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Medicare Expands Coverage of “Breakthrough” Medical Devices and Codifies “Reasonable and Necessary” Standard

On January 14, 2021, the Centers for Medicare and Medicaid Services (“CMS”) published a final rule that significantly alters the Medicare reimbursement landscape for medical devices approved under the Food and Drug Administration’s (“FDA”) “Breakthrough Devices Program.” The rule, which represents the culmination of years of advocacy by the medical device industry and patient and provider interest groups, finalizes a September 1, 2020 proposed rule that aimed to address the substantial time lag between FDA authorization of medical devices and Medicare coverage of the same. Specifically, the rule establishes a Medicare Coverage of Innovative Technology (“MCIT”) pathway for Medicare coverage of Breakthrough Devices and related medical procedures during a four-year period that begins immediately upon FDA marketing authorization. The final rule also codifies the definition of the “reasonable and necessary” standard that is used to determine when other items and services (and MCIT devices after the four-year period) may be covered by the Medicare program. The new rule becomes effective March 15, 2021.

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Economic Recovery Package With Major Health Care Initiatives Nears Congressional Approval

Time to Read: 1 minutes Practices: Health Care

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The economic recovery package working its way through Congress is expected to direct over $150 billion to the health care industry. The impact will be wide-reaching, including investments in health information technology, additional Medicaid funding for states, subsidies for continuation of COBRA, funding for research sponsored by the National Institutes for Health (NIH), and Medicare and Medicaid reimbursement changes. As this landmark legislation nears final passage, Ropes & Gray attorneys are closely monitoring the package and its contents and will be providing updates as they become available through our health care reform newsletter. Click here for a detailed side-by-side comparative analysis of the health care provisions of the House and Senate bills.

Two different versions of the economic recovery legislation are currently in play. The House approved its version of the bill last week, on January 28. On January 27, the Senate Finance Committee and the Senate Appropriations Committee convened to consider their respective portions of the package. Debate on the Senate floor on a combined bill began February 2. Once the Senate passes a bill, a conference committee comprised of members of both the House and the Senate will meet to resolve their differences and present a bill for approval by both houses and, subsequently, the president.

Both the House-passed bill and the current Senate bill include measures that promise to have a dramatic impact on the health care industry. For example, both bills contain provisions that would provide:

  • Funding and support for Health Information Technology (HIT);
  • Additional Medicaid funding for states intended to help them avert drastic Medicaid budget cuts that are currently being contemplated by their state legislatures;
  • Subsidies for continuation of COBRA health coverage for workers who have lost jobs;
  • Funding for medical research through the NIH; and
  • Medicaid and Medicare reimbursement changes, including increases in Medicaid disproportionate share hospital (DSH) payments and restoration of funding cuts from Medicare indirect medical education (IME) payments.

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For further information, please contact your usual Ropes & Gray attorney.

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