14 June 2016

FDA Releases Draft Guidance for Medicare Coverage of Investigational Devices

The FDA recently released a draft guidance policy categorizing investigational device exemption (IDE) devices. The guidance was developed to assist the Centers for Medicare & Medicaid Services (CMS) in determining whether or not an IDE device should be covered (reimbursed) by CMS. The guidance has significant implications for research sites and investigators who are responsible for developing research budgets.

In 2013, CMS published a final rule that, among other things, categorized devices based on risk.

  • Category A devices are those “…for which ‘absolute risk’ of the device type has not been established (that is, initial questions of safety and effectiveness have not been resolved) and the FDA is unsure whether the device type can be safe and effective.”
  • Category B devices are those “…for which the incremental risk is the primary risk in question (that is, initial questions of safety and effectiveness of that device type have been resolved), or it is known that the device type can be safe and effective because, for example, other manufacturers have obtained FDA premarket approval or clearance for that device type.”

CMS uses FDA’s category definitions in evaluating whether or not an IDE device receives Medicare coverage. Medicare may cover an investigational device and routine care services provided in an FDA-approved Category B IDE study if CMS determines prior to the submission of the first related claim that the Medicare coverage IDE study criteria are met. Medicare may cover only routine care items and services furnished in an FDA-approved Category A IDE study, but not the device itself if CMS determines that Medicare coverage IDE study criteria are met. In other words, Medicare cannot cover device expenses for studies that FDA has categorized as Category A.

Since then, the FDA has received a number of IDEs which do not easily fit into the two main categories or any of the eight sub-categories. These often refer to early feasibility studies, or EFS, which evaluate early stage devices in a small population. These can be new devices or approved devices that have been modified for a new use and may pose significant risk.

Once the FDA determines that the sponsor has provided enough information justifying a clinical trial, it will use the suggested criteria to assign a device to a CMS Category A or B when the IDE is approved or approved with conditions.

Category A

FDA intends to consider a device to be in Category A if one or more of the following criteria are met, and if available data on the proposed device or its intended use do not resolve questions of safety and effectiveness.

  • No Premarket Approval (PMA), 510(k) clearance or de novo request has been granted for the proposed device.
  • The proposed device has different characteristics compared to a legally marketed device.
  • The proposed device is being studied for a new indication or new intended use

The FDA intends to consider a device Category B if one or more of the above criteria are met and additional non-clinical and/or clinical data on the proposed device resolve questions of safety and effectiveness.

FDA categorizes IDE devices based on whether available data demonstrate that initial questions of safety and effectiveness have been resolved. The guidance document describes the criteria that will be used to help determine the appropriate category for a device to be studied. It also describes when it is appropriate to change the device category from Category A to Category B.

It is important for research professionals to understand these categories in order to make the correct determination of whether or not to bill insurance for the device. Additionally, clinical trial coordinators need to be prepared to obtain CMS, or a local Medicare contractor, approval prior to enrolling patients or the institution risks not being reimbursed for the device or the services provided. This can have significant implications for clinical trial budgeting.

To read the full draft guidance, click here. http://www.fda.gov/ucm/groups/fdagov-public/@fdagov-meddev-gen/documents/document/ucm504091.pdf