Study Finds Lengthy Wait Time Until Medicare Coverage for New FDA-Approved Technologies

Once a novel technology is approved by the FDA and determined to be safe and effective, it can take several years or more to establish even nominal Medicare coverage for the product, according to the results of a study published in the Journal of the American Medical Association.

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Thousands of medical devices and diagnostics were introduced into the United States health care system in 2022 through the FDA’s Center for Devices and Radiological Health. Analysis of medical device development has often centered on timelines to FDA authorization, but there is little focus on the reimbursement by health insurers for these products, which increases uptake and patient access.

Furthermore, there is little to no literature that objectively quantifies timelines of the reimbursement process, although a recent survey of investors and manufacturers found that time to national Medicare coverage following FDA authorization of a product takes an average of 4.7 years. Investigators aimed to provide contemporary evidence about the progress to Medicare coverage for a cohort of new FDA-authorized technologies for which a reimbursement pathway has not already been established.

The cross-sectional study screened the FDA database for original applications that received market authorization during the enrollment period between January 2016 and December 2019. The researchers designated milestones to determine the transition from claim-by-claim adjudication to at least nominal coverage.

There were 281 technologies included in the total study cohort, spanning 20 FDA advisory committees, with cardiovascular (n = 66, 23%) and microbiology (n = 33, 12%) accounting for the largest number of product authorizations. Products were categorized as being diagnostic assays (n = 75, 27%), diagnostic devices (n = 47, 17%), acute treatment devices (n = 86, 30%), and chronic or ongoing treatment devices (n = 73, 26%).

Of these technologies, 110 (39%) were not directly reimbursed by Medicare. These products included surgical supplies, supplies for in-patient hospitalizations, software associated with broad patient use cases, and companion diagnostics for cancer therapeutics.

Additionally, 171 technologies (61%) were evaluated for coverage status, and 107 technologies (38%) used coding and coverage pathways established prior to the FDA authorization. The remaining 64 technologies (23%) did not have at least nominal coverage and were considered novel. These were further analyzed for timing until the coverage milestones.

The shortest time to achieve a coverage milestone from FDA authorization was 91 days, and the longest within the study period was around 7 years (2546 days). Overall, 28 (44%) of the novel technologies featured in the cohort reached at least nominal coverage by the end of the study period. Of the products that reached nominal coverage, 14 (50%) reached explicit coverage, 22 (79%) reached implicit coverage, and 8 (29%) achieved both implicit and explicit coverage.

Across the novel technologies seeking coverage, 18 (28%) reached a coverage milestone within 3 years of FDA authorization. The apparent coverage probability for a novel technology at 1, 3, and 5 years after FDA authorization was 10.9% (90% CI, 5.48%-19.9%), 25.0% (90% CI, 16.6%-35.6%), and 40.6% (90% CI, 30.4%-51.7%), respectively.

The time in which 50% of the sample had at least nominal coverage was 5.7 years (90% CI, 4.4-not applicable years) after FDA authorization. The upper bound of the confidence interval could not be estimated given the limited number of novel technologies that achieved coverage during the study period.

The investigators found considerable variability in time to coverage milestone achievement, and they hypothesized that there is a disproportionate burden for small manufacturers. This could be due to the financial ability for larger manufacturers to navigate the path to milestones, the authors discussed.

Interestingly, there was no association between coverage milestone achievement and level of evidence developed for FDA authorization. This suggests that it is not necessarily the clinical evidence that is responsible for lengthy time to coverage and points to other factors, perhaps the coverage determination process itself, according to the investigators.

“These data highlight the need for establishment of a more efficient and timely reimbursement process for novel FDA-authorized medical devices and diagnostics,” the study authors concluded.

Reference

Sexton ZA, Perl JR, Saul HR, et al. Time from authorization by the US Food and Drug Administration to Medicare coverage for novel technologies. JAMA Health Forum. 2023;4(8):e232260. doi:10.1001/jamahealthforum.2023.2260