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Federal Register / Vol. 86, No. 9 / Thursday, January 14, 2021 / Rules and Regulations
includes making coverage of breakthrough medical devices widely available, consistent with the principles of patient safety, market-based policies, and value for patients. 3 The E.O. also directs the Secretary to clarify the application of coverage standards. 4
Consistent with these directives, we proposed to create a new coverage pathway for breakthrough devices, which we are calling Medicare Coverage of Innovative Technology MCIT. This pathway will accelerate the coverage of new, innovative breakthrough devices to Medicare beneficiaries. We also proposed to codify the term reasonable and necessary to provide greater certainty to stakeholders seeking coverage for innovative items and services and to ensure that this substantive legal standard is codified.
The MCIT coverage pathway is specifically for Medicare coverage of devices that are designated as part of the Food and Drug Administrations FDA
Breakthrough Devices Program hereafter referred to as breakthrough devices and are FDA market authorized. FDAs Breakthrough Devices Program is for certain medical devices, device-led combination products, and can include lab tests.5 The MCIT
pathway would be voluntary and device manufacturers would notify CMS if they want to utilize this coverage option.
We proposed that National Medicare coverage under the MCIT pathway could begin immediately upon the date of FDA market authorization that is, the date the medical device receives Premarket Approval PMA; 510k clearance; or the granting of a De Novo classification request for the breakthrough device or on the date designated by the manufacturer within any point during the four year eligibility period for coverage under MCIT. This coverage can occur unless the device does not have a Medicare benefit category or is otherwise excluded from coverage by statute that is, the Medicare statute does not allow for coverage of the particular device. This coverage pathway delivers on the Administrations commitment to give Medicare beneficiaries access to the newest innovations on the market, consistent with the statutory definitions of Medicare benefits. Because Medicare is a defined benefit program, devices that do not fit within the statutory definitions may not be considered for MCIT. As an example, medical 3 Id.
4 Id.

and Drug Administration, Breakthrough Devices Program Guidance for Industry and Food and Drug Administration Staff, available at: https
www.fda.gov/media/108135/download.

equipment for home use by the beneficiary must be durable that is, withstand repeated use for it to be coverable by Medicare as defined in statutes and regulations by the Secretary.
The Secretary has authority to determine whether a particular medical item or service is reasonable and necessary under section 1862a1A
of the Act. See Heckler v. Ringer, 466
U.S. 602, 617 1984. When making coverage determinations, our policies have long considered whether the item or service is safe and effective, not experimental or investigational, and appropriate. For more information see the January 30, 1989 notice of proposed rulemaking 54 FR 4307. These factors are found in Chapter 13 of the Medicare Program Integrity Manual PIM at section 13.5.4Reasonable and Necessary Provisions in LCDs as instructions for Medicare contractors.6
We proposed to codify in regulations the Program Integrity Manual definition of reasonable and necessary with modifications, including to add a reference to Medicare patients and a reference to commercial health insurer coverage policies. We proposed that an item or service would be considered reasonable and necessary if it is1
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 patients condition or to improve the function of a malformed body member;
Furnished in a setting appropriate to the patients medical needs and condition;
Ordered and furnished by qualified personnel;
One that meets, but does not exceed, the patients medical need; and At least as beneficial as an existing and available medically appropriate alternative.
We also proposed that an item or service would be appropriate for Medicare patients under 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. An item or service deemed appropriate for Medicare coverage based on commercial coverage would be
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covered on that basis without also having to satisfy the previously listed bullets. We believed this definition would be a significant step in meeting the E.O.s discussion of the need to bring clarity to coverage standards.
Stakeholders have expressed interest in codifying a definition of reasonable and necessary for many years.
A. Statutory Authority As stated in the previous section, we proposed to codify the PIMs definition of reasonable and necessary with a modification to the appropriateness factor to allow CMS to refer to commercial coverage. We will finalize in regulation the factors we have historically used in making reasonable and necessary determinations under section 1862a1A of the Act, with a modification, discussed below, to factor 3 to determine whether an item or service is appropriate based, in prescribed circumstances, on coverage in the commercial market. In general, this section of the Act permits Medicare payment under part A or part B for any expenses incurred for items or services that are reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. Thus, with some exceptions, section 1862a1A
of the Act requires that an item or service be reasonable and necessary to be covered by Medicare. The courts have recognized that the Secretary has significant authority to determine whether a particular item or service is reasonable and necessary, and that the statute affords broad discretion to interpret this term Heckler v. Ringer, 466 U.S. 602, 617 1984. See also, YaleNew Haven Hospital v. Leavitt, 470 F.3d 71, 84 2d Cir. 2006; Kort v. Burwell, 209 F. Supp. 3d 98, 110 D. D.C. 2016
The statute vests substantial authority in the Secretary. In regard to the MCIT
coverage pathway, we proposed national Medicare coverage for breakthrough devices that are FDA
market-authorized and used consistent with the FDA approved or cleared indication for use also referred to as the FDA-required labeling.7 This device coverage under the MCIT pathway is reasonable and necessary for a duration of time under section 1862a1A of the Act because the device has met the very unique criteria of the FDA
Breakthrough Devices Program.
7 FDA Guidance for Industry, Medical Product Communications That Are Consistent With the FDA-Required LabelingQuestions and Answers, available at https www.fda.gov/media/133619/
download.

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