Medical Policies Online - Policy #: 05.00.04b

Claim Payment Policy

Title:

Food and Drug Administration (FDA) Approval of Medical Devices

Policy #:

05.00.04b

Application of Claim Payment Policy is determined by benefits and contracts. Benefits may vary based on product line, group or contract. Medical necessity determination applies only if the benefit exists and no contract exclusions are applicable. Individual member benefits must be verified.

In products where members are able to self-refer to providers for care and services, members are advised to use participating providers in order to receive the highest level of benefits.When services can be administered in various settings, the Company reserves the right to reimburse only those services that are furnished in the most appropriate and cost-effective setting that is appropriate to the member’s medical needs and condition. This decision is based on the member’s current medical condition and any required monitoring or additional services that may coincide with the delivery of this service.

For more information on how Claim Payment Policy Bulletins are developed, go to the About This Site section of this Medical Policy Web site.

Intent

The intent of this policy is to identify the processes by which the US Food and Drug Administration (FDA) classifies medical devices and to explain how the Company determines its coverage position for devices that require review, classification, and marketing approval by the FDA.

For information regarding humanitarian use devices and the Humanitarian Device Exemption (HDE) process, refer to that specific policy.

For information regarding a specific type of durable medical equipment (DME), refer to the appropriate policy.

Description

According to the US Food and Drug Administration (FDA), a medical device is an instrument, apparatus, implement, machine, implant, in vitro reagent, or other similar or related article, including a component part or accessory which is:

Recognized in the official National Formulary, or the United States (US) Pharmacopoeia, or any supplement to them
Intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease in human beings
Intended to affect the structure or any bodily function of a human being, but which does not achieve any of its primary intended purposes through chemical action within or on the body and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes

Medical devices go through the following three-step process to obtain marketing clearance from the FDA's Center for Devices and Radiological Health (CDRH):

STEP ONE is to verify that the manufacturer's product meets the definition of a medical device according to Section 201(h) of the Food, Drug, and Cosmetic (FD&C) Act. For example, if the product is a medical device that is an electronic radiation emitting product, it may have additional requirements for FDA approval.
STEP TWO is to require the device manufacturer to determine how the FDA will classify the device. The classification identifies the level of regulatory control that is necessary to assure the safety and effectiveness of a medical device. Depending on its classification status, the device is required to receive either premarket notification (510[k]) or premarket approval (PMA) from the FDA in order to be cleared for marketing. Devices that do not require classification by the FDA are considered exempt (eg, manual stethoscopes, mercury thermometers, and bedpans). The various FDA medical device classifications are described below.
- CLASS I (GENERAL CONTROLS)
  Devices for which the general controls of the FD&C Act, such as adherence to good manufacturing practice regulations, are sufficient to provide a reasonable assurance of safety and effectiveness. Class I devices are typically not intended for a use that is of substantial importance in preventing impairment of human health; they do not present a potential unreasonable risk of illness or injury. As such, most Class I devices are exempt by law from any premarket notification and/or Quality System regulations. Examples include blood donor chairs, elastic bandages, examination gloves, hand-held surgical instruments, nasal oxygen cannula, stomal bags, and traction accessories.
- CLASS II (GENERAL CONTROLS AND SPECIAL CONTROLS)
  Devices that, in addition to general controls, require special controls, such as performance standards or postmarket surveillance, to provide a reasonable assurance of safety and effectiveness. Because they may be important in preventing impairment of human health or may present a risk of illness or injury if they are not used appropriately, Class II devices are usually not exempt from premarket notification or Quality System regulations. Examples include cord blood collection kits, infusion pumps, potassium flame photometry, power wheelchairs, pregnancy test kits, primary calibrators, surgical drapes, and vascular grafts less than 6 mm in length.
- CLASS II (GENERAL CONTROLS AND SPECIAL CONTROLS, AND PREMARKET APPROVAL)
  Devices that cannot be identified as Class I or Class II are designated as Class III because insufficient information exists to determine that either special or general controls would provide a reasonable assurance of the safety and effectiveness of the device. Class III devices support or sustain human life, are of substantial importance in preventing impairment of human health, or present a potential, unreasonable risk of illness or injury. Class III devices require premarket approval; however, not all Class III devices require an approved premarket approval application in order to be marketed. Class III devices that are considered substantial equivalents to devices legally marketed before May 28, 1976 may be marketed through the premarket notification (510[k]) process until the FDA publishes a requirement for manufacturers of that device type to submit premarket approval data. Examples of Class III devices requiring premarket approval include catheter balloon repair kits, endosseous implants, expandable cervical dilators, implantable pacemaker pulse generators, spherical contact lenses, and stair-climbing wheelchairs.
STEP THREE is the development of data and/or information necessary to submit a marketing application in order to obtain FDA clearance to market the device. For some 510(k) submissions and most PMA applications, clinical performance data is also required to obtain clearance to market the device. In these cases, a clinical trial must be done in accordance with FDA's Investigational Device Exemption (IDE) regulations.

