On October 31, FDA will be offering a webinar on its proposed rule ”Medical Devices; Laboratory Developed Tests.”

This webinar comes about a month after FDA issued a proposed rule revising 21 C.F.R. Part 809 (specifically, 21 C.F.R, § 809.3) to state, explicitly, that in vitro diagnostics (IVDs) are medical devices, even if they are developed and manufactured in a laboratory setting.

This category of tests is generally referred to as “laboratory developed tests” (LDTs) and FDA has historically extended enforcement discretion, accepting the availability of certain LDTs outside of the FDA device clearance and approval pathway.

Of course this has not been a straightforward situation: we have seen decades of debate among FDA and industry stakeholders about the exact boundaries of FDA’s expressed enforcement discretion—where those boundaries should lie, and even interpretation (gleaned from enforcement action) of more precisely where they do, in FDA practice, actually lie.Continue Reading The Latest Episode of the LDT Drama: FDA Issues Long-Awaited Proposed Rule for Laboratory Developed Tests

On September 15, 2023, FDA published an update to the guidance document – “Breakthrough Devices Program, Guidance for Industry and Food and Drug Administration Staff.” Notably, FDA states that it may consider a medical device’s ability to improve health and healthcare disparities when deciding whether to designate a medical device as a breakthrough device. The agency may use this information to determine whether a candidate device provides more effective treatment or diagnosis when compared to the current standard of care. Below, we provide additional information regarding the breakthrough device program and the updated guidance.Continue Reading FDA Updates Breakthrough Device Guidance

On February 28, 2023, six of the seven Medicare Administrative Contractors (MACs), who administer Medicare reimbursement on behalf of the Centers for Medicare and Medicaid Services (CMS), came together for a multijurisdictional contractor advisory committee (CAC) meeting. The purpose of the CAC meeting was to discuss remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) for non-implantable devices. Specifically, the MACs were looking to determine whether a local coverage determination (LCD) should be developed to guide those performing remote patient monitoring and utilizing these billing codes.  

The public was permitted to submit written comments and responses to a set of specific discussion questions through March 10, 2023. The questions covered a range of issues including the advantages of RPM/RTM in a clinical setting and the use of third-party vendors in the provision of RPM/RTM services.

Importantly, if any MAC decides to develop an LCD after the CAC, the LCD will be published both on the MAC’s webpage and on the Medicare Coverage Database. The LCD will then go through a public comment period and other administrative hurdles before it can be finalized as policy. To date, there have been no established Medicare coverage policies for remote monitoring services. Continue Reading MACs Consider Guidance on Remote Patient Monitoring Amid Exploding Utilization

[Note, this is Part 2 in an ongoing series of posts exploring substantive aspects of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA). Part 1, available here, covered changes in Medicare payment rates.]

Buried in the “Miscellaneous” chapter of Subtitle F (“Cross-Cutting Provisions”) of the Food and Drug Administration Title (Title III) of the 2023 CAA is Section 3630, a provision without a short title called “Facilitating exchange of product information prior to approval.”

This provision was originally proposed as the Pre-approval Information Exchange Act (or PIE Act) in March 2022 and was included in the House version of the Food and Drug Administration user fee legislation before being dropped from that legislation along with almost all other policy riders in a deal to get the FDA User Fee program approved before it expired.

But the same language was included in the 2023 CAA that was signed into law on Dec. 29, 2022. And again, while it was not directly entitled as such in the law, it is the PIE Act and that is how this post will refer to it. So, exactly what is the PIE Act and what does it do?  Before assuming there is “PIE” for everyone, read more for important content on the boundaries of this law, and remaining challenges for companies seeking to exchange information under this statutory authority.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 2 The PIE Act

On September 27, 2022, FDA announced the publication of a  final guidance  document entitled Clinical Decision Support Software, Guidance for Industry and Food and Drug Administration Staff (Final CDS Guidance), which focuses on clarifying the types of clinical decision support (CDS) software functions that are excluded from the definition of device by the criteria in section 520(o)(1)(E) of the Federal Food Drug and Cosmetic Act.

This final guidance document addresses industry comments made in response to FDA’s September 2019 draft guidance (Draft CDS Guidance). The Final CDS Guidance streamlines the Draft CDS Guidance by focusing the scope on CDS intended to be used by state licensed, registered, or certified health care professionals , rather than those also used by patients and caregivers, which were included in the scope of the Draft CDS Guidance.Continue Reading FDA Announces Final Guidance on Clinical Decision Support Software

In a March 11 advisory opinion the Department of Health and Human Services’ Office of Inspector General (“OIG”) permitted a medical device manufacturer to pay Medicare-reimbursable costs for subjects enrolled in a clinical trial sponsored by the manufacturer and involving the manufacturer’s therapy.

The OIG indicated it would not impose administrative sanctions, despite the fact

On March 18, 2022, the Advanced Medical Technology Association (AdvaMed) – the world’s largest trade organization representing medical technology manufacturers – announced revisions to its Code of Ethics on Interactions with Health Care Professionals (AdvaMed Code). The effective date of the revised AdvaMed Code is June 1, 2022.

