[Federal Register Volume 86, Number 50 (Wednesday, March 17, 2021)]
[Rules and Regulations]
[Pages 14542-14545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-05490]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 405

[CMS-3372-IFC]
RIN 0938-AT88


Medicare Program; Medicare Coverage of Innovative Technology 
(MCIT) and Definition of ``Reasonable and Necessary''; Delay of 
Effective Date; Public Comment Period

AGENCY: Centers for Medicare & Medicaid Services (CMS), Department of 
Health and Human Services (HHS).

ACTION: Interim final rule; delayed effective date; request for 
comments.

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SUMMARY: Consistent with the memorandum of January 20, 2021, from the 
Assistant to the President and Chief of Staff, titled ``Regulatory 
Freeze Pending Review,'' this document delays the effective date of the 
final rule titled, ``Medicare Program; Medicare Coverage of Innovative 
Technology (MCIT) and Definition of 'Reasonable and Necessary' '' 
published in the Federal Register on January 14, 2021, for 60 days. We 
are providing a 30-day public comment period to allow interested 
parties to provide comments about issues of fact, law, and policy 
raised by the rule and this information could be considered by the 
agency in determining whether further actions are appropriate, which 
could include whether to revise or rescind.

DATES: 
    Effective date: As of March 12, 2021, the effective date of the 
final rule amending 42 CFR part 405 published at 86 FR 2987 on January 
14, 2021, is delayed by this interim final rule until May 15, 2021.
    Comment period: To be assured consideration, comments on the 
January 14, 2021 final rule and ``Medicare Program; Medicare Coverage 
of Innovative Technology (MCIT) and Definition of ``Reasonable and

[[Page 14543]]

Necessary'' '' and this interim action must be received at one of the 
addresses provided below, by April 16, 2021.

ADDRESSES: In commenting, please refer to file code CMS-3372-IFC.
    Comments, including mass comment submissions, must be submitted in 
one of the following three ways (please choose only one of the ways 
listed):
    1. Electronically. You may submit electronic comments on this 
regulation to http://www.regulations.gov. Follow the ``Submit a 
comment'' instructions.
    2. By regular mail. You may mail written comments to the following 
address ONLY: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-3372-IFC, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-3372-IFC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Linda Gousis at (410) 786-2281 or 
[email protected].

SUPPLEMENTARY INFORMATION: 
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following 
website as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that website to 
view public comments. CMS will not post on Regulations.gov public 
comments that make threats to individuals or institutions or suggest 
that the individual will take actions to harm the individual. CMS 
continues to encourage individuals not to submit duplicative comments. 
We will post acceptable comments from multiple unique commenters even 
if the content is identical or nearly identical to other comments.

I. Background

    In the January 14, 2021 Federal Register, we published a final rule 
titled ``Medicare Program; Medicare Coverage of Innovative Technology 
(MCIT) and Definition of ``Reasonable and Necessary'' '' (86 FR 2987). 
The January 2021 final rule established a Medicare coverage pathway to 
provide Medicare beneficiaries nationwide with faster access to new, 
innovative medical devices designated as breakthrough by the Food and 
Drug Administration (FDA). The MCIT pathway will result in 4 years of 
national Medicare coverage starting on the date of FDA market 
authorization or a manufacturer chosen date within 2 years thereafter. 
This January 2021 final rule also implemented regulatory standards to 
be used in making reasonable and necessary determinations under section 
1862(a)(1)(A) of the Social Security Act (the Act) for items and 
services that are furnished under Medicare Parts A and B.

II. Provisions of the Interim Final Rule With Comment Period (IFC)

A. Purpose of This Action

    On January 20, 2021, the Assistant to the President and Chief of 
Staff issued a memorandum titled ``Regulatory Freeze Pending Review'' 
(``Regulatory Freeze Memorandum'') which, along with the guidance on 
implementation of the memorandum issued by the Office of Management and 
Budget (OMB) in Memorandum M-21-14 dated January 20, 2021, directs 
agencies to consider delaying the effective date of rules published in 
the Federal Register that have not yet become effective, consistent 
with applicable law, for the purpose of reviewing any questions of 
fact, law, and policy the rules may raise.
    The OMB memorandum directed that the decision to delay should 
include consideration of whether--
     The rulemaking process was procedurally adequate;
     The rule reflected proper consideration of all relevant 
facts;
     The rule reflected due consideration of the agency's 
statutory or other legal obligations;
     The rule is based on a reasonable judgment about the 
legally relevant policy considerations;
     The rulemaking process was open and transparent;
     Objections to the rule were adequately considered, 
including whether interested parties had fair opportunities to present 
contrary facts and arguments;
     Interested parties had the benefit of access to the facts, 
data, or other analyses on which the agency relied; and
     The final rule found adequate support in the rulemaking 
record.
    After considering this guidance, we determined that a 60-day delay 
is appropriate to ensure that: (1) The rulemaking process was 
procedurally adequate; (2) the agency properly considered all relevant 
facts; (3) the agency considered statutory or other legal obligations; 
(4) the agency had reasonable judgment about the legally relevant 
policy considerations; and (5) the agency adequately considered public 
comments objecting to certain elements of the rule, including whether 
interested parties had fair opportunities to present contrary facts and 
arguments. Therefore, we are delaying the effective date of the January 
2021 MCIT final rule and inviting 30 days of public comments subsequent 
to promulgation of this document consistent with the Regulatory Freeze 
Memorandum and OMB Memorandum M-21-14. Further, we appreciate the 
strong public interest in our rulemaking, and we are especially 
interested in public comments on each of the five decision criteria 
noted previously with respect to the January 2021 MCIT final rule.
    Accordingly, this document delays the effective date of the January 
2021 MCIT final rule as specified in the DATES section and opens a 30-
day comment period on the facts, law, and policy underlying the rule.

B. Potential Concerns and Invitation for Public Comment

1. Operational Issues
    The MCIT pathway would address uncertainty in Medicare coverage for 
newly FDA market-authorized breakthrough devices. While the rule would 
eliminate coverage uncertainty early after FDA market authorization and 
automates coverage ``so that innovative products are brought to market 
faster,'' the rule did not directly address operational issues, such as 
how the agency would establish coding and payment levels for particular 
devices, which are both central to prompt market access. CMS cannot be 
certain of the precise timing of FDA market authorizations and the 
exact indication for use of the devices until they become market 
authorized. However, in order to fully operationalize Medicare coverage 
for a particular breakthrough device, CMS must make other decisions 
before it can properly pay claims. Among those are whether the device 
falls within a Medicare benefit category under Part A (Hospital 
Insurance Benefits) or Part B (Supplementary Medical Insurance 
Program). These determinations are often called benefit category 
determinations or BCDs. In addition, we often must take into account 
the setting

