Medicare, established in 1965, included a crucial mandate to cover only items and services deemed “reasonable and necessary” for treating illnesses or injuries. This guideline has traditionally meant that experimental or investigational treatments—those not yet fully proven effective—were not covered under Medicare, causing delays in adopting new, potentially beneficial medical technologies even after FDA approval.
To address these delays while adhering to its mandate, Medicare introduced the “coverage with evidence development” (CED) program in the mid-2000s. CED allows beneficiaries to access promising new technologies while the necessary evidence about their effectiveness and safety is being collected. This program has been used in numerous cases, mostly with medical devices and procedures, such as the transcatheter aortic valve replacement. This valve replacement procedure was provided to patients likely to benefit from it under CED, which required add-on data collection via a national clinical registry, hence aiding Medicare in its subsequent coverage decisions.
However, CED has encountered problems—it’s often costly, extends timelines, and yields data that varies in quality and relevance, leading to just a handful of technologies gaining full coverage. As medical technology has evolved, concerns have been raised about the outdated nature of the CED policy, which has remained largely unchanged since its inception during the era of BlackBerrys and DVDs.
In response to these challenges, the Centers for Medicare and Medicaid Services (CMS) recently announced a new policy modification known as transitional coverage for emerging technologies (TCET). TCET makes procedural adjustments that could shorten decision times, enhance interactions between medical device developers and Medicare officials, and inspire more efficient evidence generation methodologies, including the use of real-world data. Still, TCET continues to build on the old CED framework and is limited to a small number of breakthrough devices annually, bypassing most drugs and diagnostics.
For TCET to be more effective, it needs integration into a broader initiative aimed at enhancing the nation’s capacity for post-approval evidence generation, which would entail greater scope and ambition in coverage decisions. This includes exploring emerging treatments for widespread conditions like diabetes, heart failure, or Alzheimer’s disease and understanding their impact on real-world patient outcomes.
These extended efforts would require significant resources, suggesting that Medicare should significantly invest in improving the evidence generation landscape. The Bipartisan Policy Commission has recommended investing up to $10 million annually to modernize Medicare’s coverage process, but this amount pales in comparison to the budgets allocated to FDA divisions.
Additionally, legislative changes might be necessary to reinforce the CED framework. Recent legal developments, such as the Supreme Court’s overturning of the “Chevron doctrine,” underscore the need for clearer statutory guidelines on how Medicare determines coverage based on medical necessity and cost-effectiveness. Suggestions have been made to link evidence quality directly to reimbursement levels, thereby motivating faster generation of conclusive data.
To truly revolutionize CED, embedding it into a national evidence generation ecosystem connected with other federal agencies might be necessary. This would enhance the scale and efficiency of data collection, encompassing large-scale patient registries and pragmatic randomized trials that could serve broader national health priorities—areas where private industry lacks incentives.
Overall, while the update to Medicare’s coverage policy via TCET marks progress, a more systemic overhaul integrating modern data tools and legislative support is critical. This would not only advance Medicare’s capacity to manage emerging technologies but potentially transform the broader U.S. healthcare landscape in evaluating and utilizing medical innovations.
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