U.S. to End ‘Sweet Deal’ for Breakthrough Medical Devices, Change Reimbursement Policy After 3 Years

The Centers for Medicare & Medicaid Services (CMS) is pursuing a policy under which medical devices designated as “breakthrough devices” by the Food and Drug Administration (FDA) would receive additional reimbursement only if they demonstrate “substantial clinical improvement.”

According to biotech publication STAT on the 15th (local time), CMS proposed eliminating the current policy that allows breakthrough devices to receive additional reimbursement based solely on the fact that they are costly. The proposal would reverse a regulation introduced in 2021 after 3 years.

Currently, products designated as breakthrough devices by the FDA can receive additional Medicare payments by demonstrating only that they are expensive. The measure was intended to encourage health care providers to adopt new technologies without bearing the cost burden.

If the proposal is approved, breakthrough devices would once again have to meet the stricter standards that were in place before 2021. To qualify for additional reimbursement, manufacturers would have to demonstrate all three criteria: that the technology is new and not previously available, provides substantial clinical improvement over existing treatments, and is costly.

CMS’s additional reimbursement program has operated since 2001 to prevent hospitals from avoiding the adoption of innovative technologies because of cost concerns and to improve patients’ access to new technologies. The proposed policy change is being interpreted as a signal that the “sweet deal” for breakthrough devices is ending and that stricter standards will once again apply.