Medicare Program; Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary”; Delay of Effective Date, 26849-26854 [2021-10466]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 86, Number 94 (Tuesday, May 18, 2021)]
[Rules and Regulations]
[Pages 26849-26854]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-10466]



[[Page 26849]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 405

[CMS-3372-F2]
RIN 0938-AT88


Medicare Program; Medicare Coverage of Innovative Technology 
(MCIT) and Definition of ``Reasonable and Necessary''; Delay of 
Effective Date

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Final rule.

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SUMMARY: This final rule delays the effective date of the final rule 
titled, ``Medicare Program; Medicare Coverage of Innovative Technology 
(MCIT) and Definition of 'Reasonable and Necessary' '' published in the 
January 14, 2021 Federal Register.

DATES: As of May 14, 2021, the effective date of the final rule 
amending 42 CFR part 405, published at 86 FR 2987, January 14, 2021, 
and delayed at 86 FR 14542, March 17, 2021, is further delayed until 
December 15, 2021.

FOR FURTHER INFORMATION CONTACT: Lori Ashby at (410)-786-6322 or 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background

A. Introduction

    In the January 14, 2021 Federal Register, we published a final rule 
titled ``Medicare Program; Medicare Coverage of Innovative Technology 
(MCIT) and Definition of `Reasonable and Necessary' '' (86 FR 2987) 
(hereinafter referred to as MCIT/R&N final rule). The January 2021 
final rule established a Medicare coverage pathway to provide Medicare 
beneficiaries nationwide with faster access to new, innovative medical 
devices designated as breakthrough by the Food and Drug Administration 
(FDA). Under the final rule as currently written, MCIT would result in 
4 years of national Medicare coverage starting on the date of FDA 
market authorization or a manufacturer chosen date within 2 years 
thereafter. The MCIT/R&N final rule would also implement regulatory 
standards to be used in making reasonable and necessary determinations 
under section 1862(a)(1)(A) of the Social Security Act (the Act) for 
items and services that are furnished under Medicare Parts A and B.

B. March 17, 2021 Interim Final Rule (IFC)

    In response to the January 20, 2021 memorandum from the Assistant 
to the President and Chief of Staff titled ``Regulatory Freeze Pending 
Review'' (``Regulatory Freeze Memorandum'') (86 FR 7424, January 28, 
2021) and guidance on implementation of the memorandum issued by the 
Office of Management and Budget (OMB) in Memorandum M-21-14 dated 
January 20, 2021, we determined that a 60-day delay of the effective 
date of the MCIT/R&N final rule was appropriate to ensure that: (1) The 
rulemaking process was procedurally adequate; (2) the agency properly 
considered all relevant facts; (3) the agency considered statutory or 
other legal obligations; (4) the agency had reasonable judgment about 
the legally relevant policy considerations; and (5) the agency 
adequately considered public comments objecting to certain elements of 
the rule, including whether interested parties had fair opportunities 
to present contrary facts and arguments. Therefore, in an interim final 
rule that took effect on March 12, 2021, and appeared in the March 17, 
2021 Federal Register (86 FR 14542), we (1) delayed the MCIT/R&N final 
rule effective date until May 15, 2021 (that is, 60 days after the 
original effective date of March 15, 2021); and (2) opened a 30-day 
public comment period on the facts, law, and policy underlying the 
MCIT/R&N final rule.

