United States: Congress Responds To The Proposed Transitional Coverage For Emerging Technologies Medicare Pathway – Arnold & Porter

Congress has been closely following both the Trump and Biden
administration’s proposals for Medicare coverage for Food and
Drug Administration (FDA)-designated breakthrough devices. The
Trump Administration’s approach, Medicare Coverage for Innovative Technology
(MCIT), would have afforded devices with breakthrough
designation immediate transitional national coverage upon marketing
(or a date specified by the manufacturer) for four years, and it
enjoyed widespread support among manufacturers and many members of
Congress. Transitional Coverage for Emerging Technologies
(TCET), the Biden administration’s proposed replacement
after repealing MCIT in 2021, while not yet final, is less robust
and has enjoyed a cooler reception on Capitol Hill thus far,
particularly among Republicans. Coverage under the proposed TCET
pathway would not be immediate. Instead, it would build off the
Medicare national coverage determination (NCD) process and Coverage
with Evidence Development (CED), and involve three stages: (1)
premarket, (2) coverage under the TCET pathway, and (3) transition
to post-TCET coverage. Additional coverage of the differences
between the two pathways can be found in our previous Advisory.

In between the repeal of MCIT and the recent TCET proposal,
Congress has introduced several pieces of bipartisan legislation
that would have effectively codified the MCIT rule, and on July 18,
less than a month after the Centers for Medicare & Medicaid
Services (CMS) issued its procedural notice with comment period,
House Energy and Commerce Committee Chair Cathy McMorris Rodgers
(R-WA) and Health Subcommittee Chair Brett Guthrie (R-KY) held a
Health Subcommittee hearing focused primarily on the need for a
more reliable coverage pathway for breakthrough devices.

During the hearing, Chair McMorris Rodgers acknowledged that
CMS’ TCET notice contains “some good” but voiced
concerns that it will lead to uncertainty for patients and doctors.
She noted provisions from the MCIT rule could be used to strengthen
the TCET proposal. Health Subcommittee Chair Guthrie took a harsher
stance, saying that failing to provide reliable coverage under the
Medicare program for breakthrough medical devices and technologies
will significantly stifle innovation. He voiced particular concern
with the proposal’s limit on the number of devices (five) that
can use the pathway and its prolonged process for providing
Medicare coverage compared to MCIT, questioning whether device
makers will be motivated to pursue such a path. Members of the
committee also criticized the widening gap between authorizations
made by the FDA and CMS’ coverage policies.

Many of the witnesses testifying before the Health Subcommittee,
including Dr. Todd Brinton, Corporate Vice President and Advanced
Technology Chief Scientific Officer at Edwards Lifesciences, Dr.
Lishan Aklog, Chairman and CEO of PAVmed Inc., and Dr. Brian
Miller, a non-resident fellow with the American Enterprise
Institute, also criticized the proposal. They said it lacks
specific criteria on how CMS will select candidates eligible for
the pathway, creates a system akin to a lottery due to the limited
number of candidates accepted each year, and disproportionately
hurts devices targeted for rare diseases, with CMS aiming to choose
candidates that benefit a broad Medicare population. In his written
testimony, Dr. Miller called the proposal “a band-aid applied
to a dysfunctional and broken technology assessment process at
CMS,” and offered transparency and regular opportunity for
public input as potential ways to improve the proposal.

In June 2021, Congress responded to MCIT’s repeal with the
Ensuring Patient Access to Critical Breakthrough Products Act
(reintroduced this Congress as H.R. 1691), a bipartisan bill that would
provide Medicare coverage for FDA-designated breakthrough products
for four years, during which CMS would determine permanent
coverage. The bill would also provide temporary coverage for
certain breakthrough devices, like digital therapeutics, that did
not exist or were not considered when Medicare was first created. A
broader piece of bipartisan legislation from the 117th Congress,
Cures 2.0 (H.R.6000), also included similar language, though the
bill has yet to be reintroduced this Congress.

While the Ensuring Patient Access to Critical Breakthrough
Products Act, under joint jurisdiction of the House Energy and
Commerce and the House Ways and Means Committees, has bipartisan
support in the House and faced little scrutiny during Energy and
Commerce’s Health Subcommittee hearing, other bills attempting
to codify Trump-era rules have received significant pushback from
Energy and Commerce Democrats this Congress. While the bill has 29
Democratic cosponsors, the fact that CMS, under the Biden
administration, has weighed in with its TCET proposal may temper
their enthusiasm. Further, the bill’s yet-to-be-announced
budgetary effects, expected to be substantial but yet to be
formally calculated by the Congressional Budget Office, could also
hurt its prospects.

To date, there is no Senate companion of the Ensuring Patient
Access to Critical Breakthrough Products Act. Its outlook in the
chamber is uncertain. Medical device innovation has not been among
Senate Majority Leader Chuck Schumer’s (D-NY) top health care
priorities. Instead, he has been primarily interested in lowering
prescription drug costs through increased price transparency,
particularly among pharmacy benefit managers and legislation that
would cap the cost of insulin in commercial insurance markets. That
focus means that further activity in this space is likely to
continue to be driven by the House, though it will be competing for
members’ attention to other more urgent priorities, namely
funding the government and reauthorizing a host of critical
programs, when Congress returns from its August break.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.