The Breakthrough Device Shortcut Is Ending. Here's What Your Reimbursement Plan Needs Now.
CMS's FY 2027 IPPS final rule ends the Breakthrough Device shortcut to NTAP and TPT payment. The transition deadlines still open, and the three moves device teams should make now.
The Breakthrough Device Shortcut Is Ending. Here's What Your Reimbursement Plan Needs Now.
When CMS finalized the FY2027 Inpatient Prospective Payment System (IPPS) Final Rule this summer, it did more than set payment rates. It ended one of the most valuable shortcuts in medical device reimbursement — and the deadline that determined who keeps access to it has already passed.
If your market access strategy was built around FDA Breakthrough Device Designation (BDD) smoothing your path to Medicare payment, this rule changes your plan. Here's what changed, which transition windows remain open, and what to do about it.
What CMS finalized
The FY2027 IPPS Final Rule eliminates the alternative pathway for FDA-designated Breakthrough Devices under both:
The inpatient New Technology Add-on Payment (NTAP), and
The outpatient Transitional Pass-Through (TPT) payment
The alternative pathway allowed device companies to bypass the requirement to demonstrate "substantial clinical improvement" (SCI) as part of the NTAP and TPT processes. That matters because SCI has historically been the single biggest barrier to approval: only about 25% of traditional-pathway products have ever gained approval, largely because of this requirement.
In other words, the alternative pathway wasn't a convenience — for many Breakthrough Devices, it was the difference between early Medicare payment and years of waiting.
The transition windows CMS built in
CMS softened its original proposal with a phase-out. Three deadlines now govern who can still use the alternative pathway:
RequirementDeadlineStatusReceive Breakthrough Device DesignationSeptember 30, 2026PassedFDA approval/clearance for the BDD indication (inpatient NTAP)May 1, 2028OpenTPT application and approval (outpatient)By January 1, 2029Open
The details matter:
For outpatient TPT, the alternative pathway remains available for products that apply for and gain TPT approval as of January 1, 2029 — provided the product obtained BDD status within the qualifying window and is subsequently FDA-approved or cleared for the same indication.
For inpatient NTAP, the alternative pathway remains open through Fiscal Year 2029 for products that receive FDA approval or clearance by May 1, 2028 for the BDD indication.
What this means right now
The September 30, 2026 BDD deadline has passed. That splits the medtech market into two groups:
If you held BDD status by September 30, 2026 — the alternative pathway may still be available to you, but the clock is running. Inpatient products need FDA approval or clearance for the designated indication by May 1, 2028; outpatient products need to be through the TPT application and approval process by January 1, 2029. Every month of regulatory delay now has a direct reimbursement cost. Your regulatory and market access timelines need to be managed as one schedule, not two.
If you didn't — the alternative pathway is closed to you. Your route to NTAP or TPT is now the traditional pathway, which means building a substantial clinical improvement case from the start. That is a fundamentally different evidence strategy: it means thinking about SCI-grade evidence — comparative data, meaningful outcomes — during clinical development, not after FDA clearance.
Three moves for market access teams
Audit your pipeline against the deadlines. For every product with BDD status, map the FDA approval date against May 1, 2028 (inpatient) or the January 1, 2029 TPT window (outpatient). If approval is at risk of slipping past those dates, the reimbursement consequence is now concrete: the loss of the alternative pathway.
Rebuild the evidence plan around SCI. With roughly one in four traditional-pathway applications succeeding, a "we'll demonstrate improvement later" approach is a plan to fail. Engage health economics and clinical evidence teams early enough that the data you'll need for SCI exists when you need it.
Reprice Breakthrough Designation in your strategy. BDD remains valuable — for FDA engagement, for development speed, for investors. But it is no longer a reliable reimbursement accelerator. Companies that treated designation as a payment strategy need to revisit that assumption in their launch plans and their capital narratives.
The bigger picture
I have worked with the TPT and NTAP processes since they were implemented 25 years ago, and I consider this one of the most consequential policy changes in that time. The deeper signal is that regulatory innovation and reimbursement access are no longer moving in lockstep. The FDA will keep designating breakthroughs; CMS has decided that breakthrough status alone no longer justifies enhanced payment.
For manufacturers, that convergence — regulatory, clinical, and reimbursement strategy planned together from the earliest stages — is no longer a best practice. It's the price of entry.
Navigating NTAP, TPT, or a broader Medicare market access strategy? Market Access Experts helps device manufacturers build the reimbursement strategy, evidence plan, and payer engagement needed to succeed under the new rules. Contact us for a complimentary consultation, or call 480.717.7865.
David Davis is CEO of Market Access Experts, a consultancy specializing in medical device reimbursement, coding, coverage, and market access strategy. He has worked with the NTAP and TPT processes since their inception.
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