start date would provide parity in treatment of breakthrough devices, regardless of when authorized for marketing by the FDA, and would account for marketing of devices prior to the effective date of the rule.

B. Eligibility

CMS proposes limiting the MCIT pathway to breakthrough devices, but CMS solicits comments on whether the pathway should also include additional types of technologies, including diagnostics.

CMS also states that it considered expedited coverage of devices with Premarket Approval and newly market authorized and breakthrough devices when used in a clinical study, but CMS did not offer a specific proposal. CMS proposes that covered items and services under the MCIT pathway may include, "the device, reasonable and necessary surgery to implant the device, if implantable, related care and services costs of the device . . . and coverage of any reasonable and necessary treatments due to complications arising from use of the device."

Stryker appreciates CMS's intention to cover all device-related procedure and service costs for devices with MCIT coverage. We are concerned, however, that the proposed regulatory language at Sec. 405.605(b) could be read to limit MCIT coverage to only implanted devices. To clarify that nonimplanted breakthrough devices are eligible for the MCIT coverage pathway, Stryker recommends that CMS amend the proposed regulatory language at 405.605(b) as follows:

(b) any reasonable and necessary procedures to implant or use the breakthrough device.

We also request that CMS clarify that all devices designated as part of the FDA Breakthrough Devices Program -- including diagnostics and/or monitoring technologies -- are eligible for MCIT coverage. The statutory framework for the breakthrough device program at 21 USC Sec. 360e-3 defines breakthrough devices as those that "provide for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions," including devices that offer significant advantages over existing alternatives to "facilitate patients' ability to manage their own care." Furthermore, CMS states that "the MCIT pathway can provide a fast-track to Medicare coverage of innovative devices that may more effectively treat or diagnose life-threatening or irreversibly debilitating human disease or conditions." Exclusion of subsets of devices with diagnostic/monitoring capabilities from the MCIT pathway would be contrary to the goals of the MCIT program and the spirit of Executive Order 13890.

Furthermore, Stryker recommends that CMS extend MCIT eligibility to devices approved for NTAP and/or TPT payment, since CMS has determined that such devices are new and offer substantial clinical improvement. Such extension would recognize that Medicare beneficiaries do not have meaningful access to a technology if CMS provides NTAP or TPT status, but the MACs deny coverage for the procedure. Alternatively, we recommend that CMS instruct the MACs to cover technology eligible for NTAP or TPT payments to provide beneficiaries access to these technologies nationwide.

C. Manufacturer Opt-In Approach

CMS proposes that the MCIT pathway would be voluntary; a manufacturer would opt-in to this coverage pathway. CMS states that it wants "to preserve manufacturers' business judgment and not assume which Medicare coverage pathway a given manufacturer of a breakthrough device would prefer (if any)." CMS adds that an opt-in notice "alerts CMS to offer guidance to manufacturers about the MCIT pathway and point to resources for coding and payment, which are key conversations to effectuate coverage upon FDA market authorization."

We support CMS's proposed opt-in approach. We agree that many manufacturers of breakthrough devices can be expected to participate in MCIT coverage, but there may be cases in which a manufacturer prefers to pursue permanent coverage through a national coverage determination (NCD) or local coverage determination (LCD). If a manufacturer delays to opt-in to the MCIT program, we recommend that the MCIT eligibility start date not be modified, however. As previously noted, we believe that consistent use of the FDA market authorization/first sale date for the MCIT coverage start date would provide a level playing field and uniformly account for marketing after FDA market authorization.

We also note that the success of the MCIT pathway will depend on concurrent coding and payment. CMS states in the preamble that it will "point to resources for coding and payment" when a manufacturer opts into the MCIT program, but CMS does not explain how it will ensure that coding and appropriate payment are in place when coverage is established. We encourage CMS to ensure a process will be in place to establish adequate and timely coding and payment for breakthrough technologies to support this new coverage pathway. A unified, simplified reimbursement process would align with Executive Order 13890's call for: streamlining the approval, coverage, and coding process so that innovative products are brought to market faster, and so that such products, including breakthrough medical devices and advances in telehealth services and similar technologies, are appropriately reimbursed and widely available, consistent with the principles of patient safety, market-based policies, and value for patients.

D. Evidence Collection

While CMS encourages manufacturers participating in MCIT coverage "to develop the clinical evidence base needed for one of the other coverage pathways after the MCIT pathway ends," CMS does not propose that manufacturers of breakthrough devices would be obligated by CMS to conduct clinical studies during the MCIT coverage period. However, CMS seeks comments on whether it should require or incentivize manufacturers to provide data about outcomes or enter a clinical study like the Coverage with Evidence Development paradigm.

