Medicare ends special payment routes for FDA breakthrough devices starting FY 2028
CMS will scrap the extra-payment pathways that let FDA-designated breakthrough devices receive supplemental Medicare funds without proving substantial clinical benefit, effective fiscal year 2028.
The Centers for Medicare and Medicaid Services has issued a rule, effective in fiscal year 2028, that revokes the special reimbursement pathways previously available to FDA-designated breakthrough devices. Those pathways had allowed hospitals to claim supplemental Medicare payments without demonstrating that the devices were novel or markedly superior to existing options. The new regulation applies to both inpatient and outpatient services and now mandates that manufacturers prove substantial clinical improvement compared with current treatments to qualify for extra payments.
CMS argues the revision will better align Medicare spending with technologies that truly enhance outcomes for beneficiaries. By removing these incentives, the policy pressures device makers to generate robust clinical evidence earlier in the product lifecycle. Stakeholders expect the shift to influence adoption timelines and pricing strategies for emerging medical technologies.
Why it matters
The rule changes how Medicare funds new medical devices, impacting patient access and manufacturers' evidence requirements.
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