Medtronic (MDT): Renal Denervation Coverage Read-Through?
This morning’s opening of a Medicare National Coverage Determination (NCD) for privately-held Impulse Dynamics’ Optimizer System bolsters our view that coverage for renal denervation (RDN) systems [Medtronic (MDT), Otsuka / ReCor (4578.JT)] is unlikely to be established prior to YE25 or 1H26, even if a related coverage review is opened in the near-term.
What does the one have to do with the other? We’re so glad you asked….
From a product standpoint, the answer is nothing, but we suspect there is read-through in terms of process, which in turn informs timing.
As CMS notes in the Tracking Sheet for today’s NCD, “this is a Transitional Coverage for Emerging Technologies (TCET) pilot that tested the processes and concepts of TCET” (our emphasis), which investors will recall is a newly devised program established by CMS last year seeking to expedite coverage decisions for select breakthrough devices following FDA approval. The agency has signaled its goal of pursuing five TCET reviews each year, and there has been speculation that this may be a viable pathway for RDN.
Today’s NCD opening is also the third such TCET “pilot” CMS has announced, with the first two having been for Edwards Lifesciences’ (EW) Evoque Transcatheter Tricuspid Valve Replacement (TTVR) [opened June 20, 2024] and the second for Abbott’s (ABT) TriClip Transcatheter Tricuspid Edge-to-Edge Repair (T-TEER) [opened Oct. 3, 2024].
First, The Good News
With EW’s Evoque and ABT’s TriClip having originally been participants in the joint CMS / FDA Parallel Review program – a kind of TCET predecessor – and both related to tricuspid valve services, our working assumption has been that these may be the only “pilot” test cases the agency employs. This assumption was bolstered by CMS’s TCET guidance, finalized in August 2024, stating that “nominations for devices that are already FDA market authorized or those anticipated to receive an FDA decision within six months of nomination will not be accepted.”
FDA approved applicants, particularly those that were not previously in the Parallel Review pathway, may therefore have to navigate the traditional coverage process in which there is a standing wait list of eight other requests that CMS has already accepted but lacks the staffing capacity to initiate. Not only does RDN not appear on that list, but each review takes ~9 months to complete, and with a historic cadence of 4-5 NCDs per year, this could take some time.
The opening of today’s Impulse Dynamics NCD, however, suggests that not only is CMS looking out beyond the tricuspid space to employ fresh TCET pilots, but since – to our knowledge – neither they nor MDT / ReCor were Parallel Review participants, this approach remains a viable option for RDN to jump the wait list queue. In fact, Optimizer was first approved by FDA in March 2019, with its NCD request initially submitted in May 2022. This compares to the Nov. 7, 2023 approval for ReCor’s RDN and Nov. 17, 2023 for MDT’s Symplicity.
Now, The Bad News
- In short, even if such a review were announced today, it is unlikely that coverage would be finalized and established before 4Q25.
Each of the three announced TCET pilots are listed as having a full 9-month review schedule, consistent with traditional NCDs. This has triggered complaints from stakeholders, but we see little reason to suspect that RDN would merit an alternative approach.
Separately, thus far the cadence between TCT pilot announcements has been ~3.5 months, which would imply an RDN coverage review being announced in late April. Given the historic consistency of NCD reviews, such a timeframe would suggest a draft policy being released in late October and the finalized version published by late January.
In other words, as we said, today’s announcement bolsters our view that Medicare coverage of RDN is unlikely to be established before YE25 or 1H26.