C. Review of Public Comments on the Delay of the MCIT/R&N Final Rule

    We received approximately 215 timely pieces of correspondence in 
response to the interim final rule delaying the effective date of the 
MCIT/R&N final rule.
    In this section of this final rule, we summarize our response to 
comments on the delay of the MCIT/R&N final rule. To the extent 
applicable, we intend to also consider these comments for future 
rulemaking.
    Comment: Some manufacturers, in particular those with FDA 
designated breakthrough devices that have been market authorized, as 
well as the industry groups representing them commented that the MCIT/
R&N final rule should be implemented without further delay. Although 
they acknowledged certain operational issues remain, specifically 
coding and payment for applicable devices and/or the services in which 
they are used, these commenters suggested those issues could be 
overcome by adapting existing processes such as inpatient new 
technology add on payment (NTAP) and outpatient hospital transitional 
pass-through payment to determine coding and payment, at least when 
these devices are used in the hospital setting. These commenters also 
expressed that they believe patient safety provisions in the final rule 
are sufficient to protect beneficiaries.
    Other manufacturers that have FDA breakthrough designated devices 
but generally have yet to receive market authorization were supportive 
of a MCIT policy that would be more comprehensive and that includes 
specified guidance and expedited processes for benefit category 
determination, coding, and payment. These manufacturers support a delay 
of the MCIT/R&N final rule to the extent that such a delay would lead 
to a more comprehensive policy than the one that would be effective in 
May 2021.
    Response: The current MCIT/R&N final rule solely relates to 
coverage of certain devices under Medicare; it does not establish a 
benefit category determination (BCD), medical coding, nor payment rates 
for any devices. While we recognize that some commenters support a 
different policy that would address benefit category determinations, 
coding, and payment, in addition to coverage, the MCIT/R&N final rule 
was not designed to address factors beyond Medicare coverage. Further, 
while the rule eliminates coverage uncertainty early after FDA market 
authorization for those devices with a clear benefit category, the rule 
did not directly address the operational issues, such as how the agency 
would establish coding and payment.
    Comment: Several individual physicians and members of the public 
submitted comments supporting implementation of the MCIT/R&N final rule 
given the promise of breakthrough devices for their specialties or 
disease states of concern: Chronic obstructive pulmonary disease 
(COPD), prostate care, heart failure, stroke, opioid use disorder, 
oncology, and sleep disorders. On the other hand, some commenters 
suggested that the final MCIT/R&N rule provided automatic coverage for 
breakthrough devices without adequate evidentiary support.
    Response: We are aware that breakthrough devices span numerous 
clinical specialties. We note that MCIT would be one of several 
coverage pathways (that is, claim-by-claim adjudication, local 
coverage, National Coverage Determination (NCD)) for breakthrough 
devices. Even without the MCIT/R&N final rule in effect, a review of 
claims data showed that breakthrough devices have received and are 
receiving Medicare coverage when medically