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where the device is furnished, whether there is an existing payment 
methodology that applies to the particular breakthrough device 
(including, for example, whether a device would be paid under a bundled 
payment system or is separately payable). We must also determine 
whether there is an appropriate billing code for the device in order to 
support electronic claims filing and efficient claims processing.
    We recognize that some public comments on the September 1, 2020 
MCIT proposed rule, especially from manufacturers, supported our 
initiating MCIT only after coverage, coding, and payment had been 
established. We underestimated the operational challenges highlighted 
by these comments. We seek comment on how CMS should resolve the 
operational issues, such as benefit category determinations, coding, 
and payment levels.
2. Overlapping Rules
    CMS separately proposed a Benefit Category and Payment 
Determination process in the November 4, 2020 proposed rule titled 
``Benefit Category and Payment Determinations for DME, Prosthetic 
Devices, Orthotics and Prosthetics, Therapeutic Shoes and Inserts, 
Surgical Dressings, or Splints, Casts, and Other Devices Used for 
Reductions of Fractures and Dislocations'' (DMEPOS) (85 FR 70358). (The 
comment period for the November 2020 proposed rule closed on January 4, 
2021.) This proposed rule outlined a process to establish a BCD for 
Durable Medical Equipment (DME). The proposed rule has not been 
finalized. Because of the publication sequences of the MCIT public 
comment period ending on November 2, 2020 and the DMEPOS proposed rule 
being published 2 days after the MCIT comment period closed, it may not 
have allowed stakeholders to adequately comment on the integration of 
the two policies. While we recognize the proposed rule was specifically 
considering DMEPOS, and not all breakthrough devices fall within these 
categories, that rule may serve as a model for resolving similar 
operational issues that could expedite and facilitate Medicare payment. 
While CMS has not completed its public comment review of the DMEPOS 
payment rule, there are comments requesting that CMS align its 
processes. We seek comment on whether commenters would have raised 
additional concerns if there had been an opportunity to comment on the 
DMEPOS payment and MCIT rules at the same time.
3. New Information: Breakthrough Device Volume
    The regulatory impact analysis (RIA) published as part of the MCIT 
final rule was based on the expectation that the FDA breakthrough 
device program would initially apply to a relatively small number of 
devices based on the low number of breakthrough devices that had become 
market authorized. Using this information, we assumed this number would 
remain in a relatively steady state for the first few years and 
included this assumption in the RIA. The MCIT proposed rule stated that 
2 to 5 devices would likely fall within the MCIT coverage pathway 
initially and would remain fairly consistent in the short term, and 
increase gradually thereafter. At that time, the publicly available FDA 
count of breakthrough device designations was from the end of fiscal 
year 2018, when there were 97 FDA-designated breakthrough devices. New 
data, publicly reported by the FDA on February16, 2021 (https://www.fda.gov/news-events/fda-voices/reflections-record-year-novel-device-innovation-despite-covid-19-challenges), indicated that more 
than 400 devices have been designated as breakthrough. We recognize 
that not all of those devices will be market-authorized, and we cannot 
know the precise timing of those market authorizations. Recent public 
data suggests a larger number of market-authorized breakthrough devices 
may be eligible for MCIT. The public may not have had an opportunity to 
consider this aspect of potential growth. We seek comment on whether 
the assumption about the potential volume of FDA breakthrough devices 
was flawed such that the public did not have a meaningful opportunity 
to comment on the proposed rule.
4. Medicare Patient Benefit/Protection and Other Issues
    Further, after the close of the MCIT public comment period, some 
experts raised questions in published articles about how breakthrough 
technology may work--in older patients and the evidence basis for 
Medicare coverage of these technologies (Bach. New York Times, December 
1, 2020; https://www.nytimes.com/2020/12/01/opinion/trump-medicare-medicaid.html; Eroding Progress on Evidence and Outcomes: CMS's New 
Proposed Pathway for Medical Device Coverage. Neumann and Chambers. 
Health Affairs, December 2, 2020 and Medicare's New Device-Coverage 
Pathway--Breakthrough or Breakdown. Rathi, Johnston, Ross and Dhruva. 
New England Journal of Medicine, March 10, 2021). CMS is aware that 
Medicare patients often have different clinical profiles and 
considerations due to the complexity of their medical conditions and 
multiple treatments compared to other age groups. Because Medicare 
patients usually have more than one co-morbidity and are likely being 
treated for more than one condition, CMS has historically reviewed 
clinical evidence showing that the devices have been studied in the 
Medicare population or that outcomes are generalizable to the Medicare 
population. The various treatments may interact with each other, 
potentially affecting overall patient benefits.
    Some public commenters challenged CMS' premise that the MCIT 
coverage could result in improved care for Medicare beneficiaries 
absent specific evidence that the MCIT eligible devices benefit the 
Medicare population. In response to the public comments, the MCIT final 
rule gives CMS authority to remove a breakthrough device from the MCIT 
pathway where a medical device safety communication or warning letter 
is issued by the FDA, or if the FDA revokes market authorization for a 
device. We seek comment on whether the revisions in the MCIT final rule 
adequately addressed the public's concern of clinical benefit to the 
Medicare population.
5. Public Request for a More Detailed Proposal
    Public commenters on the proposed rule requested that we not 
finalize the rule because of a potential lack of clarity on the 
``reasonable and necessary'' definition, which is the statutory 
standard for covering MCIT breakthrough devices after the coverage 
pathway ends and most items and services that fall under the Medicare 
fee-for-service program. These commenters stated that CMS did not 
include sufficient detail in the proposed rule about the impact of 
commercial insurance coverage and, therefore, suggested that they could 
not adequately or meaningfully comment. Further, some commenters 
suggested that the agency should publish another proposed rule with 
significantly more detail. We seek comment on whether the public had 
adequate opportunity to comment on the proposed rule. We are also 
soliciting comment on whether CMS adequately responded to objections to 
the proposed rule, including whether interested parties had fair 
opportunities to present contrary facts and arguments that may help to 
improve the final rule.

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6. Adequacy of Rulemaking Process
    Lastly, OMB Memorandum M-21-14 requires agencies to consider, among 
other things, whether the rulemaking process was procedurally adequate 
and whether interested parties had a fair opportunity to present 
contrary facts and arguments. We are soliciting comment on the 
following:
     Whether there are any other procedural issues pertaining 
to the January 2021 MCIT rulemaking process.
     If there are other procedural issues, what are those 
issues and what should CMS do to remedy those issues?
     Should the January 2021 MCIT final rule be amended, 
rescinded, or further delayed pending review by the CMS or allowed to 
go into effect?

