Devices

FDA Definition of a Device

Medical devices range from simple tongue depressors and bedpans to complex programmable pacemakers with micro-chip technology and laser surgical devices. In addition, medical devices include in vitro diagnostic products, such as general purpose lab equipment, reagents, and test kits, which may include monoclonal antibody technology. Certain electronic radiation emitting products1 with medical application and claims meet the definition of medical device. Examples include diagnostic ultrasound products, x-ray machines and medical lasers. If a product is labeled, promoted or used in a manner that meets the following definition in section 201(h) of the Federal Food Drug & Cosmetic (FD&C) Act it will be regulated by the Food and Drug Administration (FDA)2 as a medical device and is subject to premarketing and postmarketing regulatory controls. A device is:

  • "an instrument, apparatus, implement, machine, contrivance, 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 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 man or other animals, or
    • intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its primary intended purposes."

This definition provides a clear distinction between a medical device and other FDA regulated products such as drugs. If the primary intended use of the product is achieved through chemical action or by being metabolized by the body, the product is usually a drug. Human drugs are regulated by FDA's Center for Drug Evaluation and Research3 (CDER). Biological products which include blood and blood products, and blood banking equipment are regulated by FDA's Center for Biologics Evaluation and Research4 (CBER).

Medicare processes claims using existing criteria to determine medical necessity. Medicare has covered the cost of certain investigational devices and services incident to investigational device exemption studies (IDE) since November 1, 1995. Recently the Centers for Medicare and Medicaid Services (CMS) established new regulations related to Medicare coverage for investigational device exemption studies. The new regulation are effective as of January 1, 2015 and specify 10 study criteria an IDE trial should exhibit for CMS to consider the trial as ‘approved’ for Medicare coverage. The new regulations also establish a centralized review process for approval of the Category A and category B IDE studies.

Currently investigators conducting IDE studies are responsible for submitting information regarding the device, the clinical trial and the participating Medicare beneficiaries to their local Medicare contractor to find out if the study was ‘approved’ for Medicare coverage of the device and/or routine costs. On and after January 1, 2015 interested parties (i.e. study sponsors) seeking Medicare coverage for Category A and Category B IDE studies must submit their request for review and approval to CMS. Additional information regarding the submission of the review request under the new process, along with the list of CMS-approved studies is available on the CMS Coverage Website.

IDE studies approved by local Medicare contractor’s (MAC) prior to January 1, 2015 will continue to be administered by the contractor and study sponsors do not have to submit the protocol to CMS if the participating study investigator sites have already received approval from their MAC. Study sponsors should continue to follow the process established by the MAC for any site additions or protocol changes.

Devices that may be covered under Medicare include:

  • those approved by the FDA through the Pre-Market Approval (PMA) process
  • those cleared by FDA through 510(k) process
  • FDA-approved Category B devices - The local Medicare office determines if the device will be paid based on data submitted by the provider.
  • Hospital IRB approved IDE (investigational device exemption) devices (same criteria as Category B)

Criteria for coverage on FDA-approved IDE category B devices:

  • The device must be used in FDA approved trial
  • The device must be used in accordance with protocol
  • There may be an established national policy as contained in existing manual instructions, e.g., National Coverage Determinations Manual instructions, etc.;
  • In the absence of national policy, there may be a local policy for similar FDA-approved devices
  • There may be Policy/Position papers or recommendations made by pertinent national and/or local specialty societies.

Category A Devices

The CMS Manual System Department of Health & Human Services (DHHS) Centers for Medicare & Medicaid Services (CMS) has published a detailed report regarding coverage of routine costs of clinical trials involving Investigational Device Exemption (IDE) Category A Devices. Click here to view.

Source: Medicare Benefit Policy Manual chapter 14

IRB approved studies with Non-Significant devices without a FDA-approved IDE

Medicare contractors have been responsible for making coverage determinations on non-significant devices which do not require an FDA-approved IDE and are the responsibility of the hospital institutional review board (IRB). The contractors have been instructed to apply the same coverage criteria, where appropriate, to non-significant risk devices approved by the IRB as is applied to FDA-approved IDE Category B devices.