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necessary. CMS reviewed fee-for-service claims data for several recent 
market-authorized breakthrough devices. The majority of the FDA market 
authorized breakthrough devices that would have been eligible for the 
MCIT pathway were already paid through an existing mechanism or were 
predominantly directed to a pediatric population. Of those that would 
be separately payable by Medicare on a claim-by-claim basis, the 
reviewed devices, were covered and paid under the applicable Medicare 
payment system.
    Regarding commenters' concerns about automatic coverage without 
evidentiary support, we share commenters' concerns that guaranteeing 
coverage for all breakthrough devices receiving market-authorization 
for any Medicare patient with possibly minimal or no evidence on the 
Medicare population and no requirement to develop evidence on the 
Medicare population could be problematic in ensuring these devices are 
demonstrating value and do not have additional risks for Medicare 
beneficiaries. For example, a breakthrough device may only be 
beneficial in a subset of the Medicare population or when used only by 
specialized clinicians to ensure benefit. Without additional clinical 
evidence on the device's clinical utility for the Medicare population, 
it is challenging to determine appropriate coverage of these newly 
market-authorized devices.
    Comment: Multiple stakeholders (manufacturers, physicians, 
associations) commented that CMS should modify the MCIT policy in some 
way. A substantial number of comments from a variety of stakeholders 
expressed evidentiary concerns with MCIT as currently designed, 
including that the current MCIT/R&N final rule's pathway establishes an 
open-ended coverage commitment for all breakthrough devices without 
demonstrating a health benefit in the Medicare population. 
Additionally, commenters were concerned that the current MCIT/R&N final 
rule does not specify, nor can it require, coverage criteria beyond the 
FDA indication(s) for use, and that evidence development under MCIT is 
voluntary, and narrowing coverage after MCIT expires will be 
challenging for devices that do not have a documented, proven benefit 
for Medicare patients. Many of these stakeholders recommend that CMS 
leverage or broaden the existing coverage with evidence development 
(CED) pathway to provide more timely and appropriate access to new 
technologies. These commenters encouraged CMS to require post market 
studies and data collection as part of MCIT to ensure that 
beneficiaries are gaining access to new technologies that improve 
health outcomes. Several breakthrough device manufacturers suggested 
that, for inclusion in MCIT, a portion of FDA pivotal studies should 
include a portion of Medicare beneficiaries. One breakthrough device 
manufacturer suggested that 25 percent of patients in the pivotal study 
should be Medicare beneficiaries for MCIT; otherwise, CED would be more 
appropriate.
    Response: We agree that for breakthrough devices for which studies 
did not include Medicare populations or populations with 
characteristics similar to the Medicare population CED or a similar 
evidence development process would strengthen the evidence base 
relevant to Medicare patients. In past NCDs, we have leveraged FDA 
required post-market studies in CED decisions.
    In contrast to the NCD process which involves a robust review of 
available clinical evidence, especially for the Medicare population, to 
determine whether the item or service is reasonable and necessary for 
Medicare beneficiaries, the current MCIT pathway in the MCIT/R&N final 
rule establishes a 4-year coverage commitment for all breakthrough 
devices that have a benefit category without a specific requirement 
that the device must demonstrate a health benefit or that the benefits 