We support CMS's proposal not to impose specific information collection requirements on MCIT technologies to maximize flexibility. The scope of potential breakthrough devices is too broad for CMS to impose uniform evidence collection requirements. Evidence collection needs might differ based on the patient population treated or the type of device, for example. We agree, however, that manufacturers may need to continue to generate clinical evidence to support coverage after the MCIT period. We believe it will be useful for CMS to engage with manufacturers early in the MCIT coverage period to discuss potential clinical study designs and endpoints that can produce evidence to support national coverage at the conclusion of the MCIT period.

To the extent that CMS seeks to explicitly promote evidence collection, such as reporting data to a registry, we encourage CMS to offer an incentive for such data collection. For instance, CMS could extend the MCIT coverage period for such devices, such as by one to two years, while such evidence is being collected.

E. On-Label Use

CMS proposes that coverage under the MCIT pathway is limited to a device "used according to its FDA approved or cleared indication for use." We agree with CMS that MCIT coverage should be limited to on-label use, especially to support permanent coverage at the end of the MCIT period of coverage. However, we ask that CMS explicitly specify within the rule that the limitation of MCIT coverage to the FDA-approved indication should not be interpreted as non-coverage for any off-label use, unless coverage of such off-label use is specifically denied in an applicable NCD or LCD. Beneficiaries should retain access to off label therapies recommended by their physician when approved by a MAC.

F. Transparency

CMS intends to post on its website all MCIT devices "so that all stakeholders will be aware of what is covered through the MCIT pathway." Stryker appreciates CMS's commitment to being transparent about this new program and sharing information with stakeholders regarding MCIT-covered devices, similar to the way CMS posts information about Medicare coverage of Investigational Device Exemption studies.

G. Coverage after MCIT

At the end of the four-year MCIT pathway, CMS proposes that coverage of the breakthrough device would be subject to one of these possible outcomes: (1) NCD (affirmative coverage, which may include facility or patient criteria); (2) NCD (non-coverage); or (3) MAC discretion (claim-by-claim adjudication or LCD). Manufacturers that are interested in an NCD are encouraged to submit a request during the third year of MCIT to allow sufficient time for NCD development. CMS seeks comments on whether CMS should instead open a national coverage analysis if a MAC has not issued an LCD for a breakthrough device within six months of the end of the four-year MCIT period.

We agree that a breakthrough device should be subject to the established coverage options at the end of MCIT coverage. We do not believe an NCD is appropriate or necessary at the conclusion of the MCIT period for every technology; claim-by-claim adjudication may be more appropriate for some technologies. We encourage CMS to ensure that a technology can maintain seamless coverage if the manufacturer complies with CMS's timelines for developing an NCD.

II. Defining "Reasonable and Necessary"

A. Proposed Codification of Standard

The second, distinct part of the Proposed Rule addresses the Medicare "reasonable and necessary" coverage standard. CMS proposes to codify in regulations the current PIM definition of "reasonable and necessary" with modifications, including the addition of a reference to Medicare patients and a reference to commercial health insurer coverage policies. Under this proposal, an item or service would be considered "reasonable and necessary" if it is--

(1) safe and effective;

(2) not experimental or investigational; and

(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--

* 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;

* Furnished in a setting appropriate to the patient's medical needs and condition;

* Ordered and furnished by qualified personnel;

* One that meets, but does not exceed, the patient's medical need; and

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

Alternatively, an item or service would be "appropriate for Medicare patients" without needing to satisfy the additional bullets under criterion (3) 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. When Medicare coverage is based on commercial coverage, CMS proposes to "adopt the least restrictive coverage policy for the item or service amongst the offerings we examine," but the agency may "instead adopt the most restrictive coverage policy." CMS seeks comments on sources of data it could use to implement this policy "and whether CMS should make this information public and transparent."

Stryker believes that the current Medicare PIM "reasonable and necessary" provisions provide settled, predictable guidance that is well-understood by stakeholders. At the same time, the current definition provides necessary flexibility to accommodate rapidly accelerating medical innovation. We therefore oppose codification of a revised standard. Should CMS still have an interest in codifying the existing PIM language, we recommend that the agency defer such action until a later date and proceed separately with finalizing the MCIT provisions of the Proposed Rule. CMS then could begin a new rulemaking on the reasonable and necessary standard that thoughtfully engages stakeholders in an open and transparent process, with greater opportunity for input from all stakeholders, including industry and beneficiary representatives.

