CMS Giveth and CMS Taketh Away
Like most other segments of the medical device industry, the neurotech industry depends heavily on reimbursement from private and public payers. While there are some categories of noninvasive devices that are priced low enough for end users to pay out of pocket, for most implanted devices, a neurotech therapy has little chance of commercial success without a favorable coverage decision by the Centers for Medicare and Medicaid Services. One exception, of course, is LivaNova’s VNS system for depression, which initially languished after CMS denied coverage despite the fact that the FDA approved the therapy. After many years and much persistence, LivaNova was finally able to get CMS to reconsider.
In recent months, neurotech vendors have seen some ups and downs from CMS as the agency has proposed and implemented some favorable and unfavorable rulings. Among the most promising developments has been the Medicare Coverage of Innovative Technology rule, which would provide at least four years of national coverage for FDA approved devices that achieved breakthrough device designation. A large number of neurotech products and therapies have already achieved this status. The rule was set to become effective on March 15, but the new acting director of CMS imposed a 60-day delay until May 15. While it is possible that the rule could be rescinded, it’s our guess that the delay had more to do with the incoming Biden administration wanting to examine all executive orders of the outgoing Trump administration. But a critical article in the New England Journal of Medicine, which argues for stricter standards for MCIT reimbursement, could have an impact.
Another bit of bad news is that CMS will now require prior authorization for implanted SCS systems. Several SCS vendors have pushed back on that rule, implemented by the Trump administration, claiming it will lead to increased opioid use. The impact of that rule was softened somewhat by a proposed rule that would streamline the prior authorization process by using electronic exchange of health care data.
For 2021, CMS increased payments to physicians for in-office trials of both SCS and PNS systems by about 15 percent, but facility reimbursement for both trials and permanent devices have been reduced about 7 to 8 percent. Hospital and ambulatory surgery center reimbursement for SCS trials and permanent implants remained flat. But reimbursement for permanent PNS procedures increased by about $1000 for both hospitals and ASCs.
While it’s likely that CMS will continue to be a source of consternation for the neurotech industry in the years ahead, we prefer to believe that the glass is half-full.
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