outweigh harms in the Medicare population. In general, Medicare 
patients have more comorbidities and often require additional and 
higher acuity clinical treatments which may impact the outcomes 
differently than the usual patients enrolled in early studies. Medicare 
has also focused on real world data or implementation studies to 
understand how items and services perform when more broadly used in 
general practice in the Medicare population. These considerations are 
often not addressed in the early device development process.
    We also note that FDA grants breakthrough designation early in a 
device's product lifecycle. In part, the FDA considers ``whether there 
is a reasonable expectation that a device could provide for more 
effective treatment or diagnosis relative to the current standard of 
care (SOC) in the U.S. A complete set of clinical data is not required 
for designation.'' \1\ At the time a device is granted breakthrough 
status by the FDA, little may be known about the benefits and harms of 
the device. We recognize the importance of breakthrough technologies 
that provide for more effective treatment of life-threatening and 
irreversibly debilitating diseases and conditions when no effective 
treatment exists.
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    \1\ U.S. Department of Health and Human Services, Food and Drug 
Administration Breakthrough Devices Program: Guidance for Industry 
and Food and Drug Administration Staff 9 (December 18, 2018), 
available at https://www.fda.gov/media/108135/download.
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    In cases where there is greater uncertainty surrounding the 
benefit-risk profile of a breakthrough device, some commenters have 
suggested that more relevant evidence is needed for Medicare patients 
to determine health benefit, to mitigate harms that may not be apparent 
in initial studies with small sample sizes, and to understand the 
balance of benefits and harms when breakthrough devices are used more 
broadly in Medicare patients. The additional delay announced in this 
rule will provide an opportunity to ensure that the objections to the 
rule are adequately considered. We will consider ways to diminish 
uncertainty with respect to Medicare coverage by building upon the 
evidence foundation established during the market authorization process 
or combining that evidence with other approaches like CED to expedite 
coverage in appropriate instances.
    For CMS, the evidence base underlying the FDA's decision to approve 
or clear a device for particular indications for use has been crucial 
for determining Medicare coverage through the NCD process. CMS looks to 
the evidence supporting FDA market authorization and the device 
indications for use for evidence generalizable to the Medicare 
population, data on improvement in health outcomes, and durability of 
those outcomes. If there are no data on those elements, it is difficult 
for CMS to make an evidence-based decision whether the device is 
reasonable and necessary for the Medicare population.
    The current MCIT/R&N final rule does not specify any coverage 
criteria beyond the FDA indication(s) for use for which FDA has 
approved or cleared the device. The current final rule would provide 
coverage when a device is used according to approved or cleared 
indication(s) for use. A device's approved or cleared indications for 
use may not include information that is important or particularly 
relevant for Medicare patients and clinicians when making treatment 
decisions. With breakthrough devices, as mentioned by some commenters, 
the patients included in device studies generally are not Medicare 
beneficiaries who often have multiple comorbidities and higher acuity 
of illness.
    The data used to determine whether a device meets applicable FDA 
safety