B. Concerns Regarding Incorporation of Commercial Insurance Coverage Policies into Medicare

Stryker has serious concerns about CMS's proposal to incorporate commercial coverage policies into the Medicare program. We oppose CMS adoption of this policy.

There are fundamental differences between commercial plans and Medicare that are not addressed in the Proposed Rule. Commercial plans serve a different population than Medicare, and they may have a for-profit mission; limiting coverage can be one way to meet the goals of that mission.

Commercial plans also rely on external technology assessment organizations' recommendations to develop coverage policies with no standard, public process for providing input or requirement for transparency regarding the evidence guidance policymaking. These organizations' reports are often outdated and are only updated if an external entity pays the technology assessment organization to do so, regardless of whether the organization is provided with new clinical studies demonstrating clinical effectiveness. In our experience, commercial plans also may simply adopt policies of other payers without performing an independent review of the evidence. Plans also often rely on Medicare coverage for guidance, so Medicare adoption of commercial plans would essentially rely on circular reasoning rather than deliberate consideration of the evidence. Furthermore, some commercial plans take into account cost effectiveness analyses in making coverage determinations, which CMS is not expressly authorized to consider as a factor in coverage determinations under the Social Security Act.

It also is surprising that CMS asks whether to make commercial coverage information "public and transparent." The Medicare coverage process, at both the national and local MAC levels, is guided by clear procedural requirements that notify stakeholders of pending coverage changes decisions and enable stakeholders to provide comments and present evidence. Transparency should continue to be a fundamental requirement for all Medicare coverage policies. Our experience is that commercial payer coverage development is not transparent, nor are there uniform evidence review standards.

Commercial coverage policies therefore should not be relied on by Medicare as a proxy for evidence review, and CMS and the MACs should not be permitted to simply point to the existence of a commercial coverage policy to bypass current coverage development procedural requirements.

We agree that to the extent CMS finalizes this policy, commercial coverage should not be considered if there are clinically relevant differences between Medicare beneficiaries and commercially insured individuals. CMS needs to provide additional information regarding the standard it would use to make such a determination.

C. Range of Proposed Options for Incorporating Commercial Health Plan Policies

CMS seeks comments on whether stakeholders wishing to gain Medicare coverage for an item or service demonstrate that the item or service is covered by at least one commercial insurance plan policy. Alternatively, CMS considers limiting its consideration to commercial plan offerings or covered lives to a subset of the commercial market (e.g., geographic subsets, subsets based on number of enrollees, subsets based on plan type (HMO, PPO, etc.) or other subsets of plans). Furthermore, CMS asks if there should be a threshold such as coverage for a majority, or a different proportion such as a plurality, of covered lives amongst plans or a majority, plurality, or some other proportion of plan offerings in the commercial market.

CMS provides numerous potential options for using commercial health plan policies for Medicare purposes. As noted above, we believe that there are significant drawbacks to CMS's proposal regardless of whether CMS incorporates the policies of a single plan, a proportion of plans, or some other subset of plans, and we oppose the proposal in any formulation. Each of the scenarios outlined by CMS would allow commercial plans to determine the scope of Medicare benefits without any of the procedural/transparency safeguards that Congress and CMS have developed to ensure notice, comment, and evidence review during coverage policy development.

In conclusion, we commend CMS for its proposed establishment of the MCIT pathway to accelerate Medicare coverage of breakthrough devices, and we urge the agency to expeditiously finalize this proposal with our suggested modifications.

We oppose CMS codification of a revised standard for making Medicare "reasonable and necessary" determinations. Any consideration of a new standard - particularly one that incorporates commercial coverage policies into the Medicare program - should be subject to additional notice and comment opportunities given the complex policy issues involved.

Thank you for your consideration of our comments. If you have any questions, please do not hesitate to contact me.

Sincerely,

Eric Rugo

Vice President Government Affairs and Health Policy

* * *

Footnotes:

1/ The breakthrough device must have a Medicare benefit category and not be specifically excluded by statute.

2/ The MCIT pathway may end prior to four years if the device becomes subject to an NCD, regulation, statute, or if the device can no longer be lawfully marketed.

* * *

The proposed rule can be viewed at: https://www.regulations.gov/document?D=CMS-2020-0098-0002

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, editor@targetednews.com, Springfield, Virginia; 703/304-1897; https://targetednews.com