CMS eyes device-payment rollback
CMS proposed removing a payment pathway that had given supplemental payments to certain breakthrough devices, a change that could tighten early financial support for novel diagnostics. The proposal came from a STAT report describing how the rollback would affect devices that relied on payment flexibilities during adoption. (statnews.com)
Medicare is moving to end a shortcut that let some Food and Drug Administration-designated devices collect extra hospital payments with less evidence. (statnews.com) The Centers for Medicare and Medicaid Services included the change in its fiscal year 2027 hospital inpatient payment proposal issued April 10. Public comments on the rule are due June 9, 2026. (cms.gov) The payment at issue is the new technology add-on payment, or NTAP, which gives hospitals extra money for costly new inpatient technologies. Under the current alternate pathway, devices with Food and Drug Administration breakthrough designation can qualify without separately proving “substantial clinical improvement” over existing options. (cms.gov) CMS also proposed ending the parallel alternate pathway for outpatient transitional pass-through payments. If the rule is finalized, breakthrough-designated devices would have to meet the same eligibility tests as other devices in both inpatient and outpatient settings. (mcdermottplus.com) The Food and Drug Administration’s breakthrough designation is a development and review program, not a Medicare payment decision. It is available for devices that may offer more effective diagnosis or treatment of life-threatening or irreversibly debilitating conditions. (fda.gov) That distinction has mattered since 2021, when Medicare began treating breakthrough designation as enough to bypass part of the usual NTAP showing. STAT reported that, under the current policy, those devices mainly had to show they were expensive. (statnews.com) CMS’s separate Transitional Coverage for Emerging Technologies program still exists. That pathway, finalized in August 2024, is meant to speed national Medicare coverage reviews for up to five breakthrough devices a year, with a goal of finishing a national coverage determination within six months after Food and Drug Administration market authorization. (cms.gov) Hospitals are paid under the inpatient prospective payment system mostly through fixed case rates tied to a patient’s diagnosis, treatment, and severity of illness. NTAP was created as a temporary top-up because those base rates can lag the real cost of a newly launched device. (cms.gov) AdvaMed, the device industry trade group, told STAT the proposal could make it harder for hospitals to adopt new tools early, especially diagnostics and other technologies with high upfront costs. CMS did not spell out that critique in its fact sheet, which focused on the broader payment rule. (statnews.com) The proposal is only that for now: a proposal. The next test is whether CMS keeps the rollback in the final fiscal year 2027 payment rule after the June 9 comment deadline. (cms.gov)
