CMS's New TCET Pathway Expedites Medicare Coverage for FDA Breakthrough Devices

On August 12, 2024, CMS published a final notice describing the TCET pathway, its new approach to provide a streamlined pathway to Medicare coverage for certain devices designated by FDA as breakthrough devices. 

Eligibility

Eligibility for the TCET pathway is limited to devices that are: (i) designated by FDA as breakthrough devices; (ii) determined to be within a Medicare benefit category; (iii) not already the subject of an existing Medicare NCD; and (iv) not otherwise excluded from coverage through law or regulation.

FDA may grant a breakthrough device designation for a device that provides more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions, and meets at least one of the following criteria: the device represents a breakthrough technology; no approved or cleared alternatives exist; the device offers significant advantages over existing approved or cleared alternatives; or the device availability is in the best interest of patients. See 21 U.S.C. § 360e–3(b)(2). Because many digital health technologies do not fall under an existing Medicare benefit category, these products do not qualify for the TCET pathway. While in vitro diagnostic products, or IVDs, such as diagnostic laboratory tests are not excluded, CMS states that the majority of coverage determinations for breakthrough-designated diagnostic laboratory tests will continue to be made by Medicare Administrative Contractors ("MACs"). 

Letters of Intent and Nominations 

Manufacturers can submit a non-binding letter of intent to nominate a potentially eligible device approximately 18 to 24 months before the manufacturer anticipates FDA marketing authorization. Then, formal nominations are considered approximately 12 months prior to FDA marketing authorization. CMS will offer an initial meeting with the manufacturer within 20 business days of receipt of a submitted nomination and may coordinate with FDA to learn more about the device. Nominations not accepted in the first quarter will be automatically considered in the subsequent quarter; however, nominations anticipated to receive an FDA decision on market authorization within six months may not be accepted, as CMS would be unable to reach a final NCD within the expedited timeframe. CMS plans to respond to TCET nominations on a quarterly basis and to accept up to five candidates annually. While the agency intends to publish proposed factors for how it will prioritize nominations soon, in the meantime, it will prioritize requests based on "the magnitude of the potential impact on the Medicare program and its beneficiaries and staffing resources." 

Evidence Preview and TCET NCD 

Following a nomination's acceptance into the TCET pathway, CMS will initiate an Evidence Preview ("EP"), a systematic literature review to provide early feedback on the strengths and weaknesses of publicly available evidence for the device. CMS will share the EP with the manufacturer before finalizing it. Once the EP is finalized, a manufacturer may pursue national coverage or withdraw from the TCET pathway. If a manufacturer withdraws, CMS will publish an evidence summary without a gap analysis. 

If a manufacturer pursues national coverage under the TCET pathway, they will then need to submit a formal NCD request cover letter requesting that CMS open a TCET NCD analysis. If CMS or the Agency for Healthcare Research and Quality ("AHRQ") identifies evidence gaps during the EP, the manufacturer should also submit to CMS an evidence development plan ("EDP") addressing the identified gaps, which may include fit-for-purpose ("FFP") study designs, including traditional clinical study designs, as well as those that rely on secondary use of real-world data. CMS intends to propose FFP study guidance in the future. CMS will review a submitted EDP in collaboration with AHRQ. 

If a device accepted into the TCET pathway receives FDA market authorization, CMS will initiate the NCD process by posting a tracking sheet, pending a CMS and AHRQ-approved EDP. CMS aims to have a finalized EDP no later than 90 business days after FDA market authorization. The agency will issue a proposed TCET NCD and EDP within six months of opening the NCD, and aims to release the proposed and final NCD before the statutory deadline applicable to all NCDs. The duration of transitional coverage through the TCET pathway will be tied to the approved EDP but CMS generally anticipates the transitional coverage period may last for five or more years, as evidence is generated to address evidence gaps. The agency plans to initiate an updated evidence review within six calendar months of the review date specified in the EDP. 

Criticism 

Some commenters on CMS's proposed notice critiqued the proposal as limited in scope and not going far enough, due in part to its limitation to only certain FDA-designated breakthrough devices that fit within a Medicare benefit category. CMS pushed back on this criticism in the final notice, saying it believes it would be inappropriate to grant all FDA market-authorized breakthrough devices automatic coverage based on that designation, as there is often limited evidence regarding the clinical benefit to Medicare patients at the time of authorization. Therefore, CMS underscored the importance of developing evidence generalizable to the Medicare population to benefit patients, caregivers, treating physicians, and payors.