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April 30, 2026 – In last week’s Regs & Eggs post, we discussed one notable proposal from the Centers for Medicare & Medicaid Services’ (CMS’s) fiscal year (FY) 2027 Inpatient Prospective Payment System (IPPS) proposed rule: the proposed Comprehensive Care for Joint Replacement Expansion model. Today, we’re back for a second helping from the IPPS proposed rule, and we’re diving into the proposal related to new technology add-on payments (NTAPs) and Transitional Pass-Through Payments (TPTP) for acute care hospitals. While we’re at it, we’ll also discuss the new Medicare Regulatory Alignment for Predictable and Immediate Device (RAPID) coverage pathway, recently announced by CMS and the US Food and Drug Administration (FDA). To help me discuss these policies, I’m bringing in my colleagues Maddie News, Erin Fuller, Deborah Godes, and Parashar Patel.
Under existing rules, new technologies used in the inpatient setting may be eligible to apply for an add-on payment known as NTAP. Devices and drugs must meet three criteria to be NTAP-eligible:
In the FY 2020 and FY 2021 IPPS final rules, CMS established alternative pathways for approval under NTAP for certain transformative new devices and antimicrobial products. Under these alternative pathways, FDA-designated breakthrough devices and FDA-designated qualified infectious disease products are considered to be not substantially similar to existing technology for purposes of NTAP, and thus do not need to meet the newness or substantial clinical improvement criteria. (They must still apply within two to three years of market launch, however.) These devices (and drugs) must still meet the cost criteria to be eligible for NTAP. This alternative pathway for breakthrough-designated devices also exists in the Outpatient Prospective Payment System (OPPS) and is known as the transitional pass-through (TPT) program.
In what would represent a significant shift in current policy, CMS proposed to repeal the alternative NTAP pathway and require all applicants, regardless of FDA designation, to meet the newness and substantial clinical improvement criteria in addition to the cost criteria. CMS stated that the goal would be to hold all applicants to the same standards, noting that requiring all applicants to demonstrate that their technologies meet the same criteria would better position the agency to make evidence-based decisions on which technologies should receive incremental payments.
If finalized, this policy change would be effective for NTAP applications submitted on or after October 1, 2026. CMS also proposed to repeal the alternative TPT program pathway for breakthrough devices seeking TPT approval, starting with all applications received for TPT status on or after October 1, 2026, including all applications received through the remainder of the CY 2028 OPPS application cycle. Technologies that have already received NTAP or TPT status would be eligible for payments through the remainder of their eligibility period, and technologies with submitted applications currently under review would still be able to leverage the alternate pathway.
If finalized, this policy would make the NTAP and TPT program application process substantially more difficult for drug and device manufacturers. Many companies report that meeting the substantial clinical improvement criteria, particularly for NTAP, can be a challenge because of the criteria’s subjective nature. In addition, in some cases, device manufacturers have planned and made business decisions relying on the alternative pathways currently in place. CMS proposed to repeal these pathways on a quick timeline, starting with the next NTAP cycle and the upcoming TPT program cycle.
In related news for device manufacturers, on April 23, 2026, CMS and FDA announced the RAPID coverage pathway, intended for certain FDA-designated breakthrough devices that address unmet medical needs among Medicare beneficiaries. Unlike other coverage pathway options, RAPID is designed to enable medical device manufacturers to engage early with CMS and the FDA to align current regulations pertaining to FDA market authorization and Medicare national coverage determinations (NCDs).
The RAPID coverage pathway will be available to certain Class II devices participating in the FDA Total Life Cyle Advisory Program (TAP) and Class III devices, regardless of whether they participate in TAP. Devices must be FDA-designated breakthrough devices that address unmet medical needs among Medicare beneficiaries. Devices also must be the subject of an investigational device exemption (IDE) study that enrolls Medicare beneficiaries and with clinical health outcomes agreed upon, in advance, by FDA and CMS.
Under RAPID, CMS and FDA will collaborate during the FDA review process to give medical device companies early feedback on the evidence needed for both regulatory authorization and national Medicare coverage. Participation in RAPID does not lower FDA’s standards for device authorization. Once an eligible device receives FDA market authorization, CMS will issue a proposed NCD the same day, immediately initiating the required 30-day public comment period. This approach could enable Medicare national coverage and payment in as little as two months after authorization, compared to approximately nine to 12 months or more under current pathways.
Similar to other coverage pathways, the device must still fall within an existing Medicare benefit category in order to obtain coverage. In addition, all Medicare Advantage (MA) plans are required to follow NCDs, so MA plans will not be able to issue noncoverage policies that conflict with fee-for-service policy (although MA plans may still impose prior authorization requirements). While CMS indicated that other pathways, including the traditional process for opening, deciding, or reconsidering NCDs, will continue to be available, CMS has paused the Transitional Coverage for Emerging Technologies pathway for new candidates to focus on the implementation of RAPID.
MedTech executives and investors are certainly looking closely at these policies. Here are some key questions they are likely considering now:
The industry will gain more clarity once the RAPID notice is published (timing to be determined) and the final IPPS policies are published on or around August 1, 2026. So stay tuned!
Finally, if this regs & eggs meal wasn’t enough to fill you up, listen to our Breakroom podcast and read our client alert on RAPID!
Until next week, this is Jeffrey (and Maddie, Erin, Deborah, and Parashar) saying, enjoy reading regs with your eggs.
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