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and effectiveness requirements for its approved or cleared 
indication(s) for use may not be able to answer questions such as the 
following:
     Does the benefit differ for older and/or frailer patients 
with specific comorbidities?
     Are clinician experience or facility requirements needed 
to ensure good health outcomes or to prevent certain harms in those 
patients?
    These guidelines and recommendations have often been part of NCDs, 
but were not included in the MCIT policy. When making NCDs, CMS 
sometimes develops clinician and institutional requirements after 
careful review of expert physicians' specialty society guidelines and 
clinical study results. Additional rulemaking may provide a further 
opportunity for the public to opine on whether these types of 
restrictions are needed when covering breakthrough devices.
    Comment: Manufacturers acknowledged the need to develop evidence to 
achieve long-term coverage, and many indicated their intent to develop 
real world evidence (RWE). Some stated that MCIT would incentivize 
manufacturers to develop RWE following market authorization and sought 
guidance from CMS on desired elements.
    Response: Whether evidence development is voluntary or required for 
coverage, we value manufacturer, CMS, and FDA coordination on RWE 
development for coverage and/or post-market studies. Establishing the 
RWE guidance sought by manufacturers and some physicians would be 
beneficial and that further stakeholder engagement would best inform 
the guidance. CMS has multiple pathways to facilitate engagement such 
as the Medicare Evidence Development and Coverage Advisory Committee 
(MEDCAC) and the public input process through the Federal Register. We 
are also receptive to informal engagement with stakeholders, including 
with manufacturers who pursue this evidence development approach. We 
are aware that best practices for RWE generation are in development by 
some stakeholders. However, when a device receives breakthrough 
designation by the FDA, there is currently no clinical study 
requirement for market-authorization that Medicare patients must be 
included. Without relevant Medicare data, including RWE, under the 
MCIT/R&N final rule, CMS may be covering devices with no data 
demonstrating that Medicare patients will not be harmed or will benefit 
from the device. Currently, when CMS sees a trend indicative of a 
potentially harmful device, we are sometimes able to deny coverage 
through Medicare Administrative Contractors. Under the MCIT/R&N final 
rule, this authority has been removed as we may only remove a 
breakthrough device from the MCIT coverage pathway for limited reasons, 
including if FDA issues a safety communication, warning letter, or 
removes the device from the market. Further, under the current final 
rule, if CMS is seeing a trend of higher risk specifically in the 
Medicare population, CMS' authority with respect to coverage for 
Medicare determinations is limited without an FDA action, which would 
not just take the Medicare population experience into account. That is, 
the FDA's review of devices is for the entirety of the intended patient 
population rather than within the narrower Medicare population.
    Comment: Some stakeholders continued to express concern that 
reliance on breakthrough designation ceded decision-making authority on 
what is reasonable and necessary for Medicare patients to an FDA 
decision very early in the product lifecycle. A number of physician 
commenters with experience in clinical evidence noted a number of 
compelling evidentiary concerns, including their assertion that the 
MCIT policy is flawed because of a lack of evidence that breakthroughs 
benefit Medicare beneficiaries. One manufacturer suggested that pivotal 
studies should have to demonstrate patient benefit in the Medicare 
population in order to obtain MCIT coverage.
    Response: The FDA criteria to determine whether a device is 
designated as a breakthrough is different from the criteria and 
evidence CMS reviews to determine appropriateness for the Medicare 
population. The FDA does not routinely require data on Medicare 
patients. The relevant data is key for Medicare national coverage 
decision-making to ensure that Medicare is paying for devices that are 
beneficial to Medicare patients. While the goal of the MCIT/R&N final 
rule was to expedite coverage to speed access to innovative treatments, 
the immediacy of coverage must be balanced with ensuring that the 
Medicare program is covering appropriate devices for the Medicare 
population. Without any data or minimal clinical data to make this 
determination, it is challenging to ensure that breakthrough devices 
are beneficial to the Medicare population. We will further consider 
public comments seeking modifications to MCIT that might allow for 
expedited coverage while seeking to ensure devices are safe for 
Medicare patients even when those breakthrough devices do not have an 
evidence base that is generalizable to Medicare beneficiaries.
    Comment: Medical specialty societies also sought modifications to 
the MCIT/R&N final rule regarding evidence development, specifically 
the addition of RWE requirements and a clarification of CMS' CED 
authorities. Commenters specifically recommended post market studies, 
data collection, and recommended CED as a potential pathway to address 
uncertainty in health outcomes. In lieu of MCIT, commenters recommended 
using the Parallel Review program for devices with a broad evidence 
base and a CED for devices with a developing evidence base.
    Response: We appreciate these comments and refer to our earlier 
responses addressing similar issues regarding evidence development and 
RWE-related comments. CED has been utilized for many years to allow 
beneficiary access while simultaneously fostering evidence development. 
The public comments suggest there is an interest in additional guidance 
on CED. Knowing where there are gaps in clinical evidence for a device 
or type of devices is a preliminary question asked and researched by 
CMS and FDA. This gap analysis with respect to the Medicare reasonable 
and necessary criteria is a precursor to CED parameters for a given 
item or service. We are aware that manufacturers are interested in more 
input from CMS on what evidence needs to be developed for coverage, 
including a discussion of the gap analysis. Based on the comments from 
manufacturers that indicated they were already developing or would 
develop evidence following market authorization, we believe there is 
also interest in coordination with CMS to create an evidence 
development plan that is fit-for-purpose in line with manufacturer 
coverage goals to ensure that Medicare patients are protected.
    Comment: Several health plans participating in Medicare Advantage 
(MA) and their advocacy associations submitted comments that raised 
concerns with the MCIT/R&N final rule. Associations specifically 
indicated that the final rule should be rescinded and not implemented. 
In general, they recommend post market data collection and use of 
existing coverage pathways. One health plan noted several concerns for 
the MA plans if the MCIT/R&N final rule is implemented specific to bids 
and plan payment rates and related downstream effects for beneficiaries 
such as increased out of pocket costs, fewer benefits, and perhaps even 
fewer plan offerings.

