Wednesday, August 7, 2024

Medicare Finalizes TCET - Transitional Coverage for Emerging Technologies

 Header:  The Trump administration granted 4 years coverage to FDA breakthrough devices - the Biden administration walked that back (in 2021).  On August 7, 2024, CMS released its final plan for "TCET" - Transitional Coverage for Emerging Technologies.

##

CMS released a very long, detailed FAQ for TCET (2400 words):

https://www.cms.gov/newsroom/fact-sheets/final-notice-transitional-coverage-emerging-technologies-cms-3421-fn#:~:text=CMS'%20Transitional%20Coverage%20for%20Emerging,manufacturers%20who%20create%20innovative%20technologies

CMS also made the final rule available in "inspection copy," or "typescript" form.  See the Fed Reg publication on August 12. 108pp.

https://www.federalregister.gov/public-inspection/2024-17603/medicare-program-transitional-coverage-for-emerging-technologies

Basically, it's promised to be an accelerated form of what had been known as - and very, very rarely used - parallel review.  TCET usage will be 5 per year, or less.

click to enlarge; inspection copy p 105

Parallel review was too fast to be a good fit to Coverage with Evidence Development planning.  Here, around the time of FDA approval, CMS and the company review an Evidence Development Plan.  (Note - this almost seems to presume the product can't survive without "CED" guardrails.)  The NCD will be issued (probably with CED) as soon as possible but months after FDA approval.

Downstream, CMS promises to finish review evidence packages within 6 months of their submission under CED.

They note that just because a product is an FDA BT product, doesn't mean it has to apply via the TCET rules.  It can also apply for a standard, plain-old NCD as before this rule came out. 

###
Economics of CED

You rarely see a discussion of the economics of CED, but it works much better with high cost, high margin products.   Consider a $50,000 drug.   $5000 to manufacture, $3000 per patient per trial for management, gross margin is $42,000 per reimbursement.

Now pivot to a $100 genetic test.  $50 to manufacture.  $300 per patient per trial for management, gross margin is NEGATIVE -$2950.   I have never heard a CMS speaker who seemed to "get it" or be remotely aware of this policy aspect of CED.

###

I'd rather that companies have the legislative fix, HR 1691 - discussion here. Which also includes features like flexibility in benefit categories.

###

Analyst's view:



###

MolDx is mentioned a dozen times, mostly after TCET indicated it wasn't primarily for diagnostics.


##


##
  • Legal eagles will note the whole TCET structure - in sharp contrast to the Trump MCIT  plan - depends on CED.  
    • Some have argued CED isn't legal (here).   
    • House Republicans have threated to defund AHRQ (here).  
    • CED has also been a catastrophe from an equity/access viewpoint (here).
##

AI Corner

Summary of TCET Program Mechanics

The Transitional Coverage for Emerging Technologies (TCET) pathway is designed to expedite Medicare coverage for certain FDA-designated Breakthrough Devices, providing timely and predictable access to new medical technologies for Medicare beneficiaries. Here is a breakdown of the mechanics of the TCET program:

  1. Eligibility Criteria:

    • FDA Breakthrough Designation: The device must be designated as a Breakthrough Device by the FDA.
    • Medicare Benefit Category: The device must fall within a Medicare benefit category.
    • No Existing NCD: The device should not already be the subject of an existing National Coverage Determination (NCD).
    • Not Excluded by Law or Regulation: The device must not be excluded from coverage through existing laws or regulations.

  2. Nomination Process:

    • Self-Nomination: Manufacturers of eligible Breakthrough Devices may self-nominate for the TCET pathway.
      • Letter of Intent: Manufacturers should submit a non-binding letter of intent 18 to 24 months before anticipated FDA marketing authorization.
      • Quarterly Review: CMS reviews nominations quarterly. If a nomination is not accepted in the first review, it is automatically reconsidered in subsequent quarters without needing resubmission.

  3. Coverage Process:

    • Evidence Preview (EP): An initial focused literature review to identify the strengths, weaknesses, and evidence gaps of the device. This review is conducted by a contractor using standardized methods.
    • Evidence Development Plan (EDP): Developed by the manufacturer to address identified evidence gaps, including traditional clinical study designs or fit-for-purpose studies using real-world data.
    • CMS and AHRQ Collaboration: The EDP is evaluated by CMS in collaboration with the Agency for Healthcare Research and Quality (AHRQ) to ensure it meets scientific standards and is relevant to the Medicare population.

  4. National Coverage Determination (NCD):

    • Initiation: CMS initiates the NCD process following FDA marketing authorization and an approved EDP.
    • Timeline: CMS aims to finalize the NCD within six months after FDA market authorization.
    • Transitional Coverage: Coverage under the TCET NCD continues until sufficient evidence is generated to inform long-term coverage decisions, generally expected to last around five years.

  5. Evidence Development:

    • Fit-for-Purpose Studies: Manufacturers are encouraged to conduct studies tailored to address specific evidence gaps.
    • Interim Reporting: Interim reports ensure progress and disclose any significant changes to study protocols.

  6. Transition to Post-TCET Coverage:

    • Updated Evidence Review: Within six months of the review date specified in the EDP [e.g. the manufacturer submits 2 year data per its EDP], CMS conducts an updated evidence review.
    • NCD Reconsideration: Based on the updated review, CMS may propose an NCD without any evidence development requirements.  
      • Or, CMS may revise the NCD for continued evidence development, a non-coverage NCD, or rescind the NCD, defaulting to local coverage decisions by Medicare Administrative Contractors (MACs).

Accelerated NCDs Without Evidence Development

While the TCET pathway provides a structured process for coverage and emphasizes evidence development to address gaps, it does not explicitly guarantee accelerated NCDs without any evidence development. The pathway is designed to ensure that even breakthrough technologies have robust evidence to support their benefits for the Medicare population. Coverage with no evidence development is generally not the norm under TCET, as the goal is to balance innovation with ensuring safety and efficacy for beneficiaries.

For a detailed exploration and the specific language, you can refer to the TCET documentation, particularly the sections detailing the NCD process and evidence development framework.

Does the document(s) mention any special consideration of diagnostics?

Special Consideration of Diagnostics in the TCET Program

The TCET pathway considers diagnostic laboratory tests, particularly those granted Breakthrough Device status by the FDA, but these are generally subject to review and coverage determination by Medicare Administrative Contractors (MACs) rather than through a national coverage determination (NCD) by CMS. 

Here are the key points related to diagnostics:

  1. General Coverage Pathways:

    • MAC Review: CMS has delegated the review of many diagnostic laboratory tests to specialized MACs. This includes those tests that fall under the Molecular Diagnostic Services (MolDx) Program.
    • Local Coverage Determinations (LCDs): Many coverage determinations for diagnostic laboratory tests, including those with Breakthrough Device designation, are made through LCDs developed by MACs. LCDs govern only within the MAC’s jurisdiction and are not controlling for other contractors or administrative law judges .

  2. In Vitro Diagnostics (IVDs):

    • The definition of medical devices under the Federal Food, Drug, and Cosmetic Act includes in vitro diagnostic (IVD) products, such as diagnostic laboratory tests. These are a highly specific area of coverage policy development, and most coverage determinations for FDA-designated Breakthrough IVDs are expected to continue under existing MAC pathways .
    • CMS acknowledges that there may be instances where an NCD is appropriate for a diagnostic laboratory test, and manufacturers can discuss options with CMS if additional evidence generation is needed to meet the Medicare coverage standard .

  3. Public Comments and Responses:

    • Commenter Concerns: Some commenters disagreed with CMS’s approach, noting that diagnostic tests are subject to the same rules as other medical devices and should not be excluded from TCET eligibility. 
    • They argued that excluding diagnostics from TCET could limit physician options and delay access to innovative tests .
    • CMS Response: CMS appreciates these comments but maintains that most Breakthrough-designated diagnostic laboratory tests will continue to be reviewed by MACs. 
      • However, CMS is open to discussions for specific cases where an NCD might be more appropriate .

  4. MolDx Program:

    • The MolDx program reviews molecular diagnostic tests and other molecular pathology services within certain jurisdictions. 
    • Critics pointed out that MolDx is not a national program and does not cover non-molecular tests or clinical laboratories outside its jurisdiction. Additionally, MolDx cannot impose Coverage with Evidence Development (CED) requirements.
      • To which CMS answered, thanks for sharing.

In summary, while the TCET pathway does consider diagnostics, most Breakthrough-designated diagnostic laboratory tests will continue to have their coverage determined by MACs through existing pathways. CMS acknowledges potential cases for NCDs and is open to discussions with manufacturers regarding evidence development and coverage options .