Agency Promises More Frequent Drug/Device HCPCS Code Update Opportunities, Bars MACs from Adopting New Blanket Noncoverage Policies without Evidence Review  

On May 2, 2019, Centers for Medicare & Medicaid Services (CMS) Administrator Seema Verma outlined new improvements to the HCPCS coding and local coverage decision processes that are intended to “ensure safe and effective treatments are readily accessible to beneficiaries without delaying patient care.”

First, CMS plans to move away from its single annual application opportunity for new Level II Healthcare Common Procedure Coding System (HCPCS) codes.  Instead, CMS intends to provide quarterly opportunities to apply for drug HCPCS codes and semi-annual opportunities to apply for device codes.  According to CMS, this move “will greatly improve the ability for technologies to move through the adoption curve.”  The agency will provide additional details in the future.  CMS previously announced a series of steps to improve transparency in its HCPCS decision-making and eliminate a market share requirement for non-drug applications.

Second, CMS is preventing Medicare Administrative Contractors (MACs) from subjecting new technologies to blanket noncoverage policies without consideration of the clinical evidence.  In a CMS “Q&A” document released on May 2, CMS addressed a question regarding whether MACs may issue local coverage determinations (LCDs) to non-cover a category or class of technologies (e.g., emerging technologies assigned to a Current Procedural Terminology (CPT) Category III codes or certain clinical laboratory codes) without an evidence review.  CMS responded that MACs are bound by recently-revised manual provisions if they make any coverage changes under an existing LCD.   That is, if a technology does not fall under an existing LCD, MACs must follow the revised requirements to issue an LCD, “including reviewing the evidence with respect to the technology.”  Administrator Verma reiterated in remarks to the Medical Device Manufacturers Association that “[t]his means the contractors cannot make local coverage decisions that automatically non-cover an item or service because it has a category III code.”

These announcements come on the heels of release of the Medicare acute inpatient prospective payment system (IPPS) proposed rule for fiscal year 2020, which also includes a number of provisions that aim to “unleash medical innovation” by expediting access to novel medical technology.  For instance, CMS proposes establishing an alternative IPPS new technology add-on payment (NTAP) pathway for medical devices that are granted FDA Breakthrough Devices Program designation and increasing IPPS NTAP payments. The agency also solicits comments on how it could clarify the substantial clinical improvement criteria for evaluating applications for both the IPPS NTAP and outpatient transitional pass-through payment for devices.  CMS will accept comments on the proposed rule through June 24, 2019.

Together, these are all encouraging developments for the medical technology industry, providers, and the patients who ultimately benefit when administrative barriers to the adoption of innovative medical devices are removed.