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    Response: There is not a substantive discussion on how the MCIT 
pathway would affect MA plans in the MCIT/R&N final rule. Under current 
law, MA plans are required to offer coverage of reasonable and 
necessary items and services covered under part A and part B on terms 
at least as favorable as those adopted by fee for service Medicare. CMS 
did not fully consider the MA effects in the MCIT/R&N final rule. 
Specifically, the cost implications for MA plans of blanket national 
coverage and all of the associated costs to the breakthrough device was 
not fully explored. For example, if a breakthrough device was 
implanted, Medicare would pay not just for the device, but also for the 
reasonable and necessary procedures and related care and services such 
as the surgery, and related visits to prepare for surgery and follow 
up. These non-device costs were not considered in the regulatory impact 
analysis (RIA).
    Comment: Some commenters noted that the MCIT/R&N final rule could 
potentially lead to increased fraud, waste and abuse. A commenter noted 
that, under the final rule, the current MCIT construct offering 
guaranteed Medicare payment for 3 to 4 years with broad-based coverage 
criteria and minimal limitations for a massive patient population is a 
strong scenario for fraud.
    Response: We believe the commenters are suggesting that the 
expanded coverage may encourage greater use of these devices than they 
believe is warranted. Because these determinations would depend on 
specific facts, CMS would follow its normal process in the event there 
was a concern of fraud or abuse.
    Comment: Another stakeholder raised concerns that the MCIT/R&N 
final rule as currently constructed only considers industry's 
perspective and does not take into account physician and patient 
perspectives. They further noted that for MCIT there is no established 
mechanism in place for those stakeholders to provide comments regarding 
their concerns about using these technologies on the Medicare 
population. To that end, they claim that the current MCIT/R&N final 
rule lacks the transparency and accountability found in the existing 
NCD and LCD processes.
    Response: We appreciate these comments. We acknowledge that the 
MCIT/R&N final rule as currently designed does not provide the same 
level of opportunities for public participation as stakeholders have 
become accustomed to with the established NCD and LCD processes where, 
for each item or service considered for coverage, stakeholders have an 
opportunity to comment.
    Comment: Regarding operational issues for MCIT, manufacturers 
commented that the existing processes in place for BCD, coding, and 
payment should work for MCIT, and that early coordination with CMS 
shortly after breakthrough designation should allow for time for these 
processes to play out. Commenters, including several manufacturers, 
recommended that CMS establish provisional codes and payment for 
breakthrough devices as part of the MCIT pathway to ensure availability 
of codes and payment at the time of FDA approval. They also recommended 
that CMS formalize an operational framework with a predictable timeline 
to conduct evidence reviews, develop benefit category determinations, 
codes, and payment.
    Response: We will take these suggestions under consideration for 
future rulemaking.
    Comment: Commenters indicated that the newly public information 
about the volume increase in the Breakthrough Device volume \2\ was not 
a concern and that it should not impede implementation of the MCIT/R&N 
final rule. Others stated that the RIA was sufficient because not all 
devices designated as breakthrough would ultimately achieve market 
authorization after the 4-year period. Still others believed the RIA 
was insufficient because they believe there would be more breakthrough 
devices market authorized than included in the estimate. In light of 
the increase in volume, a commenter suggested considering mechanisms, 
such as establishing user fees, to increase resources through dedicated 
appropriation or other mechanisms.
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    \2\ U.S. Department of Health and Human Services, Food and Drug 
Administration, Reflections on a Record Year for Novel Device 
Innovation Despite COVID-19 Challenges (Feb. 16, 2021), available at 
https://www.fda.gov/news-events/fda-voices/reflections-record-year-novel-device-innovation-despite-covid-19-challenges.
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    Response: We must take into consideration the number of possible 
devices that will be approved through the MCIT pathway. Further, under 
the MCIT/R&N final rule any breakthrough device that receives FDA 
market-authorization is potentially covered for any Medicare patient 
without evidence of its benefit generated in the Medicare population. 
Beyond limits in the indications for use for which FDA approves or 
clears a device, CMS does not have the authority under the finalized 
MCIT policy to further define clinical parameters to narrow or expand 
national coverage. In addition, all related care and services 
associated with the device are covered which could include additional 
visits and maintenance of the device. CMS did not factor these costs in 
the RIA. This analysis has an impact on ensuring there are sufficient 
resources for the program to run efficiently. As with any program, 
sufficient resources are key to efficient and timely operations.
    Comment: Most manufacturers commented that the patient protections 
in place in the final rule, specifically the reliance on FDA safety and 
efficacy requirements to grant coverage to breakthrough devices under 
MCIT, were sufficient to prevent beneficiary harm.
    Response: As finalized in the MCIT/R&N final rule, devices could be 
used on Medicare patients without any evidence of the devices' clinical 
utility in the Medicare population. To remove a device from Medicare 
coverage under MCIT, FDA must issue a safety communication, warning 
letter, or remove the device from the market. Under the MCIT/R&N final 
rule, if CMS observes a trend of higher risk, specifically in the 
Medicare population, CMS authority to deny coverage is limited. For 
example, if a CMS contractor (for example, a Medicare Administrative 
Contractor (MAC)) identifies a pattern or trend of significant patient 
harm or death related to an MCIT device, there is no procedure to 
quickly remove coverage for the device until and unless the FDA acts. 
We believe that the public should have an additional opportunity to 
comment on this policy.
    Comment: A commenter recommends that MCIT coverage could be offered 
to the class of the breakthrough device including device iterations and 
follow-on competitive devices. The commenter suggested that CMS direct 
an evidence review at the end of the 4 years of MCIT coverage for a 
particular device determine which coverage pathway would be most 
appropriate to ensure the most benefit to Medicare patients.
    Response: Clinical evidence development that includes Medicare 
beneficiaries is central to ensuring that Medicare patients are 
receiving optimal clinical care and minimizing risk when possible. 
While examining data on a group of similar breakthrough devices and 
identifying gaps in the evidence base may be a greater effort initially 
than the evidence review for one device, it could result in 
efficiencies across several components within CMS and inform coverage 
in a more comprehensive manner than MCIT, which is one device at a 
time. We will

