Dive Brief:
- The Centers for Medicare and Medicaid Services has proposed repealing the alternative pathway for new technology add-on payments, or NTAP, beginning in fiscal year 2028. The change is included as part of the 2027 Inpatient Prospective Payment System proposed rule.
- Under the proposal, medical devices with breakthrough device designation would be required to meet the same eligibility criteria as other available technologies to receive the additional payments under the NTAP program.
- Industry trade group AdvaMed said the alternative pathway policy, implemented by the first Trump administration, has worked well. AdvaMed, in an emailed statement to MedTech Dive, said “it would be disappointing if this progress were rolled back.”
Dive Insight:
To be eligible to receive add-on payments, new technologies must meet three criteria: They must be new, costly and demonstrate a substantial clinical improvement over existing technologies.
The CMS established an alternative inpatient NTAP pathway for certain transformative devices in the final rule for 2020. The alternative pathway removed the requirement to demonstrate substantial clinical improvement.
The CMS now wants to bring back that requirement. Under the proposed rule, all devices would again need to represent an advance that substantially improves the diagnosis or treatment of Medicare beneficiaries.
The agency said that after gaining experience with the alternative pathway, it has concerns with the limited evaluation process for applications for new technology add-on payments and for device pass-through payments under the Outpatient Prospective Payment System, or OPPS. It is also proposing to repeal the alternative pathway for OPPS path-through payments.
“After further consideration, we believe it is in the best interest of Medicare patients to refine our approach,” the CMS wrote. “By requiring all technologies to demonstrate that they offer a substantial clinical improvement as part of our evaluation process, we believe we will be better able to make evidence-based decisions on which technologies should receive these additional payments.”
The Food and Drug Administration’s breakthrough device program was designed to speed patient access to technology that could provide a more effective treatment or diagnosis for life-threatening conditions.
The FDA granted 164 breakthrough device designations in fiscal 2025. As of Dec. 31, the Center for Devices and Radiological Health had granted a total of 1,226 breakthrough device designations, including devices originally designated under the expedited access pathway program.
AdvaMed said that with current NTAP policy, the role the CMS can play in incentivizing medical innovation was understood.
“Under this policy, small medtech companies and innovators could see a path toward new diagnostics and treatments,” the group said. “We are working closely with CMS leadership on what we hope is a misunderstanding of this program and its critical role in American medtech leadership.”
