CMS proposes rolling back breakthrough device payment flexibilities

Katie Palmer covers telehealth, clinical artificial intelligence, and the health data economy — with an emphasis on the impacts of digital health care for patients, providers, and businesses. You can reach Katie on Signal at palmer.01.

The Centers for Medicare and Medicaid Services is proposing to repeal a pathway that currently allows breakthrough devices to qualify for supplementary payments without proving they provide a substantial clinical improvement over alternatives.

Access to lifesaving new technologies can be stymied when hospitals don’t get paid enough to cover their costs. So since 2001, Medicare has given innovative devices a chance at extra payments when they meet three criteria: they’re new and different from what’s currently available, they offer a clinical improvement over existing options, and they’re especially costly.

Since 2021, devices that receive breakthrough designation from the Food and Drug and Administration have gotten an even sweeter deal: In order to qualify for the extra payments, they only have to demonstrate they’re expensive.