FDA draft guidance to assist CMS with coverage decisions for Medicare payment

On June 1, 2016, the US Food and Drug Administration (FDA) published in the Federal Register (81 Federal Register 35032) a draft guidance for sponsors, clinical investigators, industry, IRBs, and FDA staff regarding categorization of Investigational Device Exemption (IDE) devices as either a Category A or Category B device to assist the Centers for Medicare and Medicaid Services (CMS) with making Medicare coverage decisions for such devices. Specifically, the draft guidance establishes criteria for classifying a device in an FDA-approved IDE study as a Category A or Category B device and states when a Category A device can be reclassified as a Category B device.  The draft guidance implements a December 2015 Memorandum of Understanding between FDA’s Center for Devices and Radiological Health (CDRH) and CMS’s Coverage and Analysis Group (CAG) to streamline and facilitate the efficient categorization of investigational medical devices in order to support CMS’s ability to make its reimbursement determinations.

Medicare may cover the routine costs of items and services furnished to Medicare beneficiaries participating in FDA-approved IDE studies and meeting the requirements for coverage under 42 CFR 405.211. CMS uses the FDA’s categorization of an IDE device as a Category A (Experimental/Investigational) device or Category B (Non-experimental/Investigational) device to determine whether the IDE device itself will also be covered for Medicare payment purposes. Medicare does not cover Category A devices and may cover Category B devices only if CMS determines before the submission of any claims related to the IDE study that the Medicare coverage criteria under 42 CFR 405.212 were met (IDE device categorization is only part of the information used to determine coverage).

The FDA’s categorization of IDE devices depends largely on whether “initial questions of safety and effectiveness” of the device have been resolved at the time an IDE study is approved. Unlike a Category B device (which can be covered by Medicare), a Category A device has not resolved initial questions of safety and effectiveness. The criteria for whether an IDE device falls within Category A or Category B is broken down on the basis of whether the device is new (i.e. no PMA approval, no 510(k) clearance, and no de novo request granted), similar to a legally marketed device, or being proposed for a new indication or new intended use.  IF FDA determines that the initial questions of safety and effectiveness for a Category A device have been resolved, categorization of the device may be changed to a Category B device upon study approval for a new study, study expansion for a staged study, or submission of a request to  change the category.

Once finalized, the guidance will replace IDE Guidance Memorandum #95-2 issued on September 15, 1995. Comments to the draft guidance must be submitted by August 1, 2016 in order to receive consideration.

*Wendy Wright is admitted only in North Carolina. Her practice is supervised by principals of the firm admitted in the District of Columbia.