CMS Grandfathers Certain Breakthrough Devices for NTAP and TPT

The Centers for Medicare & Medicaid Services (CMS) has released its Fiscal Year 2027 Inpatient Prospective Payment System (IPPS) final rule. The rule generally eliminates the alternative New Technology Add-on Payment (NTAP) and outpatient device Transitional Pass-Through payment (TPT) pathways, but CMS added an important exception for certain technologies already in development or approaching commercialization.

“CMS’s decision provides important protection for companies that made development and investment decisions based on the availability of these pathways. The transition provision helps address the significant reliance interests raised during the rulemaking process.”

Amanda Johnston, Partner

Under the final rule:

• NTAP: A device that receives FDA Breakthrough Device designation by September 30, 2026, may remain eligible to apply through the alternative pathway for FY 2028 and FY 2029. The device must receive FDA marketing authorization for the indication covered by its Breakthrough Device designation by the applicable deadline and no later than May 1, 2028.
• TPT: A device that receives FDA Breakthrough Device designation by September 30, 2026, and receives marketing authorization for the designated indication may remain eligible to apply through the alternative pathway for CY 2028 and CY 2029.
• Existing approvals: Technologies previously approved for NTAP and existing TPT device category codes will continue under the applicable payment-duration requirements. 

“The exception is significant, but manufacturers will need to carefully manage the applicable Breakthrough Device designation, FDA authorization, and payment-application deadlines. Companies should evaluate their eligibility and timelines now.”

Nathan Downing, Managing Attorney

Why This Matters for Medical Device Companies

CMS originally proposed eliminating the alternative pathways beginning with FY 2028 NTAP applications and TPT applications received after September 30, 2026. Gardner Law was among the stakeholders who submitted comments opposing the proposed repeal, warning that it could slow hospital adoption of breakthrough devices, delay patient access, and disadvantage companies and investors that committed significant resources in reliance on the existing pathways. The final rule now provides a meaningful transitional pathway for many technologies already in development or approaching commercialization, supporting patient access, high-skilled U.S. jobs, and continued American leadership in medtech.

“This is welcome news for device manufacturers and investors that committed significant resources in reliance on these pathways. CMS’s transitional approach preserves a meaningful opportunity to pursue NTAP or TPT eligibility, help patients gain earlier access to breakthrough technologies, support high-skilled U.S. jobs, and strengthen America’s position as the global leader in medtech as China continues to advance.”

Mark Gardner, Managing Partner

CMS ultimately adopted a transitional approach after considering comments regarding technologies already in advanced stages of commercial development or already commercially available. The final rule does not preserve the alternative pathways indefinitely, but the limited exception provides meaningful additional time for many affected companies.

Medical device companies should promptly evaluate whether their products:

• Have received, or could receive, Breakthrough Device designation by September 30, 2026.
• Can obtain FDA marketing authorization within the applicable NTAP or TPT timeline.
• Have evidence, coding, and reimbursement strategies aligned with the FY 2028, FY 2029, CY 2028, or CY 2029 application cycles.

“Manufacturers should coordinate their FDA, clinical evidence, coding, and reimbursement strategies as early as possible. Those workstreams will directly affect whether a technology can take advantage of this limited transition period.”

Jake Leys, Associate Attorney

How Gardner Law Can Help

Gardner Law helps medical device companies coordinate FDA regulatory strategy, evidence development, reimbursement planning, and commercialization. Please contact Mark Gardner, Amanda Johnston, Nathan Downing, or Jake Leys with questions about how the final rule may affect your technology.