LS&HC Horizons 2022 - Flipbook - Page 21
Hogan Lovells | 2022 Life Sciences and Health Care Horizons
21
Digital Health and AI
Coding and medicare benefit category determinations
for medical devices and AI
Medicare is the largest health insurance program in the U.S. It is a defined
benefit program, meaning that items and services are only covered if
they fall within a statutorily defined benefit category. For medical devices
that are used by patients in the home, including artificial intelligence
(AI)-based devices, the Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS) benefit most often applies and itself
includes several different benefit categories. In the past, the Centers for
Medicare & Medicaid Services (CMS) informally made benefit category
determinations for medical devices as part of the Healthcare Common
Procedure Coding System (HCPCS) process. However, based on the
Agency’s reading of the Supreme Court’s 2019 decision in Azar v. Allina
Health Services, it ceased making these benefit category determinations
until a process was established through notice and comment rulemaking.
Unfortunately, CMS did not finalize a benefit category determination
process until 28 December 2021, when it issued the DMEPOS Final Rule.
Thus, for more than two years, innovative new medical devices have
come to market with no way to obtain a benefit category determination
and, consequently, no way to be covered by the Medicare program
as the Durable Medical Equipment (DME) Medicare Administrative
Contractors (MACs) declined to make specific coverage decisions
in the absence of a national benefit category determination.
With a benefit category determination process in place for 2022, we
hope to see the backlog of devices that came to market in the last two
years clear, finally affording Medicare beneficiaries access to these
devices. However, we also expect to see a reckoning in terms of how
CMS categorizes innovative devices under the rigidly defined statutory
benefit categories. In many cases, this will truly be an exercise of fitting a
square peg in a round hole. It will be up to developers and manufacturers
to ensure that they clearly lay out for CMS why their innovative device/
technology fits within the archaic benefit categories of the Social Security
Act and to familiarize themselves with the new Medicare benefit category
determination process.
Beth Roberts
Partner, Washington, D.C.
James Huang
Counsel, Washington, D.C.
Victoria Wallace
Senior Associate, Washington, D.C.
