Ongoing attempts to coordinate FDA and CMS reviews will preserve approval, coverage, coding and payment as distinct processes, agency representatives concurred at the HHS Secretary's Advisory Committee on Regulatory Reform regional hearing June 10.

"We certainly should combine efforts, but we're an insurance company," CMS Administrator Tom Scully observed during the Minneapolis meeting. "Maybe the decision should be made simultaneously, but I don't think I'm ever going to be at the point where I think you should have FDA approval and simultaneously coding and payment."

Scully conceded that FDA and CMS "should be able to make the [approval and coverage] decision at the same time, but they're two totally different functions."

Regarding coding and payment alone, Scully suggested that FDA approval can never "trigger" Medicare reimbursement of a new device or procedure, because the item must be factored into Medicare's annual inpatient prospective payment system final rule, which becomes effective Oct. 1.

Scully cited the recent example of J&J/Cordis' attempt to secure reimbursement for its Cypher drug-eluting stent before the device is approved (¹ Also see "CMS Drug-Eluting Stent Payment Window Open Until Sept. 1" - Medtech Insight, 6 May, 2002., p. 3).

"I don't believe FDA will be ready to approve the evidence so far of drug-eluting stents by Oct. 1," Scully said, pointing out that CMS has to issue its final rule, totaling $74 bil. in inpatient payments, by Sept. 1.

"Hypothetically, if [FDA is] not in there saying [drug-eluting stents are] safe and efficacious, no matter how well we combine forces to figure this out, we have to make a call on a budget-neutral pot," he said. If CMS agrees to assign drug-eluting stents into a new higher paying DRG that would cover the expected $2,000 premium over bare-metal stents, "every other code in inpatient has to come down.

"The FDA and CMS can have a much more streamlined process, which is happening now informally," Scully concluded. "But even if it works perfectly, you still, theoretically, have that coding gap where you get a new device or drug approval and you don't have a code for 12 months."

Despite problems with synchronizing FDA approvals with coding and payment, some participants suggested that new therapies could reach patients faster if CMS used FDA review decisions as a proxy for their own.

Government representatives at the meeting, however, explained to panelists that FDA approves technologies deemed "safe and effective," while CMS is charged with covering devices, drugs and procedures that are "reasonable and necessary."

CDRH Director David Feigal elaborated on the difference between the legislative mandates of the two agencies. "One of the things to remember is that [FDA] can approve unreasonable and unnecessary products," he pointed out. "We can approve second or third-line therapies that someone purchasing might want to reserve except for when there are special circumstances."

CMS Acting Clinical Chief Sean Tunis cited CMS' 2000 decision to not cover gamma cameras modified for coincidence imaging as an example of the agency denying coverage for unreasonable or unnecessary uses of FDA-approved devices.

"I don't think anyone wants to update FDA's regulatory authority so that they don't approve the gamma cameras," he stated. "But we'd be missing a lot of cancers if CMS continued to pay for the gamma camera. There's a better use of the dollars intended for beneficiaries for us not to cover [it]."

Medtronic VP-Arrythmia Management Marshall Stanton, MD, suggested in testimony to the committee that combining FDA's and CMS' review processes would not necessarily improve access to new technologies for all patients.

"Patients who are not Medicare beneficiaries would have to wait longer for access to new medical breakthroughs while issues that affect only the Medicare population are resolved," he said.

Both Scully and Tunis asserted that the time between FDA approval and CMS coverage and/or new coding decisions can be reduced if CMS begins working with companies early in the product development process to define which studies and data will be evaluated by CMS once the device is FDA-approved.

Indeed, many important therapies could reach the market if FDA and CMS "look at different medical technologies and new therapies at the stage they are at in their maturity," Stanton said.

"It is not always appropriate to expect there to be a very large randomized study that proves, for example, survival benefit," he opined. Stanton cited implantable cardioverter defibrillators, which first reached the U.S. market in 1985, 12 years before a study conclusively demonstrating their impact on survival was completed.

However, Tunis characterized reluctance on the part of some companies to act upon CMS' study requests.

"Sometimes [companies] spend as much money on legal representation" fighting a CMS request for a study "than it would have taken to do the trial to answer the question. Some of these trials aren't difficult to do," he noted.

In response to a suggestion that CMS establish a conditional coverage policy for devices or procedures in the early stages of development, Tunis observed that "Medicare cannot pay for things that are not reasonable and necessary [without] a statutory change or significant regulatory change."

Since August 2000, federally-regulated clinical trials have automatically qualified for CMS coverage of routine care costs; Medicare has yet to issue criteria for covering routine care costs of non-government trials, (² Also see "Medicare To Cover "Routine Care Costs" Of Private And Public Clinical Trials" - Medtech Insight, 7 August, 2000., p. 3).

During the June 10-11 hearing, the committee heard comments from invited industry reps, government officials and public witnesses on possible administrative and regulatory changes to promote coordination between FDA and CMS. Comments focused on diminishing redundancies and expediting approval and coverage decisions for new technologies.

Both Feigal and Tunis urged panel members to help improve "harmonization" between FDA and CMS processes, but to avoid references to the word "collaboration," which implies that the agencies have the same mission.

The committee's coordination subcommittee will make proposals to be considered by the full committee Aug. 28-29 in Washington, D.C. for inclusion in a final report to the HHS secretary. Release of the document is expected by October ³ Also see "CMS Coverage, FDA Review Process Overlap Studied By HHS Secretary Panel" - Medtech Insight, 14 January, 2002., p. 8).

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