CMS Ends Breakthrough Device Medicare Payment Fast Pass
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- CMS finalized a proposal to repeal alternative pathways that allowed FDA-designated "breakthrough" devices to qualify for supplemental Medicare payments without proving novelty or substantial clinical improvement over existing alternatives.
- The repeal applies to both inpatient and outpatient settings, with the new requirement taking effect in fiscal year 2028.
- Under the prior system, breakthrough devices could secure add-on Medicare payments solely through FDA authorization, bypassing the standard test of substantial clinical improvement.
- The supplemental payments are designed to incentivize hospitals to adopt expensive new technology while giving manufacturers time to demonstrate value.
- The rule states that requiring proven clinical improvement "ensures that additional Medicare payments are used to support Medicare beneficiaries' access to innovations that are demonstrated to improve outcomes compared to the currently available treatment."
Why it matters: Device makers who had relied on the FDA "breakthrough" designation as a shortcut to extra Medicare reimbursement will now face a higher evidentiary bar — demonstrating substantial clinical improvement — starting in FY2028, potentially slowing adoption and revenue for newer technologies while CMS redirects supplemental payments toward devices with proven outcomes.
