On September 15, 2021, CMS published a proposed rule to repeal the Medicare Coverage of Innovative Technology (MCIT) and Definition of “Reasonable and Necessary” Final Rule (“MCIT/RN Rule”), which was published on January 14, 2021 and was set to take effect on December 15, 2021.  The MCIT/RN Rule would have created a pathway to provide nationwide Medicare coverage for medical devices simultaneous to a device’s receipt of market authorization under FDA’s Breakthrough Devices Program; Medicare coverage would have lasted for a period of four years after which a breakthrough device would either be covered through a National Coverage Determination or at the local-level by Medicare Administrative Contractor discretion.  The MCIT/RN Rule was intended to address concerns that delay or uncertainty around Medicare coverage hampered beneficiary access to innovative technologies.  Digital health technologies that are eligible for breakthrough designation and fall within a Medicare benefit category would have been eligible for the MCIT pathway.

In deciding to repeal the MCIT/RN Rule, CMS identified that FDA and CMS are guided by different statutory standards: FDA must determine whether a device is safe and effective, and CMS must determine whether a device is reasonable and necessary for the diagnosis or treatment of illness or injury.  CMS explained that accelerated coverage for breakthrough devices would result in inadequate evidence that the device is reasonable and necessary.  In particular, CMS noted its concern that FDA regulations do not require clinical studies to include Medicare beneficiaries and as a result, MCIT might result in coverage of devices that do not have data demonstrating reasonableness and necessity for Medicare patients.

More information about the proposed repeal can be found here: LINK

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Photo of Rujul Desai Rujul Desai

Rujul Desai advises clients on drug pricing, market access, reimbursement, strategic contracting, and regulatory solutions for drugs, biologicals, devices, and diagnostics. He brings deep experience with biopharma, specialty pharmacy, and pharmacy benefit management (PBM) companies.

Rujul has held a number of leadership roles…

Rujul Desai advises clients on drug pricing, market access, reimbursement, strategic contracting, and regulatory solutions for drugs, biologicals, devices, and diagnostics. He brings deep experience with biopharma, specialty pharmacy, and pharmacy benefit management (PBM) companies.

Rujul has held a number of leadership roles in the biopharma, PBM, and specialty pharmacy industry, including with CVS Caremark, UCB, and most recently as Vice President at Avalere Health. He has led engagements across a wide range of U.S. and global market access and reimbursement issues, including optimizing new product launches, pricing, PBM and payer formulary access, value-based contracting, distribution network design, patient access and hub services, affordability programs, e-prescribing, digital health, and the use of health economic data and modeling.

Photo of Sanchi Khare Sanchi Khare

Sanchi Khare is an associate in the Washington, DC office, where she practices in the firm’s Health Care Practice Group. She counsels clients on regulatory issues under federal health care programs.

Photo of Kristen Gurley Kristen Gurley

Kristie Gurley advises pharmaceutical and biotechnology companies on marketing authorization and market access issues, including with respect to product development, product approval and launch, pricing and reimbursement activities, advertising and promotion, payer communications, value-based contracting, and related areas. Kristie routinely advises on regulatory…

Kristie Gurley advises pharmaceutical and biotechnology companies on marketing authorization and market access issues, including with respect to product development, product approval and launch, pricing and reimbursement activities, advertising and promotion, payer communications, value-based contracting, and related areas. Kristie routinely advises on regulatory compliance and enforcement risk, commercial transactions, and administrative and legislative policy opportunities.