The FDA defines safety as the prevention of adverse events caused by inadvertent or hazardous operation of the medical device.

The FDA defines effectiveness as the degree to which a medical device produces a desired result or effect.

Certain devices may require clinical trials to prove both their safety and effectiveness.

REGULATORY ROUTES TO MARKET

Premarket Approval (PMA) is the FDA's process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices. Due to the level of risk associated with Class III devices, the FDA has determined that general and special controls are insufficient to assure the safety and effectiveness of such devices. Therefore, these devices require a premarket approval (PMA) application in order to obtain marketing clearance.
- Devices approved through the PMA process often use randomized controlled clinical studies that produce high-quality data demonstrating the safety and effectiveness of the device. Such devices, however, may require further evaluation for clinical efficacy, as investigations required for the PMA process typically focus on intermediate results rather than final patient outcomes.

Premarket Notification (510[k]) approval process enables the FDA to approve medical devices that are similar to devices that are currently on the market (known as predicate devices). Prior to marketing the new device, the manufacturer submits a notification to the FDA to demonstrate that the device to be marketed is as safe and effective as (or, is substantially equivalent [SE] to) a predicate device that has been legally marketed prior to May 28, 1976, when devices were not subject to premarket approval (PMA). Applicants must compare their device to one or more similar devices currently available on the U.S. market and support their claims of substantial equivalency.
- FDA approval of medical devices under the 510(k) process is based on the assumption of the similarity of the underlying technology of the device rather than demonstrated efficacy and proven clinical applicability.
- Premarket Notification (510[k]) contains the following components:
  - A Predicate Device, which is the legally marketed device to which equivalence is drawn. The new device does not need to be identical to the predicate device that is already on the market; however, the manufacturer must establish a degree of substantial equivalence between the new device and the predicate device.
  - Substantial equivalence, which a device is determined to be if, in comparison to a predicate device, it has the same intended use as the predicate device and has been demonstrated by the sponsor to be as safe and effective as the legally marketed device, and is one of the following:
    - The same technological characteristics as the predicate device
    - Different technological characteristics, but those characteristics do not raise new questions of safety and effectiveness
- A claim of substantial equivalence does not mean the new device must be identical to the predicate device. Substantial equivalence is established with respect to intended use, design, energy used or delivered, materials, performance, safety, effectiveness, labeling, biocompatibility, standards, and other applicable characteristics.
HUMANITARIAN DEVICE EXEMPTION (HDE)
Certain medical devices intended to be used for humanitarian purposes are evaluated by the FDA through the HDE process. The FDA’s humanitarian use device designation is intended to benefit individuals by permitting the humanitarian use of certain medical devices when there is no comparable device available to treat or diagnose a disease or condition affecting less than 4,000 individuals annually. Since clinical investigation demonstrating the device's efficacy is not feasible (given the low prevalence of the disease in the population), an FDA HDE grants manufacturers an exemption to the usual premarket approval process and allows marketing of the device for the FDA-labeled HDE indication(s). Under FDA requirements, a humanitarian use device may only be used after institutional review board (IRB) approval has been obtained for the use of the device in accordance with the FDA-labeled indications under the HDE.

Additional information regarding the FDA requirements for the classification and marketing approval of medical devices can be found at: http://www.fda.gov/.

