CMS To Revamp Coding For New Medical Technology

CMS To Revamp Coding For New Medical TechnologyDive Brief

CMS Administrator Seema Verma announced Thursday the agency will overhaul coding regulations that she argues have hindered beneficiary access to new medical technology.

Medical device companies will now be able to apply for a new permanent Healthcare Common Procedure Coding System (HCPCS) code twice a year, instead of annually. CMS also recently eliminated a requirement for a new product to have a 3% market share to be eligible for a new code.

  • The agency is also making clear to Medicare contractors responsible for local coverage decisions it is inappropriate to automatically not cover technologies designated with a category III Current Procedural Terminology (CPT) code, which code is often used for emerging medical technology. Verma said local contractors must use a new local coverage determination process for each decision they make.
Dive Insight

The moves follow CMS’ hospital inpatient proposed rule last week, which included measures to speed coverage of breakthrough devices approved by FDA and boost Medicare reimbursement for novel technologies.

That rule also waives a requirement that new breakthrough devices demonstrate a substantial clinical improvement to receive coverage and add-on payment for two years while companies gather real-world evidence for an evidence profile to support further coverage.

Verma said that while the proposed rule contains important steps, the new coding changes will help achieve CMS’ goal of competition and innovation driving lower costs and better results.

“We expect this will greatly improve the ability of innovators to accelerate through the adoption curve,” Verma said in a speech to the Medical Device Manufacturers Association. “We’ve heard from you that using general codes makes it hard to bill for services, inhibiting your ability to gain a foothold for a product.  And we heard that permanent codes should be issued more often to enhance ease of billing for new medical technology.”

CMS will also be working to boost transparency and inter-agency coordination around coverage, coding and payment determinations for companies. Verma said CMS is planning to issue “enhanced guidance” on how CMS works with FDA before devices are approved to build on its Parallel Review Program and other efforts.

“The goal is to enhance coordinated review and minimize redundancies for innovators,” Verma said.

The agency is also in discussions with Congress to expand coverage of disposable devices such as an insulin pump that substitutes for a durable device, according to the CMS head.

AdvaMed CEO Scott Whitaker praised CMS for the changes to its coding processes, saying it will ultimately improve patient access to new medical technology.

“Together with the recent proposed rule calling for additional funding for breakthrough technologies, as well as last year’s guidance on changes to the Local Coverage Determination (LCD) process, today’s announcement further demonstrates CMS Administrator Verma’s commitment to providing the best care to Medicare beneficiaries,” Whitaker said.

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