The AdvaMed Code was updated to address

On October 5, 2021, the U.S. Food and Drug Administration (“FDA”) published a final rule to establish requirements for the medical device De Novo classification process under the Federal Food, Drug, and Cosmetic Act.

The final rule, which takes effect January 3, 2022, comes nearly three years after the FDA first proposed it and, notably, sets forth the procedures and criteria for a manufacturer’s voluntary submission and withdrawal of a De Novo request.  Additionally, the rule clarifies how agency staff intends to accept and review the requests, as well as how FDA staff will determine whether to grant or decline the requests.  Finally, the rule also provides a way for combination products to use the De Novo pathway.

Useful for novel, low risk medical devices

The implementation of the De Novo classification process is especially significant for manufacturers of novel, low-risk medical devices.  Prior to the De Novo program, which was created in 1997, any device that lacked a predicate automatically became designated as a Class III device and, therefore, required premarket approval to legally reach the market.  Because this premarket pathway is designed to regulate the riskiest category of devices, manufacturers typically had to endure longer than anticipated wait times for approval of their low-risk devices.Continue Reading FDA codifies requirements for the medical device De Novo classification process

On August 2, 2021, the U.S. Food and Drug Administration (“FDA”)  published a final rule amending existing regulations (21 C.F.R. § 201.128 and 21 CFR § 801.4) that describe the types of evidence relevant to determine a drug or device’s intended use under the Food, Drug and Cosmetic Act (“FDCA”).  See 86 Fed. Reg. 41,384–85.

This final rule, which takes effect as of September 1, 2021, withdraws and replaces a final rule that FDA promulgated on January 9, 2017, but which never became effective due to an outcry concerning a problematic knowledge provision that was contrary to the statutory scheme of the FDCA and to physicians’ autonomy to use FDA-approved products in an off-label manner.

Prior to the 2021 final rule, FDA issued a proposed rule on September 23, 2020 that eliminated the 2017 rule’s knowledge provision and was much more aligned with FDCA intent and current FDA policy and practice.  FDA maintains, and we agree, that August 2021 final rule remains largely unchanged from the 2020 proposed language.

The following is a review of some important changes that FDA regulated entities should take note of as they develop and market FDA regulated products:Continue Reading FDA clarifies evidence and knowledge requirements in intended use final rule

On August 31, 2020, the Food and Drug Administration (FDA) issued draft guidance regarding principles for selecting, developing, modifying, and adapting patient-reported outcome instruments for use in medical device evaluation.[1]  Patient-reported outcome (PRO) instruments facilitate the systematic collection of how patients feel and function during a clinical trial.  FDA recognizes this information as important

The recently passed “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) is sweeping legislation that will have widespread impact on companies in the health care and life sciences space. In addition to expanding coverage of COVID-19 testing and preventive services, the Act includes provisions to address health care workforce needs, eases restrictions surrounding telehealth

In a recent guidance, the Centers for Medicare & Medicaid Services (CMS) encouraged health care providers (HCPs) to limit elective surgeries and nonessential procedures during the 2019 novel coronavirus (COVID-19) outbreak.

CMS offered a number of recommendations to help HCPs decide how to best serve patients requiring emergent or urgent attention. In addition to clinical

The Centers for Medicare & Medicaid Services (CMS) has published its proposed Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) rates and policies for calendar year 2020.  In addition to making annual updates to the OPPS and ASC payment systems, CMS includes a controversial proposal to require all hospitals to disclose payer-specific pricing, including “consumer-friendly” information for hundreds of “shoppable” services.  CMS is accepting comments on the proposed rule through September 27, 2019.  The following are highlights of the proposed rule.

Hospital Outpatient Provisions

CMS proposes a 2.7% update to OPPS rates for 2020, with the update reduced by 2.0% for hospitals that fail to meet quality reporting requirements.  Payment changes for individual procedures vary.  CMS estimates total OPPS payments would increase by $6 billion in CY 2020 compared with 2019 under the rule.

Other OPPS policy proposals include the following, among many others:
Continue Reading CMS Proposes 2020 Medicare OPPS and ASC Update, Floats Plan for Hospital Disclosure of Payer-Specific Prices

The Centers for Medicare & Medicaid Services (CMS) has released its proposed rule to update the Medicare acute inpatient prospective payment system (IPPS) and long-term care hospital (LTCH) prospective payment system (PPS) for fiscal year (FY) 2020.  Notably, the proposed rule includes a number of provisions that aim to “unleash medical innovation” by

The Trump Administration’s proposed fiscal year (FY) 2020 budget includes extensive health policy provisions – as evidenced by the 162-page Department of Health and Human Services (HHS) “Budget in Brief.”  This summary focuses on the major Medicare and Medicaid proposals most directly impacting providers and suppliers; note that we discuss the Administration’s proposed prescription drug reimbursement provisions in a separate blog post.