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seek additional public comments on this topic when considering any 
proposed changes.
    Comment: Some stakeholders supported defining ``reasonable and 
necessary'' in regulation while others do not believe a codified 
definition is necessary. Commenters expressed concerns about 
transparency of commercial coverage polices and believed the rule could 
unnecessarily restrict coverage by relying on commercial insurer 
policies designed for a different population with different incentives. 
Furthermore, the majority of public comments from patient advocates, 
policy ``think tanks,'' health insurance advocates and manufacturers 
did not support including commercial insurer criteria in the 
definition. Most public comments noted that CMS can (and has) reviewed 
commercial policies in recent years as part of a national coverage 
analysis. Other commenters suggested separating and reissuing separate 
rules for the definition of ``reasonable and necessary'' and MCIT 
because they were viewed as too distinct.
    Response: We will consider this comment for future rulemaking.

C. Impracticability of Implementation by May 15, 2021

    As noted previously, many commenters on the March 2021 IFC 
supported delaying the MCIT/R&N final rule. Based upon the public 
comments expressing significant evidentiary concerns, we do not believe 
that it is in the best interest of Medicare beneficiaries for the MCIT/
R&N final rule to become effective May 15, 2021. Under the current 
rule, there no requirement for evidence that MCIT devices will 
specifically benefit the Medicare target population. Additionally, the 
final rule takes away tools the CMS has to deny coverage when it 
becomes apparent that a particular device can be harmful to the 
Medicare population. If the rule goes into effect, and a device is 
later found to be harmful to Medicare recipients is approved under the 
MCIT pathway, CMS would be limited in the actions it can take to 
withdraw or modify coverage to protect beneficiaries.
    As was noted by some commenters, early and unrestricted adoption of 
devices may have consequences that may not be easy to reverse. 
Commenters referenced publications that highlight the relationship 
between manufacturers and physicians and claimed that the potential for 
manufacturers to influence physician behavior will persist if coverage 
is guaranteed under MCIT. Guaranteed coverage under MCIT may further 
stimulate providers to adopt these technologies and could potentially 
lead to these technologies being prematurely viewed as standard of care 
which could adversely impact beneficiaries if a product does not 
ultimately receive Medicare coverage. Additionally, providers may make 
capital and capacity investments that could pose challenges to 
withdrawing coverage.
    A common theme among some commenters is that, under the MCIT/R&N 
final rule as currently written, the evidence used to support FDA 
clearance or approval of a breakthrough device is not generalizable to 
the Medicare population since the Medicare population is often not 
adequately represented in clinical trials. Commenters noted that 
existing Medicare coverage paradigms rely on careful consideration of 
the tradeoffs between benefits and risks for the Medicare population 
and adequate evidence that demonstrates improved health outcomes. 
Commenters expressed concerns that devices covered under MCIT would not 
achieve that standard. Additionally, commenters cited several published 
studies that noted that approval of many breakthrough devices relied 
upon intermediate endpoints which do not always translate into real 
world improved health outcomes. Multiple commenters also pointed out 
that a major limitation of the MCIT pathway under the MCIT/R&N final 
rule is that manufacturers are not required or incentivized to conduct 
clinical trials to generate additional evidence, and contended that it 
is unlikely that manufacturers will voluntarily choose to do so. 
Further, the shift of the burden of evidence development entirely to 
manufacturers undermines CMS' ability to support evidence development 
or establish the coverage criteria (for example, provider experience, 
location of service, availability of supporting services) that are 
central to delivery of high-quality, evidence-based care for devices 
with insufficient evidence of a health benefit for Medicare patients. 
An additional delay in the effective date would allow time for CMS to 
address the evidentiary concerns raised by stakeholders and consider 
how to better balance the needs of all stakeholders and beneficiaries 
in particular.
    Additionally, there is significant uncertainty surrounding coding 
and payment for new MCIT devices since these issues were not addressed 
in the MCIT/R&N final rule. If the MCIT/R&N final rule goes into 
effect, we believe there could be confusion and disruption stemming 
from devices receiving MCIT approval without a clear path for 
appropriate coding and payment. The delay will allow CMS time to ensure 
the public has a clear understanding of the pathways to coverage, 
coding, and payment.
    Further, the delay gives CMS time to evaluate stakeholders' 
recommendation of whether the reasonable and necessary definition 
should be a separate rule. There were a number of stakeholder comments 
supporting delaying defining ``reasonable and necessary'' in 
regulation. Commenters did not believe a codified definition was 
necessary or thought the rule could unnecessarily restrict coverage by 
relying on commercial insurer policies. Furthermore, the majority of 
public comments from patient advocates, policy think tanks, health 
insurance advocates and manufactures did not support including 
commercial insurer criteria in the definition. Most public comments 
noted that CMS can (and has) reviewed commercial policies in recent 
years as part of a national coverage analysis.
    Future rulemaking will provide an opportunity for us to fully 
consider the significant objections to the rule, and will provide 
another opportunity for the public to present contrary facts and 
arguments.

II. Provisions of the Final Rule

    This final rule would further delay the effective date of the MCIT/
R&N final rule until December 15, 2021, to provide CMS an opportunity 
to address all of the issues raised by stakeholders, especially 
Medicare patient protections, evidence criteria and lack of 
coordination between coverage, coding and payment as noted previously. 
During the delay, we will determine appropriate next steps that are in 
the best interest of all Medicare stakeholders, and beneficiaries in 
particular.
    This final rule delays the effective date of the January 2021 MCIT/
R&N final rule as specified in the DATES section of this final rule.

III. Waiver of the 30-Day Delay in Effective Date

    The Administrative Procedure Act, 5 U.S.C. 553(d), and section 
1871(e)(1)(B)(i) of the Act usually require a 30-day delay in effective 
date after issuance or publication of a rule, subject to exceptions. 
The purpose of the 30-day delay is to allow the public to prepare to 
implement the new final rule. We find good cause to waive the 30-day 
delay in the effective date because the further extension will maintain 
the status quo, so the public does not need notice to adjust their

[[Page 26854]]

behavior as a result of the additional delay. Moreover, allowing the 
prior rule to go into effect would defeat the purpose of the delay rule 
and result in the same difficulties that were identified regarding 
reversing course once the rule was in place and would be contrary to 
the public interest.

    Dated: May 13, 2021.
Xavier Becerra,
Secretary, Department of Health and Human Services.

I, Elizabeth Richter, Acting Administrator of the Centers for Medicare 
& Medicaid Services, Approved This Document on May 12, 2021

[FR Doc. 2021-10466 Filed 5-14-21; 4:15 pm]
BILLING CODE 4120-01-P