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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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Accessing New Research Funding Opportunities During and After COVID-19


Time to Read: 4 minutes Practices: Health Care

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As the COVID-19 pandemic continues to strain research operations, the federal government is responding with flexibilities for funding applicants and awardees as well as with significant new funding opportunities. Recognizing and accessing these opportunities can help universities, academic medical centers, and other institutions secure new funding, expand research programs, and contribute to the national effort to redress pandemic harms. This Alert highlights some of the new funding appropriated under the supplemental spending laws passed within the last six weeks – including over three-and-a-half billion dollars for the National Institutes of Health (NIH) – and describes current efforts to secure additional funding of up to ten times that amount. The Alert also describes specific methods, with a focus on the NIH, available now to obtain these resources.

Congress has appropriated supplemental funding of more than four billion dollars spread across seven NIH components as well as the National Science Foundation (NSF) and other civilian agencies supporting research. Some of this money may be transferred through to other government components and same may move directly to extramural research recipients. This funding is in addition to the existing annual appropriations these agencies receive for research, much of which may be directed to COVID activities as a matter of agency discretion. Often, this money is available only to institutions with active funding who may seek additional support through either an “administrative supplement” or a “competitive supplement,” also known as a “competitive revision.” Essentially, these mechanisms operate as follows:

  • Administrative Supplement: Expands funding for an existing award to meet increased costs that are within the scope of the approved project, but that were unforeseen when the new or competing renewal application was awarded; these awards are non-competing and generally handled entirely by NIH funding institute staff and without competitive peer review.
  • Competitive Revision: Expands scope of an existing award for something not previously peer reviewed; these awards are competitive and must go through peer review before award. [For COVID-19 activities, NIH has announced that it is planning a simplified version of peer review, e.g., with funding institute staff, within sixty (60) days if possible.]

For example, the NIH Common Fund, which is housed in the NIH Director’s Office, received $30 million to prevent, prepare for, and respond to coronavirus, domestically and internationally. NIH has announced that it is using these funds for innovative research on COVID-19 and its underlying virus, Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2). Because the last quarter of the federal government’s fiscal year is fast approaching, and because of the need to expedite funds distribution, the majority of funding awarded this year will be to researchers already receiving funding and who may seek administrative supplements or competitive revisions. NIH has announced that funding opportunities for wholly new research projects under the Common Fund are expected to begin in Fiscal Year 2021.

The National Science Foundation (NSF) also is using existing funding opportunities to enable distribution of new COVID-19 funding, and it has announced that its Rapid Response Research (RAPID) funding mechanism will be used for new proposals with severe urgency and those for quick-response research. Generally, requests for RAPID proposals are for support of up to $200K and up to one year in duration, but NSF has announced flexibility – “Well-justified proposals that exceed these limits may be entertained.”

For funding opportunities, agencies like NSF and NIH are posting funding opportunity announcements on a rolling basis through their standard processes, such as the NIH Guide. For funding already awarded, the public may access NIH information through its database of research grants and contracts, NIH Reporter, which includes information about research awards made with supplemental funding, and through the U.S. Department of Health and Human Services (HHS) public database of information about awards made with the COVID-19 supplemental funding.

Many view the new funding as insufficient. The leaders of the House committee with oversight for the NIH and the primary drafters of the 21st Century Cures Act spearheaded a bipartisan letter to Speaker Pelosi and Minority Leader McCarthy on April 29 seeking an additional $26 billion for research, to address, among other concerns, lost productivity as stay-at-home orders and other constraints restrict research progress. Shortly before this, on April 27, the Ad Hoc Group for Medical Research, an advocacy group representing a broad base of academic, research, and patient organizations, wrote a detailed request to House and Senate leaders seeking an additional thirty-one billion dollars in supplemental funding for NIH specifically. While House and Senate appropriators have not released specific language with additional funding, these requests, combined with public demands for research into treatment and prevention of COVID-19, suggest that a supplemental package will include additional research funding. If so, it is expected that much of this will be money that can be carried over to future fiscal years and be made available for research activities this fall and in later years.

Resources:

NIH Office of Extramural Research COVID-19 page

Examples of NIH Funding Opportunities for existing awardees:

Examples of NIH Funding Opportunities for new applications:

NIH Reporter

HHS Funding tracker

NSF Dear Colleague Letter on the Coronavirus Disease 2019 (COVID-19)

April 29 Letter from Rep. DeGette and Rep. Upton

April 27 Letter from Ad Hoc Group for Medical Research

Supplemental Funding for Research – Key Civilian Agencies as of May 5, 2020

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