Documents to Help with CMS Approval

The following documents may assist investigators seeking approval from the local Medicare Administrative Contractor (National Government Services) for costs of items and services associated with Category A or B studies under the regulations in effect prior to January 1, 2015.

Effective for Category A and B IDE studies approved by the FDA on or after January 1, 2015, the request for and approval of the costs associated with the study should occur directly with CMS. Information regarding how to request coverage and IDE studies that have CMS-approval may be found at: http://www.cms.gov/Medicare/Coverage/IDE/index.html.

The following CMS checklist document may assist sponsor-investigators conducting Category A or B IDE studies with their submission to CMS.

Claims Processing for Medicare ‘Approved’ IDE Studies

Claims for items and services associated IDE trials may need a specific modifier, diagnosis code, the IDE number and the 8-digit clinical trial number assigned by the National Library of Medicine. More information regarding the requirements is contained within the following CMS documents:


  • Claims processing transmittal for Category A and B IDE studies (R3105CP) Dated 11/6/2014
  • Claims processing transmittal for 8-digit Clinical Trial # (R2955CP) Dated 5/14/2014
  • Med Learns Matter on Coverage of category A and B IDE Studies (MM8921) Effective 1/1/2015

Coding Data required by Medicare for ‘Approved’ Category A and Category B Investigational Device studies

Category A IDE study

Category B IDE study

Q0 modifier

Not applicable for the Category A investigational device itself (Medicare does not cover them); Yes for a claim listing other investigational services associated with the study

Yes for the investigational device claim if Medicare approved coverage of the device, device is not promised free of charge in the cost and/or  sponsor is not covering cost; Yes for a claim listing other investigational services associated with the study

FDA-approved IDE #

Yes for a claim with investigational service with the Q0 modifier

Yes for a claim with investigational items or services with the Q0 modifier

Q1 modifier

Yes for a routine items and service claim

Yes for a routine items and service claim

V70.7 diagnosis code

Yes for a routine or investigational study related items/service claim

Yes for a routine or investigational study related items/service claim

8-digit Clinical Trial Number assigned by National Library of Medicine

Yes for a routine or investigational study related items/service claim

Yes for a routine or investigational study related items/service claim

Study Criteria used by CMS for Category A and B IDE studies on or after January 1, 2015

Effective January 1, 2015, the Medicare Coverage IDE Study Criteria (CFR § 405.212) that will be used by CMS to determine if the IDE study  is ‘approved’ include: 

  1. The principal purpose of the study is to test whether the device improves health outcomes of appropriately selected patients.*
  2. The rationale for the study is well supported by available scientific and medical information, or it is intended to clarify or establish the health outcomes of interventions already in common clinical use.*
  3. The study results are not anticipated to unjustifiably duplicate existing knowledge.*
  4. The study design is methodologically appropriate and the anticipated number of enrolled subjects is adequate to confidently answer the research question(s) being asked in the study.*
  5. The study is sponsored by an organization or individual capable of successfully completing the study.*
  6. The study is in compliance with all applicable Federal regulations concerning the protection of human subjects found at 21 CFR parts 50, 56, and 812 and 45 CFR part 46.*
  7. Where appropriate, the study is not designed to exclusively test toxicity or disease pathophysiology in healthy individuals.  Studies of all medical technologies measuring therapeutic outcomes as one of the objectives may be exempt from this criterion only if the disease or condition being studied is life threatening and the patient has no other viable treatment option.*
  8. The study is registered with the National Institutes of Health’s National Library of Medicine ClinicalTrials.gov. (NCT#) *
  9. The study protocol describes the method and timing of release of results on all pre-specified outcomes, including release of negative outcomes and that the release should be hastened if the study is terminated early.
  10. The study protocol must describe how Medicare beneficiaries may be affected by the device under investigation, and how the study results are or are not expected to be generalizable to the Medicare beneficiary population.  Generalizability to populations eligible for Medicare due to age, disability, or other eligibility status must be explicitly described.”

* Criterion also required under The National Coverage Determination (NCD) for Routine Costs in Clinical Trials § 310.10.