III. Waiver of Proposed Rulemaking and the 60-Day Public Comment 
Periods

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment prior to a rule taking 
effect in accordance with section 1871 of the Act and section 553(b) of 
the Administrative Procedure Act (APA). Unless there is a statutory 
exception, section 1871(b)(1) of the Act generally requires the 
Secretary of the Department of Health and Human Services (the 
Secretary) to provide for notice of a proposed rule in the Federal 
Register and provide a period of not less than 60 days for public 
comment before establishing or changing a substantive legal standard 
regarding the matters enumerated by the statute. Similarly, under 5 
U.S.C. 553(b) of the APA, the agency is required to publish a notice of 
proposed rulemaking in the Federal Register before a substantive rule 
takes effect. Section 553(d) of the APA and section 1871(e)(1)(B)(i) of 
the Act usually require a 30-day delay in effective date after issuance 
or publication of a rule, subject to exceptions. Sections 553(b)(B) and 
553(d)(3) of the APA provide for exceptions from the advance notice and 
comment requirement and the delay in effective date requirements. 
Sections 1871(b)(2)(C) and 1871(e)(1)(B)(ii) of the Act also provide 
exceptions from the notice and 60-day comment period and the 30-day 
delay in effective date. Section 553(b)(B) of the APA and section 
1871(b)(2)(C) of the Act expressly authorize an agency to dispense with 
notice and comment rulemaking for good cause if the agency makes a 
finding that notice and comment procedures are impracticable, 
unnecessary, or contrary to the public interest.
    We find that notice and comment rulemaking is impracticable, 
unnecessary, and contrary to the public interest with respect to the 
relatively short delay in the effective date of the final MCIT rule 
announced by this action. The final rule was published in the Federal 
Register on January 14, 2021. Even if the MCIT final rule were to go 
into effect on March 15, 2021, CMS would be unable to operationalize 
the program by that date. Because the agency is required to make other 
decisions, such as benefit category determinations, whether there is an 
existing payment methodology and whether there is an existing code or 
establishing code for the MCIT eligible breakthrough device, it would 
be impracticable to operationalize the MCIT rule on the March 15, 2021 
effective date. These operational practicalities leave CMS incapable of 
implementing the MCIT program on March 15, 2021. Additionally, the 
higher than anticipated volume of devices receiving FDA breakthrough 
device designation exponentially complicates the operational concerns 
that we have identified. Further, public comments highlighted the 
importance of the agency having the ability to not only cover an FDA-
designated breakthrough device expeditiously, but also to be able to 
have coding and payment levels established at the same time.
    It would be impracticable to provide the normal 60-day comment 
period for such a brief delay in the effective date because the rule 
would be effective before the public comments could be meaningfully 
considered. Given the March 15, 2021 effective date for the MCIT final 
rule, there is not sufficient time to adequately consider advance 
public comment on this delay and it would interfere with the public's 
interest in the orderly promulgation and implementation of regulations. 
We find good cause for dispensing with advance public comment because 
it is impracticable to provide a meaningful opportunity to comment 
before extending the effective date of the MCIT rule.
    The White House memorandum also recommends that, for rules 
postponed for further review, agencies consider opening a 30-day 
comment period to allow interested parties to provide comments about 
issues of fact, law, and policy raised by those rules, and consider any 
requests for reconsideration involving such rules. Consistent with this 
guidance, we are requesting public comments on these topics, as well as 
the specific questions posed previously. After reviewing comments 
received in response to this notice, we may determine there is a need 
to postpone the effective date further to allow additional time to 
consider issues of fact, law, and policy or to reconsider the January 
2021 MCIT final rule.

IV. Summary

    This rule delays the effective date of January 2021 MCIT final rule 
to May 15, 2021 for further review of the of fact, law, and policy 
raised by the rule. This rule also invites 30 days of public comment 
and requests interested parties to provide comments about issues of 
fact, law, and policy raised by the January 14, 2021 final rule so that 
CMS can consider any requests for reconsideration involving the rule. 
We also invite additional public comments on whether the rule should be 
amended, rescinded, delayed pending further review, or allowed to go 
into effect.
    For the reasons stated previously, we find that there is good cause 
under 5 U.S.C. 553(b)(B) and (d)(3) to publish this action without 
prior notice and comment, and for this action to become effective 
immediately upon publication in the Federal Register.

V. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually.

Norris Cochran,
Acting Secretary, Department of Health and Human Services.
[FR Doc. 2021-05490 Filed 3-12-21; 4:15 pm]
BILLING CODE 4120-01-P