Final Medicare Coverage-With-Evidence-Development Guidance Delayed By CMS Staff Cuts

The CMS coverage and analysis group has had to divert its attention from finishing a CED guidance to finalizing proposed changes to the process for awarding Medicare coverage for investigational device trials, primarily due to staff cuts, says Louis Jacques, who heads the group.

Staff cuts at CMS tied to the federal budget sequester are to blame for the agency’s delay in issuing a final coverage-with-evidence-development guidance document; industry has been anticipating the final policy since a draft document was released a year ago.

A question that Louis Jacques, director of the coverage and analysis group at CMS gets a lot of lately is, “What’s going on with CED?”

His answer is simple: “I lost a quarter of my analytic staff since the sequester, since February. And that includes medical officers, that includes very experienced staff; some of these people have retired and when people retire, they take a lot of institutional memory with them,” he explained Nov. 6 at the Medical Device Manufacturers Association’s annual coverage, reimbursement and health policy conference in Baltimore.

“The plain and simple explanation is the same people who would be working on revising the CED guidance document are the folks who are currently working on the [investigational device exemption] reg. I simply don’t have enough people to keep both those balls up in the air at the same time. I anticipate that hopefully soon in 2014 that you’ll hear more from us about coverage with evidence development. Obviously we continue to do it,” said Jacques, who has resorted to doing staff-level medical officer work since he doesn’t have enough medical officers to do the job.

The across-the-board federal sequestration cuts that took effect March 1 were enacted by the Budget Control Act of 2011 to make sweeping cuts to all government agencies.

Other agencies within HHS were affected by the federal sequester as well, including FDA, which faced an approximate 7.7% across-the-board cut, and the National Institutes of Health, which absorbed a 5% cut from its $31 billion fiscal year 2013 budget.

“The plain and simple explanation is the same people who would be working on revising the CED guidance document, are the folks who are currently working on the [investigational device exemption] reg” – Louis Jacques, CMS

CMS took steps to refine its coverage-with-evidence-development policy with the release of a draft guidance last November that replaces a 2006 guidance (Also see "Medicare CED Could Enhance Efficiency Of FDA Post-Approval Studies – CMS Draft Guidance" - Pink Sheet, 30 Nov, 2012.). The document makes substantial changes based on public comments and six years of experience with the program, in which national coverage is provided on the condition that data be collected on use of the item or service in Medicare beneficiaries. The document also reflects a closer working relationship of late between CMS and FDA.

Since the draft was issued, industry stakeholders have called upon CMS to clarify several aspects of the proposed policy (Also see "Device Makers Seek Clarity On CMS' Plans For Coverage With Evidence Development" - Medtech Insight, 18 Feb, 2013.). Specifically, comments on the draft guidance ask CMS to ensure that the CED requirements are applied consistently and predictably and do not become overly burdensome on manufacturers. Several comments, which were due last January, also address the possibility that CMS may allow local Medicare administrative contractors to implement their own CED policies, even though the draft does not explicitly state that (Also see "CMS Ambiguous On Role Of Local Contractors In Coverage With Evidence Development" - Medtech Insight, 10 Dec, 2012.).

CED has more often been used in the device arena, but can apply to pharmaceuticals (Also see "Medicare CED Not A Good Fit With Groundbreaking Products, Drug Firms Argue" - Pink Sheet, 18 Feb, 2013.). In a recent notable example, CMS decided against providing routine Medicare coverage for beta amyloid positron emission tomography – using Eli Lilly & Co.’s Amyvid (florbetapir F18 injection) or GE Healthcare’s Vizamyl (flutemetamol F 18 injection) – to diagnose dementia and neurodegenerative disease, such as Alzheimer’s disease, but did say it would permit payment in very limited clinical trial uses under the CED policy (Also see "CMS’ Amyvid Final NCD Clarifies Trial Outcomes Goals" - Pink Sheet, 2 Oct, 2013.)

Jacques told MDMA attendees that based on experience, he was “not expecting you guys to suddenly jump up and cheer,” when discussing the topic of CED.

However, after doing an internal analysis of national coverage decisions issued between 2004 and today, he noticed approximately half of the NCDs done before 2008 were “no’s.” “About half of them were, ‘This is noncovered in whole or in significant part,” Jacques said.

But, he noted, he was “hard-pressed to find an actual ‘no’” among NCDs issued from 2009 on – with the exception of the NCD for percutaneous image-guided lumbar decompression, for which a proposal was issued Oct. 17 and a final decision is expected Jan. 15. (See (Also see "CMS Proposes Noncoverage For Percutaneous Image-guided Lumbar Decompression" - Medtech Insight, 21 Oct, 2013.).)

What he found instead was that CED has taken the place of noncoverage. “So you can ask yourself, do you want to start to support CED, or do you want me to do away with CED and we’ll noncover half the stuff we deal with?” he asked of MDMA conference attendees.

“To me the answer is kind of obvious but I’m not the one making some of those decisions,” Jacques added.

CMS Works To Finalize IDE Trial Changes

The attention CMS has diverted from the final CED guidance has instead been turned toward finalizing proposed changes to the process for awarding Medicare coverage to investigational device exemption trials. The agency raised the IDE coverage reform proposals in its 2014 draft physician fee schedule in July ( (Also see "CMS Proposes Centralized Review, New Standards For Reimbursement Of IDE Studies" - Medtech Insight, 9 Jul, 2013.).) CMS expects to issue the final 2014 physician fee schedule by Nov. 27.

Currently, local Medicare contractors decide whether Medicare should help pay for the costs of certain clinical trials involving medical devices. The proposed reforms attempt to address device industry complaints about the unwieldy process of obtaining jurisdiction-by-jurisdiction coverage by making these coverage decisions centrally; they also includes new set of standards to govern which studies can be covered.

One of the things CMS hoped to do in its revision of the IDE regulation was “to give IDE sponsors about a three-year head-start in considering what the reimbursement implications were going to be,” Jacques explained. “If we give you feedback on your IDE protocol, you can be fairly certain that these are the same concerns that we would have given you three years later when you presented your data to us and asked for coverage.”

“So if you’re going to make a change and want to make it early, if there’s something that you could do early, wouldn’t you want to know that early?” Jacques said.

The revisions to the IDE regulation are one example of how CMS and FDA are trying to work together “to get to a place where both agencies, the expectations of both agencies, will be more transparent to you very early on,” he said.

[Editor’s note: this story was contributed by “The Gray Sheet,” which provides in-depth coverage of the medical device and diagnostics sectors.]