Medicare, Value-Based, and Related Reforms

The Administration estimates that its Medicare policy reforms would save approximately $811 billion over 10 years.  The Administration states that these proposals are “designed to improve value-based systems of care, exercise fiscal integrity, promote competition, reduce provider burdens, improve the appeals system, and address high drug prices.”  Budget provisions that would result in significant Medicare savings include the following (savings are over the 10-year period of FYs 2020-2029): 

  • A new process to distribute uncompensated care payments to hospitals based on share of charity care and non-Medicare bad debt. [$98.0 billion net]
  • Site neutral payments between on-campus hospital outpatient departments and physician offices for certain services (e.g., clinic visits). [$131.4 billion]
  • Payment for all off-campus hospital outpatient departments under the physician fee schedule (PFS) effective CY 2020. [$28.7 billion]
  • A unified post-acute care system for skilled nursing facilities, home health agencies, inpatient rehabilitation facilities, and long-term care hospitals (LTCHs) beginning in 2025. [$101.2 billion]
  • An increase in the intensive care unit minimum stay threshold from three days to eight days in order to qualify for payment under the LTCH prospective payment system. [$10.0 billion]
  • A reduction in Medicare reimbursement of bad debt from 65% to 25% over three years beginning in FY 2020. [$38.5 billion]
  • Expansion of the durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to all areas of the country. The proposal also would reimburse contract suppliers based on their own bids rather than a single payment amount.  [$7.1 billion]
  • Consolidation of federal spending for graduate medical education (GME) programs. [$211.8 billion in Medicare savings].

Other legislative proposals intended to promote value-based care that are not expected to have a budget impact include the following:
Continue Reading Trump Administration Calls for Medicare/Medicaid Cuts, Program Reforms in FY 2020 Budget Proposal

Responding to longstanding industry criticisms, the Centers for Medicare & Medicaid Services (CMS) has announced a number of changes to the Healthcare Common Procedure Coding System (HCPCS) coding process for 2019.  Most of the new policies are intended to increase transparency regarding CMS HCPCS coding decisions.  The one substantive change of note is that CMS

CMS has issued its proposed rule to update Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year (CY) 2019.  In addition to providing routine annual updates, the proposed rule includes several provisions intended to encourage “site-neutral payments” for different types of providers.  CMS also proposes a change to the basis for updating ASC rates that has long been sought by stakeholders.  CMS will accept comments on the proposed rule until September 24, 2018.

Hospital Outpatient Provisions

CMS proposes a 1.25% update to Medicare OPPS rates for 2019, reflecting an expected 2.8% market basket increase that is partly offset by both a statutory 0.75 percentage point reduction and a 0.8% multi-factor productivity (MFP) reduction.  The update for hospitals that fail to meet quality reporting requirements is reduced by 2.0% points.  Payment changes for individual procedures vary.

In the proposed rule, CMS emphasizes its interest in addressing payment differentials that the agency believes drives site-of-service decisions, especially between the physician’s office and hospital outpatient department settings, and increases costs to the Medicare program and beneficiaries.  In particular, CMS targets certain off-campus hospital provider-based departments (PBD) that are “excepted” under section 603 of the Bipartisan Budget Act of 2015.  Section 603 provides that effective for services provided on or after January 1, 2017, certain off-campus PBDs are generally paid under the physician fee schedule (PFS), rather than the typically higher-paying OPPS, unless an exception applies.  For 2019, CMS proposes:

  • Paying a PFS equivalent rate for clinic visit services (G0463, Hospital outpatient clinic visit for assessment and management of a patient) when provided at an “excepted” PBD. CMS observes that clinic visits are the most common service billed under the OPPS, and this policy is expected to save approximately $760 million in FY 2019, including $150 million in reduced beneficiary copayments.
  • CMS proposes to apply to exempted PBDs a current policy that reduces OPPS payment for separately payable, nonpass-through drugs and biologicals (other than vaccines) purchased through the 340B drug discount program from average sales price (ASP) plus 6% to ASP minus 22.5% (with certain exceptions).
  • Revising payment when an excepted PBD expands into new lines of service. Under the proposed rule, if an excepted off-campus PBD furnishes a service from one of 19 proposed clinical families of services that it did not furnish during a baseline period (November 1, 2014 through November 1, 2015), the service from the “new” family would be paid under the PFS rather than the OPPS.
  • CMS notes that it is “developing a method to systematically control for unnecessary increases in the volume of other hospital outpatient department services.” In the meantime, CMS requests comments on alternative approaches to controlling unnecessary volume increases, while “not impeding development or beneficiary access to new innovations.”

Other proposed provisions include the following:  
Continue Reading CMS Proposes CY 2019 Medicare OPPS, ASC Update, with Emphasis on Promoting Site-Neutrality

The Medicare Payment Advisory Commission (MedPAC) has released its annual report to Congress on “Medicare and the Health Care Delivery System.” This year’s report includes recommendations for changes to emergency department services policies, along with analyses of potential changes that would impact physicians, medical equipment suppliers, post-acute care providers, and others.  Highlights include the following: