The Final Notice took effect on August 12, 2024, and follows the draft notice with an opportunity for comment that CMS released on June 22, 2023 (Proposed Notice), and on which the agency received 150 stakeholder comments. Our summary of the Proposed Notice is here. Alongside the full Final Notice, CMS published a press release on the Final Notice. Below we summarize the TCET program as outlined in the Final Notice, with a particular emphasis on changes from the Proposed Notice. CMS also issued a guidance document on Coverage with Evidence Development (CED), a guidance document on CMS National Coverage Analysis Evidence Review, and a guidance document on clinical endpoints for knee osteoarthritis.

TCET Program Eligibility

The Final Notice finalizes, without change, the four criteria for program eligibility that CMS had previously proposed. The TCET pathway will facilitate coverage only for devices that have Breakthrough designation from the FDA, are determined to be within a Medicare benefit category, are not already the subject of an existing Medicare National Coverage Determination (NCD), and are not otherwise excluded from coverage through statute or regulation. CMS continues to believe that the majority of coverage determinations for diagnostic laboratory tests should be determined by the Medicare Administrative Contractors (MACs), but implies that on a case-by-case basis, some diagnostic laboratory tests may be appropriate for TCET.

The Final Notice makes clear that, as implied in the Proposed Notice, devices that have already received FDA market authorization or anticipate an FDA decision on market authorization within six months may not be accepted for TCET due to the extensive pre-market engagement necessary under the TCET program.

CMS states that it intends to “soon” release a list of proposed factors that it will use to prioritize consideration of TCET nominations, which are generally considered approximately 12 months prior to anticipated FDA authorization. CMS reiterates its statement from the Proposed Notice that, where there are many requests for simultaneous review, it will “prioritize these requests based on the magnitude of the potential impact on the Medicare program and its beneficiaries and staffing resources.” 89 Fed. Reg. 65,724, 65,744 (Aug. 12, 2024). Despite the concerns of many commenters, CMS maintains that its limited resources will not allow it to accept more than five devices per year as TCET candidates.

The Final Notice includes a few important changes to nomination for the TCET pathway:

• CMS changes the timeframe for reviewing TCET nominations: CMS will review nominations on a quarterly basis, a departure from its proposal to act upon nominations within 30 days of submission.

• CMS will permit manufacturers to submit a non-binding letter of intent to nominate a potentially eligible device approximately 18 to 24 months before FDA authorization is anticipated. CMS explains this will improve its “ability to track potential candidates, coordinate with FDA, and make operational adjustments” and may avoid delay in evidence reviews. 89 Fed. Reg. at 65,733. In general, CMS will continue to consider nominations approximately 12 months before the date of anticipated market authorization.

Overview of the TCET Pathway

CMS states that the TCET pathway is designed to provide “transparent, predictable, and expedited national coverage” for eligible Breakthrough devices and to balance multiple considerations including “(1) facilitating early, predictable, and safer beneficiary access to new technologies; (2) reducing uncertainty about coverage by evaluating early the potential benefits and harms of technologies with manufacturers; and (3) encouraging evidence development if notable evidence gaps exist for coverage purposes.” 89 Fed. Reg. at 65,724. In the Final Notice, CMS finalizes those benefits of the TCET pathway that were proposed in the Proposed Notice (namely, evidence development and temporary national coverage), as discussed below.

Evidence Development

In the Final Notice, CMS finalizes a collaborative process in which it will confer with the FDA, review the evidence provided with a TCET nomination package, and conduct an “Evidence Preview” (EP). The EP is a focused literature review of publicly available evidence for the device under consideration, undertaken to provide early feedback on the strengths and weaknesses of such evidence. CMS will use third-party contractors to conduct EPs, which will use standardized evidence grading, risk of bias assessment, an applicability assessment according to a protocol developed in collaboration with the Agency for Healthcare Research and Quality (AHRQ) in 2020, and any specialty society recommendations or guidelines that apply to the item under review.

In addition to the EP steps outlined in the Proposed Notice, CMS finalizes new policies as follows:

• Where it is aware a manufacturer will pursue TCET for a device where appropriate clinical endpoints are uncertain, CMS may preemptively conduct a clinical endpoint review, potentially including a Medicare Coverage Advisory Committee (MedCAC) meeting to align on evidence gaps in the EP stage.

• Rather than sharing the full EP (which includes a summary of the available evidence and of evidentiary gaps) with the MACs as proposed, CMS will instead publish an evidence summary without the evidence gap analysis included.

As discussed below in the discussion of TCET timelines, once the EP is finalized, the manufacturer may decide to pursue national coverage or withdraw from TCET. If the manufacturer wishes to move forward, and where the EP identifies evidence gaps, the manufacturer should develop an Evidence Development Plan (EDP) to address such gaps. CMS also finalizes its proposal to permit fit-for-purpose (FFP) studies as part of the EDP and expects to propose guidance on FFP studies in the future, with an emphasis on the secondary use of real-world data.

Temporary National Coverage

TCET will provide temporary national coverage, following FDA marketing authorization, while the EDP is executed and evidence is developed. While the Proposed Notice spoke of the period as three to five years, CMS moved away from a strict time frame, indicating that the duration should be tied to an EDP that sufficiently addresses evidence gaps. While the Proposed Notice included a CMS goal of finalizing a TCET NCD within six months after FDA market authorization, in the Final Notice, CMS seems to back away from that, noting that “[d]elays in drafting an approvable evidence development plan may make it impossible to achieve coverage within 6 months of FDA authorization.” 89 Fed. Reg. at 65,740.

CMS will conduct an updated evidence review of the evidence developed as part of the EDP within six months of the date specified in the EDP. Following such review, CMS will decide whether to establish an NCD without an evidence development requirement, an NCD with CED, a non-coverage NCD, or leave coverage to MAC discretion.

CMS finalizes its policy to apply coverage under a TCET NCD to “similar devices,” which are subject to the same coverage conditions including a requirement to propose an EDP. CMS declines to define “similar devices” beyond noting that they must also be Breakthrough devices, stating a desire to preserve flexibility. CMS also declines to establish a first-to-market exclusivity period, stating it would both complicate TCET and could impede patient access to the most appropriate medical device for the patient’s needs.

The TCET Timeline

CMS finalizes very tight evidence review timelines in order to ensure timely coverage of devices under TCET. Aside from the non-binding letter of intent to nominate that manufacturers may submit 18 to 24 months before anticipated FDA marketing authorization, the TCET process will begin approximately one year before anticipated FDA marketing authorization.

The TCET process begins with a self-nomination packet from the manufacturer that includes, among other things:

• A comprehensive list of peer-reviewed, English-language publications supporting the device;

• A list of Part A or Part B benefit categories, as applicable, into which the manufacturer believes the medical device falls;

• A statement describing how the device addresses the health needs of the Medicare population; and

• A statement explaining why the device is an appropriate candidate for TCET.

CMS will send the manufacturer an e-mail to either ask for more information or confirm that the nomination is complete and under review. CMS will accept TCET candidates quarterly, and if a candidate is not accepted, it will automatically be considered in the following quarter, with no need for the manufacturer to resubmit.

Next, within 20 business days of receipt of a complete nomination, CMS will offer an initial 30-minute meeting with the manufacturer to discuss the device, its intended use, a high-level summary of the evidence, and the expected timeframe for FDA review. CMS representatives also will meet with FDA counterparts to learn more about the technology.

After meeting with the FDA and if all other pathway criteria have been met, CMS may initiate a benefit category review to determine whether the device is an appropriate candidate for TCET. Should CMS determine the device is an appropriate candidate, it will notify the manufacturer of acceptance into the TCET pathway and begin engagement with a third-party contractor to conduct the EP, which should take approximately 12 weeks. The manufacturer may provide feedback on the EP and once the EP has been finalized, a manufacturer may decide whether to continue with the TCET pathway or to withdraw. If a manufacturer withdraws at this point, CMS will (as newly established in the Final Notice) publish the EP without the evidence gap assessment.

A manufacturer who chooses to continue with the TCET pathway must submit a formal NCD request and, if any evidence gaps were identified during the EP, an EDP addressing those evidence gaps. CMS advises that the EDP should be submitted as soon as possible following FDA marketing authorization in order to meet CMS’s goals of having a finalized EDP approximately 90 business days after market authorization and a finalized TCET NCD within six months after FDA market authorization. Once CMS receives the EDP from the manufacturer, CMS will have 30 business days to review the proposed EDP, in collaboration with AHRQ, and provide written feedback to the manufacturer. CMS will then meet with the manufacturer to discuss the EDP and will then have 60 business days to adjust the EDP before finalizing it.

The Final Notice states that the “process for Medicare coverage under the TCET pathway would follow the NCD statutory timeframes in section 1862(l) of the Act.” 89 Fed. Reg. at 41,642. CMS provides the below updated timeline, summarizing these steps:

Next Steps

CMS is now accepting notifications that manufacturers are interested in TCET via the “Contact Us” link at http://www.cms.gov/Medicare/Coverage/InfoExchange/contactus.html. The deadline to submit nominations to be considered for the first quarterly review is October 31, 2024. The deadlines for subsequent quarters in 2025 are January 31, 2025, April 30, 2025, and July 31, 2025.

If you have any questions on CMS’s finalized TCET pathway for breakthrough medical devices or would like to submit a nomination to CMS for consideration in the first or future quarterly reviews, please contact the Hogan Lovells attorney with whom you regularly work, or any of the authors of this alert.

Authored by Stuart Langbein, Beth Roberts, Beth Halpern, James Huang, Brian Carey, Victoria Wallace, Erik Schulwolf, and Rianna Modi