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Policy & oversight

CMS Sets a Sunset Date for the NTAP Alternative Track for Breakthrough Devices and Advances the RAPID Pathway

The fiscal year 2027 hospital payment final rule phases out the alternative NTAP track that breakthrough-designated devices used to qualify for Medicare reimbursement, while a new CMS-FDA program called RAPID is positioned to take its place.

By the Goodsurance editorial teamAugust 5, 2026

CMS released its fiscal year 2027 Inpatient Prospective Payment System final rule on July 31, 2026, and it included a significant change to how newly approved medical devices qualify for extra Medicare hospital payments under the New Technology Add-On Payment program. Under the existing NTAP framework, devices that received FDA's Breakthrough Device designation could reach supplemental Medicare reimbursement through an alternative pathway based on that designation alone, without separately demonstrating substantial clinical improvement. The FY2027 final rule sets a sunset on that alternative track. To use it, a device must have received its Breakthrough Device designation by September 30, 2026, and must receive FDA marketing authorization by May 1, 2028. Devices that do not meet both cutoffs will need to qualify through the standard NTAP pathway, which requires a showing of substantial clinical improvement as well as the cost and newness criteria. At the same time, CMS and the FDA jointly announced the RAPID coverage pathway, short for Regulatory Alignment for Predictable and Immediate Device. RAPID is designed to expedite Medicare coverage for certain Class II and Class III breakthrough devices by aligning FDA review with Medicare coverage decisions. To be eligible, a device must be the subject of an Investigational Device Exemption study that enrolls Medicare beneficiaries and examines clinical outcomes jointly agreed upon by the two agencies. CMS estimates total NTAP payments across all qualifying technologies will increase by approximately 779 million dollars in fiscal year 2027.

In plain words

Medicare pays hospitals extra money when they use certain new, cutting-edge medical devices. One easier path for getting that extra payment is ending. To use that path, a device had to receive a special FDA label by September 30, 2026, and get full approval by May 2028. Devices that miss those dates must meet tougher rules to qualify. Going forward, CMS and the FDA have a new program called RAPID that gives some devices a faster path to Medicare coverage, but only if they are part of a study that includes Medicare patients.

Understand the basics first

Source: CMS
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