CMS Delays Rule on ‘Reasonable and Necessary’ 

Situation Report | May 24, 2021

The U.S. Centers for Medicare and Medicaid Services (CMS) has released a final rule that delays the effective date of a final rule on “Medicare Coverage of Innovative Technology (MCIT) and Definition of ’Reasonable and Necessary,’’’ which was published in the January 14, 2021 Federal Register.

The January 2021 final rule established a Medicare coverage pathway for faster access to new, innovative medical devices designated as breakthrough by the Food and Drug Administration (FDA).

It would also implement regulatory standards to be used in making “reasonable and necessary” determinations under section 1862(a)(1)(A) of the Social Security Act for items and services that are furnished under Medicare Parts A and B. The rule states that Medicare will only cover items and services that fall under Medicare Parts A and B that fit their criteria of “reasonable and necessary.” This definition requires that an item or service not be experimental or investigational, be appropriate for Medicare beneficiaries according to their medical needs, and be safe and effective.

According to an announcement on the delay, commenters expressed concerns that the final rule’s pathway “establishes an open-ended coverage commitment for all breakthrough devices without demonstrating a health benefit in the Medicare population,” the CMS announcement explained.

CMS also said that many commenters expressed concern about codifying the definition of “reasonable and necessary” generally, among other concerns.