Policy

Coverage of a medical device is based on:

Classification, as determined by the US Food and Drug Administration (FDA)
FDA approval/clearance
Medical necessity, as determined by the Company
The individual's benefits and
The setting in which the device is provided or used

Medical devices that require FDA classification but have not been classified and/or have not received FDA clearance for marketing are considered experimental/investigational and are not covered by the Company's products. In addition, a device that has FDA marketing clearance is considered experimental/investigational if available published literature determines that the safety and/or efficacy of the device has not been established.

Guidelines

Supporting medical necessity documentation must be maintained in medical records and made available to the Company upon request.

Information on the FDA search classification database can be found at:

http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfPCD/classification.cfm.

MEDICARE
The Company's payment methodology may differ from Medicare.

References

Centers for Medicare & Medicaid Services (CMS). Medicare Benefit Policy Manual. Chapter 14: Medical devices. 10 - Coverage of medical devices. B3-2484, B3-4122.1. [CMS Web site]. 10/01/03. Available at: http://www.cms.hhs.gov/manuals/Downloads/bp102c14.pdf. Accessed March 28, 2008.

Company Benefit Contracts.

Rados C. FDA Consumer Magazine. FDA works to reduce preventable medical device injuries. [FDA Web site]. July 2003. Available at: http://www.fda.gov/fdac/features/2003/403_devices.html. Accessed March 28, 2008.

US Food and Drug Administration (FDA). Center for Devices and Radiological Health. Device advice. Classify your medical device. [FDA Web site]. 08/04/04. Available at: http://www.fda.gov/cdrh/devadvice/313.html. Accessed March 28, 2008.

US Food and Drug Administration (FDA). Center for Devices and Radiological Health. Device advice. Device classes. [FDA Web site]. 11/21/02. Available at: http://www.fda.gov/cdrh/devadvice/3132.html. Accessed March 28, 2008.

US Food and Drug Administration (FDA). Center for Devices and Radiological Health. Device advice. Premarket notification 510(k). [FDA Web site]. 11/01/06. Available at: http://www.fda.gov/cdrh/devadvice/314.html. Accessed March 28, 2008.

US Food and Drug Administration (FDA). Center for Devices and Radiological Health. Humanitarian use devices. Listing of CDRH humanitarian device exemption summaries of safety and possible benefit. [FDA Web site]. 11/24/03. Available at: http://www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfHDE/HDEInformation.cfm. Accessed March 28, 2008.

US Food and Drug Administration (FDA). Center for Devices and Radiological Health. 510(k) overview. [FDA Web site]. 11/15/96. Available at: http://www.fda.gov/cdrh/510k.html. Accessed March 28, 2008.

US Food and Drug Administration (FDA). Federal Food, Drug, and Cosmetic Act. Chapter II—Definitions. �201 [21 U.S.C. 321] (h). [FDA Web site]. Original: 06/26/38. (Revised: 12/31/04). Available at: http://www.fda.gov/opacom/laws/fdcact/fdcact1.htm. Accessed March 28, 2008.

Coding Table

Inclusion of a code in this table does not imply reimbursement. Eligibility, benefits, limitations, exclusions, precertification/referral requirements, provider contracts, and Company policies apply.

The codes listed below are updated on a regular basis, in accordance with nationally accepted coding guidelines. Therefore, this policy applies to any and all future applicable coding changes, revisions, or updates.

In order to ensure optimal reimbursement, all health care services, devices, and pharmaceuticals should be reported using the billing codes and modifiers that most accurately represent the services rendered, unless otherwise directed by the Company.

Code System	Code Number(s) and Narrative(s)
CPT	N/A
ICD Procedure	N/A
ICD Diagnosis	N/A
HCPCS Level II	Due to the general nature of this policy, no code information is included.

Revenue Codes	N/A

Cross References

Cross Reference Policies

00.10.37:

Humanitarian Use Devices (HUD) and the Humanitarian Device Exemption (HDE) Process

05.00.21i:Durable Medical Equipment (DME)

11.02.16j:Ventricular Assist Devices (VADs)

11.03.15e:Gastric Electrical Stimulation (Enterra™), Gastric Pacing

Version Effective Date: 01/20/2006