Medical Device Industry Leaders Discuss the Latest Developments to Support Expanded Reimbursement

by | Sep 29, 2023 | Alliances, Education, Fogarty Innovation

Key factors that drive success for startups include a brilliant innovation, creative engineering, a strong leadership team and a sound regulatory strategy. What can often be overlooked until it’s too late is that without a path to reimbursement, a device is unlikely to gain traction. 

That’s why there has been so much interest in understanding and responding to the Centers for Medical and Medicaid Services’ (CMS) Transitional Coverage for Emerging Technologies (TCET) proposal, which was released in June. 

At a recent Lunch and Learn, Fogarty CEO Andrew Cleeland and guests Mark Leahy, MDMA president and CEO and Fogarty board member; Dan Waldmann, MDMA executive vice president, health policy and reimbursement and Jessica Holmes founder and principal of Regency Market Access Consulting, sought to provide context about the real-world implications of TCET. They discussed the major themes, both positive and negative, of the proposal, MDMA’s advocacy on behalf of TCET and what it means for companies today.

“While there has been much discussion regarding its tremendous potential, we need to inject some reality into our understanding,” Andrew said. “We all realize this is an area of significant concern for any company, particularly any small company, given how challenging it is to receive funding absent a clear pathway forward from a reimbursement perspective, which is why there is so much effort dedicated to streamlining this process.” 

Voicing Support for Progress Made

Andrew kicked off the event with a brief history, explaining that, previously, one of a startup’s largest hurdles was FDA approval. Through many years of cultivation, the medtech industry has been able to work with the FDA to develop improved clarity around agency requirements and timelines. 

“Along with Josh Makower, Mark Deem and Tom Fogarty, Mark Leahey played a significant role in establishing the relationship with the FDA and getting us to where we are today,” Andrew said.  He added that a similar effort is needed on this next key step – accelerating access for patients by streamlining the reimbursement pathway. He cited research Josh and others at Stanford Byers Center for Biodesign recently published in JAMA that illuminates the current five+ year gap between market authorizations and getting reimbursement in place

While the Medicare Coverage of Innovative Technology (MCIT) rule had offered a ray of hope, it proved to be impractical. TCET represents the next attempt at a solution.  

AC: Mark, what has the progress been to date for startups aiming to gain market access? 

ML: Because of our work building relationships with the FDA, we now have more predictability and guideposts along the way and innovators are benefitting from the fact that there’s a single entity making decisions. Conversely, on the reimbursement front, there are multiple agencies and insurers, including CMS, local Medicare contractors, private insurance companies and the AMA, which creates a much more complex landscape. It’s critical to ensure that both market authorization and the coverage, coding and payment are in place to truly achieve patient access.

That was the impetus for conversations with CMS about narrowing the gap between FDA authorization and coverage, coding and payment, with the expectation that putting something in place would help encourage private payors to follow. And while progress has been made, there isn’t yet a “magic elixir” on the horizon. 

AC: Dan, can you share what TCET is in a nutshell and some of the gaps that still need to be filled?

DW: There have been several formal comment processes and public town hall meetings centered around MCIT and TCET. Throughout this process, the vast majority of responders, who came not only from industry but also provider groups and patient advocates, have consistently advocated for a robust program that provides transitional coverage for novel technologies that currently don’t fit an existing pathway. They recognized the parts of MCIT that Andrew aptly described as impractical, while confirming the important role CMS had to play in actually performing these reviews. In addition to the comments, a number of organizations, publications, policy experts and more have made recommendations in the same vein.

That has led to the proposal of TCET, which unlike MCIT, is not a regulation, but a sub-regulatory program that’s being implemented through guidance documents. This has its positives and negatives: While it gives the agency more flexibility, it also doesn’t bind the agency to anything, which means there’s less predictability in the coverage process than we were hoping for. 

Right now, we’re responding to this proposal with the goal of implementing the positive elements as quickly as possible and building on them. The short answer is that we don’t think this proposal alone is enough to make a meaningful dent in the delay that Medicare beneficiaries often experience trying to access new technologies, and there are still disincentives to funding innovation in the medical technology space.

However, we see some positives, including the fact that CMS is recognizing the problem and that they need to take steps to address the delays. They realize their physicians need access to technologies that have been reviewed by the FDA and found to be safe and effective and therefore authorized for marketing. Yet once they’re on the market, there are still barriers to patient access, which creates a disincentive to innovation. 

To help address this, we should be trying to create more engagement between manufacturers and CMS earlier in the process in order to achieve more clarity, with the implicit goal being agreement between CMS and a manufacturer about what the evidentiary requirements are and how they will be met. So it will be more like the FDA approval process, which has clearly understood requirements that startups can work towards.

AC: Mark, if you had to summarize your impressions, what would you say?

ML: To underscore, we believe the policy has to incentivize innovators, like those who are with us today, to go after the higher-impact opportunities that will really benefit patients. As it currently stands, CMS is only offering five slots annually for new technologies of the highest impact to be reviewed and considered for TCET designation. And that’s not just for small companies—all the major players are also aiming for those slots as well. It’s still an open question as to what the criteria is for what makes an innovation of the highest impact and therefore eligible for review, whether this designation is related to highest medical impact, highest spend in Medicare, highest number of Medicare beneficiaries impacted, etc. By obtaining more clarity, we all will benefit.

AC: Jessica, where are you seeing optimism?

JH: Given CMS’s tendency to phase certain things in and out, this might be an opportunity for them to use the program to “kick the tires.” If TCET works in the capacity they’re exploring, I think the argument can be made to expand on that program. When this first popped up, we had conversations with Mark and his team, and I’m hearing that they believe there is enough good in this to try and partner with CMS to make this work. 

DW: Just to add to that, yes, that’s our sense. We know the current Coverage with Evidence Development (CED) is important and we want to improve it, but we also think there’s a big opportunity to go about getting there with CMS. We shouldn’t hold up on improving CED, trying to get to perfect, but we understand we’re going to have to get there over time. 

AC: This has been a great perspective to hear that, while it’s not solving all the problems we had hoped for, it’s moving in the right direction. Mark, would you agree?

ML: I think that’s true. Ultimately if we want permanency, it’s probably a multi-year process, which candidly, I think will require bipartisan legislation by Congress in order to have a program that’s durable and can transcend administrative changes or political priorities. As Dan said, if they create something through guidance, they can take it away through guidance, as well. To attain that durability component, we’re going to need something that’s well thought out and expands the scope, but doesn’t open up the barn door. 

The first step is to lay the groundwork, and as we all know, oftentimes this is a decade-long process. The goal must be to help an early-stage innovative technology company not only generate interest and collect the necessary investment, but ultimately to navigate the existing reimbursement gap. For the small startup, it’s a question of sustainability, while for a large multinational, it’s a question of profitability. There are ways we can help personalize the issue that hopefully will spur legislators to act and move this across the finish line.

  • Search by category: