NOVEL Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2326 To amend titles XI and XVIII of the Social Security Act to provide for expedited coding and coverage of novel medical products, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 30, 2019 Mr. BURR (for himself, Mr. BENNET, Mr. SCOTT of South Carolina, and Mr. CARPER) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend titles XI and XVIII of the Social Security Act to provide for expedited coding and coverage of novel medical products, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘New Opportunities for 4 Value that Extend Lives Act of 2019’’ or the ‘‘NOVEL 5 Act of 2019’’. 6 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 2 •S 2326 IS SEC. 2. EXPEDITED CODING OF NOVEL MEDICAL PROD- 1 UCTS. 2 Section 1174(b)(2)(B) of the Social Security Act (42 3 U.S.C. 1320d–3(b)(2)(B)) is amended by adding at the 4 end the following new clauses: 5 ‘‘(iii) EXPEDITED CODING OF NOVEL 6 MEDICAL PRODUCTS.— 7 ‘‘(I) IN GENERAL.—Notwith- 8 standing paragraph (1), in the case of 9 a novel medical product (as defined in 10 clause (iv)), the Secretary shall make 11 modifications to the HCPCS code set 12 at least once every quarter. 13 ‘‘(II) REQUEST.—Upon the writ- 14 ten confidential request of a manufac- 15 turer of a novel medical product, the 16 Secretary shall make a determination 17 whether to assign a HCPCS code to 18 such product. Such request may occur 19 on or after the date on which the 20 product receives a designation as a 21 breakthrough therapy under section 22 506(a) of the Federal Food, Drug, 23 and Cosmetic Act (21 U.S.C. 356(a)), 24 a breakthrough device under section 25 515B of such Act (21 U.S.C. 360e– 26 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 3 •S 2326 IS 3), or a regenerative advanced therapy 1 under section 506(g) of such Act (21 2 U.S.C. 356(g)). 3 ‘‘(III) DEADLINE FOR DETER- 4 MINATION; NOTIFICATION.—The Sec- 5 retary shall— 6 ‘‘(aa) not later than 180 cal- 7 endar days after receiving the re- 8 quest of a manufacturer under 9 subclause (II), make a deter- 10 mination under such subclause 11 with respect to the request; and 12 ‘‘(bb) not later than 30 cal- 13 endar days after making such de- 14 termination, notify the manufac- 15 turer of the determination. 16 ‘‘(IV) MONITORING UTILIZATION 17 AND OUTCOMES.—A HCPCS code as- 18 signed under this clause shall allow 19 for the reliable monitoring of utiliza- 20 tion and outcomes of the novel med- 21 ical product as described in clause 22 (vi). 23 ‘‘(V) EFFECTIVE DATE OF CODE 24 ASSIGNMENT.—If the Secretary makes 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 4 •S 2326 IS a determination to assign a HCPCS 1 code to a product under subclause 2 (II), such code— 3 ‘‘(aa) may be assigned with- 4 in the first quarter after the 5 manufacturer files, with respect 6 to such product, a new drug ap- 7 plication under section 505(b) of 8 the Federal Food, Drug, and 9 Cosmetic Act (21 U.S.C. 355(b)), 10 a biological product license appli- 11 cation under section 351(a) of 12 the Public Health Service Act 13 (42 U.S.C. 262(a)), a premarket 14 application under section 515(c) 15 of the Federal Food, Drug, and 16 Cosmetic Act (21 U.S.C. 17 360e(c)), a report under section 18 510(k) of such Act (21 U.S.C. 19 360k), or a request for classifica- 20 tion under section 513(f)(2) of 21 such Act (21 U.S.C. 360c(f)(2)); 22 and 23 ‘‘(bb) may not take effect 24 before the date the product is ap- 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 5 •S 2326 IS proved, cleared, or licensed by 1 the Food and Drug Administra- 2 tion. 3 ‘‘(VI) TRADE SECRETS AND CON- 4 FIDENTIAL INFORMATION.—No infor- 5 mation submitted under subclause (II) 6 shall be construed as authorizing the 7 Secretary to disclose any information 8 that is a trade secret or confidential 9 information subject to section 10 552(b)(4) of title 5, United States 11 Code. 12 ‘‘(iv) NOVEL MEDICAL PRODUCT DE- 13 FINED.—For purposes of this subpara- 14 graph, the term ‘novel medical product’ 15 means a drug, biological product, or med- 16 ical device— 17 ‘‘(I) that has not been assigned a 18 HCPCS code; and 19 ‘‘(II) that has been designated as 20 a breakthrough therapy under section 21 506(a) of the Federal Food, Drug, 22 and Cosmetic Act (21 U.S.C. 356(a)), 23 a breakthrough device under section 24 515B of such Act (21 U.S.C. 360e– 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 6 •S 2326 IS 3), or a regenerative advanced therapy 1 under section 506(g) of such Act (21 2 U.S.C. 356(g)). 3 ‘‘(v) HCPCS DEFINED.—For pur- 4 poses of this subparagraph, the term 5 ‘HCPCS’ means the Healthcare Common 6 Procedure Coding System. 7 ‘‘(vi) INPATIENT PRODUCTS.—The 8 Secretary shall establish a code modifier 9 within the hospital inpatient prospective 10 payment system under section 1886(d) to 11 track the utilization and outcomes of novel 12 medical products that are assigned a 13 HCPCS code pursuant to the expedited 14 coding process under clause (iii) and are 15 furnished by hospitals in inpatient set- 16 tings.’’. 17 SEC. 3. COVERAGE DETERMINATIONS FOR NOVEL MEDICAL 18 PRODUCTS. 19 Section 1862(l) of the Social Security Act (42 U.S.C. 20 1395y(l)) is amended by adding at the end the following 21 new paragraph: 22 ‘‘(7) COVERAGE PATHWAY FOR NOVEL MEDICAL 23 PRODUCTS.— 24 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 7 •S 2326 IS ‘‘(A) IN GENERAL.—The Secretary shall 1 facilitate an efficient coverage pathway to expe- 2 dite a national coverage decision for coverage 3 with evidence development process under this 4 title for novel medical products described in 5 subparagraph (D). The Secretary shall review 6 such novel medical products for the coverage 7 process on an expedited basis, beginning as 8 soon as the Secretary assigns a HCPCS code to 9 the product under clause (iii)(V)(aa) of section 10 1174(b)(2)(B). 11 ‘‘(B) DETERMINATION OF COVERAGE WITH 12 EVIDENCE DEVELOPMENT.—Such coverage 13 pathway shall include, with respect to such 14 novel medical products, if the Secretary deter- 15 mines coverage with evidence development is 16 appropriate, issuance of a national coverage de- 17 termination of coverage with evidence develop- 18 ment for a period up to, but not to exceed, 4 19 years from the date of such determination. 20 ‘‘(C) MODERNIZING PAYMENT OPTIONS 21 FOR NOVEL MEDICAL PRODUCTS.—Not later 22 than 4 years after issuing such national cov- 23 erage determination, the Secretary shall submit 24 to Congress and to the manufacturer of the 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 8 •S 2326 IS novel medical product a report providing op- 1 tions for alternative payment models under this 2 title for the novel medical product or class of 3 such products, which may include the utilization 4 of existing models in the commercial health in- 5 surance market. Such report shall include any 6 recommendations for legislation and adminis- 7 trative action as the Secretary determines ap- 8 propriate to facilitate such payment arrange- 9 ments. 10 ‘‘(D) NOVEL MEDICAL PRODUCTS DE- 11 SCRIBED.—For purposes of this paragraph, a 12 novel medical product described in this subpara- 13 graph is a novel medical product, as defined in 14 clause (iv) of section 1174(b)(2)(B), that is as- 15 signed a HCPCS code pursuant to the expe- 16 dited coding process under clause (iii) of such 17 section. 18 ‘‘(E) CLARIFICATION.—Nothing in this 19 paragraph shall prevent the Secretary from 20 issuing a noncoverage or a national coverage 21 determination for a novel medical product.’’. 22 SEC. 4. ENHANCING COORDINATION WITH THE FOOD AND 23 DRUG ADMINISTRATION. 24 (a) PUBLIC MEETING.— 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 9 •S 2326 IS (1) IN GENERAL.—Not later than 12 months 1 after the date of the enactment of this Act, the Sec- 2 retary shall convene a public meeting for the pur- 3 poses of discussing and providing input on improve- 4 ments to coordination between the Food and Drug 5 Administration and the Centers for Medicare & Med- 6 icaid Services in preparing for the availability of 7 novel medical products (as defined in section 8 1174(b)(2)(B)(iv) of the Social Security Act, as 9 added by section 2) on the market in the United 10 States. 11 (2) ATTENDEES.—The public meeting shall in- 12 clude— 13 (A) representatives of relevant Federal 14 agencies, including representatives from each of 15 the medical product centers within the Food 16 and Drug Administration and representatives 17 from the coding, coverage, and payment offices 18 within the Centers for Medicare & Medicaid 19 Services; 20 (B) stakeholders with expertise in the re- 21 search and development of novel medical prod- 22 ucts, including manufacturers of such products; 23 (C) representatives of commercial health 24 insurance payers; 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 10 •S 2326 IS (D) stakeholders with expertise in the ad- 1 ministration and use of novel medical products, 2 including physicians; and 3 (E) stakeholders representing patients and 4 with expertise in the utilization of patient expe- 5 rience data in medical product development. 6 (3) TOPICS.—The public meeting shall include 7 a discussion of— 8 (A) the status of the drug and medical de- 9 vice development pipeline related to the avail- 10 ability of novel medical products; 11 (B) the anticipated expertise necessary to 12 review the safety and effectiveness of such prod- 13 ucts at the Food and Drug Administration and 14 current gaps in such expertise, if any; 15 (C) the expertise necessary to make cod- 16 ing, coverage, and payment decisions with re- 17 spect to such products within the Centers for 18 Medicare & Medicaid Services, and current gaps 19 in such expertise, if any; 20 (D) trends in the differences in the data 21 necessary to determine the safety and effective- 22 ness of a novel medical product and the data 23 necessary to determine whether a novel medical 24 product meets the reasonable and necessary re- 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 11 •S 2326 IS quirements for coverage and payment under 1 title XVIII of the Social Security Act pursuant 2 to section 1862(a)(1)(A) of such Act (42 U.S.C. 3 1395y(a)(1)(A)); 4 (E) the availability of information for 5 sponsors of such novel medical products to meet 6 each of those requirements; and 7 (F) the coordination of information related 8 to significant clinical improvement over existing 9 therapies for patients between the Food and 10 Drug Administration and the Centers for Medi- 11 care & Medicaid Services with respect to novel 12 medical products. 13 (4) TRADE SECRETS AND CONFIDENTIAL IN- 14 FORMATION.—No information discussed as a part of 15 the public meeting under this section shall be con- 16 strued as authorizing the Secretary to disclose any 17 information that is a trade secret or confidential in- 18 formation subject to section 552(b)(4) of title 5, 19 United States Code. 20 (b) IMPROVING TRANSPARENCY OF CRITERIA FOR 21 MEDICARE COVERAGE.— 22 (1) UPDATING GUIDANCE.—Not later than 18 23 months after the public meeting under subsection 24 (a), the Secretary of Health and Human Services 25 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 12 •S 2326 IS shall update the final guidance entitled ‘‘National 1 Coverage Determinations with Data Collection as a 2 Condition of Coverage: Coverage with Evidence De- 3 velopment’’ to improve the availability and coordina- 4 tion of information as described in subparagraphs 5 (D) through (F) subsection (a)(3), and clarify novel 6 medical product clinical data requirements to meet 7 reasonable and necessary requirements for coverage 8 and payment under title XVIII of the Social Secu- 9 rity Act. 10 (2) FINALIZING UPDATED GUIDANCE.—Not 11 later than 12 months after issuing draft guidance 12 under paragraph (1), the Secretary shall finalize the 13 updated guidance. 14 SEC. 5. REPORT ON CODING, COVERAGE, AND PAYMENT 15 PROCESSES UNDER MEDICARE FOR NEW 16 MEDICAL PRODUCTS. 17 (a) IN GENERAL.—Not later than 12 months after 18 the date of enactment of this Act, the Secretary of Health 19 and Human Services shall publish a report on the internet 20 website of the Department of Health and Human Services 21 regarding processes under the Medicare program under 22 title XVIII of the Social Security Act (42 U.S.C. 1395 23 et seq.) with respect to the coding, coverage, and payment 24 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2326.IS S2326 kjohnson on DSK79L0C42 with BILLS 13 •S 2326 IS of medical products described in subsection (b). Such re- 1 port shall include the following: 2 (1) A description of challenges in the coding, 3 coverage, and payment processes under the Medicare 4 program for medical products described in such sub- 5 section. 6 (2) Recommendations to— 7 (A) incorporate patient experience data 8 (such as the impact of a disease or condition on 9 the lives of patients and patient treatment pref- 10 erences) into the coverage and payment proc- 11 esses within the Centers for Medicare & Med- 12 icaid Services; 13 (B) decrease the length of time to make 14 national and local coverage determinations 15 under the Medicare program (as those terms 16 are defined in subparagraph (A) and (B), re- 17 spectively, of section 1862(l)(6) of the Social 18 Security Act (42 U.S.C. 1395y(l)(6))); 19 (C) streamline the coverage process under 20 the Medicare [Text truncated for display. Full text available on Congress.gov.]