FDA, CMS, IDEs, an IA, and an MOU…Hopefully Lead to YES, You’re Covered!

by Jennifer Newberger - 

Since September 1995, FDA and CMS have operated under an interagency agreement (IA) regarding Medicare coverage for investigational devices.  That same month, CMS also published a rule that permitted Medicare coverage of certain devices with an approved investigational device exemption (IDE) in place.  The rule established the process by which FDA would assist CMS in determining which investigational devices should be covered under Medicare.  The process was based on placing devices into one of two categories:  Category A, for “Experimental/ Investigational” devices, or Category B, “Non-experimental/Investigational” devices.  Categorization depends upon the level of risk associated with the device.  Category B devices present a lower level of risk, based on information available at the time of the categorization demonstrating that an initial level of safety and effectiveness has already been established.  See   42 C.F.R. § 405.201 et seq.

Under the regulation and the IA, CMS uses FDA’s categorization to determine whether an investigational device may receive coverage under Medicare.  For Category B devices, Medicare may cover both the device and “routine care items and services.”  For Category A devices, however, CMS only reimburses the routine care items and services, but not the device itself. 

In 2013, CMS revised the definitions for Category A and B devices as follows:

• A Category A device is “a device for which ‘absolute risk’ of the device type has not been established (that is, initial questions of safety and effectiveness have not been resolved) and the FDA is unsure whether the device type can be safe and effective.”

• A Category B device is “a device for which the incremental risk is the primary risk in question (that is, initial questions of safety and effectiveness of that device type have been resolved), or it is known that the device type can be safe and effective because, for example, other manufacturers have obtained FDA premarket approval or clearance for that device type.”

Over time, it became apparent that not all devices necessarily fit into either Category A or Category B.  This was especially true for the following types of devices:

• Devices that had been studied in early feasibility studies, but had undergone modifications that raised significant new safety questions.

• Devices for which additional data became available since the original categorization of the device indicating that certain safety issues had been resolved.

Due to changes made to the original iteration of the device, it may have been appropriate to change the initial categorization of the device.  Unfortunately, neither the rule nor the IA provided FDA with the authority to change the categorization of a device once made. 

To address these issues regarding categorization, FDA and CMS entered into a Memorandum of Understanding (MOU) dated December 2, 2015.  On June 1, 2016, one day before the MOU was to go into effect, FDA issued a draft guidance document to implement the MOU.  Upon finalization, the “policies and framework in this guidance will represent the Agency’s current thinking on categorization.”

The draft guidance states that FDA will place a device in Category A if one or more of the following criteria are met:

• No PMA approval, 510(k) clearance or de novo request has been granted for the proposed device or similar devices, and non-clinical and/or clinical data on the proposed device do not resolve initial questions of safety and effectiveness.

• The proposed device has different characteristics compared to a legally marketed device; and information related to the marketed devices does not resolve initial questions of safety and effectiveness for the proposed device. Available non-clinical and/or clinical data on the proposed device also do not resolve these questions.

• The proposed device is being studied for a new indication or new intended use for which information from the proposed or similar device related to the previous indication does not resolve initial questions of safety and effectiveness. Available non-clinical and/or clinical data on the proposed device relative to the new indication or intended use also do not resolve these questions.

Category B devices are those for which one or more of the following criteria are met:

• No PMA approval, 510(k) clearance or de novo request has been granted for the proposed device or similar devices; however, available clinical data (e.g., feasibility study data) and/or non-clinical data for the proposed device or a similar device resolve the initial questions of safety and effectiveness.

• The proposed device has similar characteristics compared to a legally marketed device, and information related to the marketed device resolves the initial questions of safety and effectiveness for the proposed device. Additional non-clinical and/or clinical data on the proposed device may have been used in conjunction with the leveraged information to resolve these questions.

• The proposed device is being studied for a new indication or new intended use; however, information from the proposed or similar device related to the previously indication resolves the initial questions of safety and effectiveness. Additional non-clinical and/or clinical data on the proposed device may have been used in conjunction with the leveraged information to resolve these questions. 

The descriptions of the category A and B devices will allow FDA to take into consideration developments regarding the device that occurred subsequent to the initial categorization, and to change categories if needed.  The sponsor of a device should include a request to change the category as an IDE supplement.  FDA will include a categorization decision in either the IDE approval letter to the sponsor or a letter to the sponsor in response to a request for category change.