Navigating Medicare Transitional Pass Through Payment (TPT): Insights from Years of CMS Decisions
If you’re launching a new medical device that serves Medicare patients, securing Transitional Pass-Through (TPT) payment could mean the difference between adoption and inertia.
TPT is a unique opportunity. It provides temporary, separate reimbursement under the Medicare hospital outpatient prospective payment system (OPPS) for new devices that meet certain criteria—before they’re bundled into packaged payment rates. For many companies, TPT can help bridge the gap between market clearance and long-term payment stability, making it a critical part of a launch strategy.
At Gettysburg Healthcare Consulting, we’ve analyzed years of CMS TPT decisions to help device manufacturers like you understand what works, what doesn’t, and why. With decades of Medicare policy experience and a track record of helping clients navigate reimbursement pathways, we translate CMS policy into actionable strategy.
WHAT IS MEDICARE TRANSITIONAL PASS THROUGH PAYMENT?
TPT is a temporary Medicare add-on payment for new medical devices used in hospital outpatient settings.
It provides separate reimbursement before the device is bundled into standard payment rates.
CMS will only approve TPT if your device is:
• New
• Costly
• Shows Substantial Clinical Improvement — unless it qualifies for the alternative “breakthrough” pathway
WHAT OUR ANALYSIS REVEALS
✅ Approval isn’t guaranteed — CMS denies nearly 50% of applications
TPT is not a rubber stamp. Our data shows that nearly half of all TPT applications were denied by CMS. This means your application must be carefully constructed, with strong evidence and a clear policy narrative that addresses each criterion.
🧪 Most denials fail the “clinical improvement” test — not cost
In most denied applications, the fatal flaw wasn’t cost or coding—it was a failure to demonstrate Substantial Clinical Improvement (SCI). CMS wants to see that your device meaningfully improves outcomes over existing technologies. Evidence gaps or weak comparisons can quickly tank your chances.
🚀 Breakthrough-designated devices have a much higher approval rate
Devices that qualify for the “alternative pathway” (e.g., FDA Breakthrough Devices or certain PMA/HDE products) are exempt from the SCI requirement. These products had a significantly higher success rate. If your device qualifies, this pathway is one of the strongest levers you can pull.
🔁 Reapplying can work — some companies succeed on their second try
We observed several instances where companies were initially denied but later succeeded with a revised application. Often, they supplemented their original evidence or clarified how their device met CMS criteria. A denial isn’t always the end of the road—it can be a signal to regroup and strengthen your case.
⏱️ TPT is time-limited — you get 2–3 years of bonus payment, max
TPT payment is temporary. If approved, your device receives separate Medicare reimbursement for up to three years, after which it will be folded into bundled outpatient payments. You must plan ahead for what happens when TPT expires.
WHO CAN WE HELP?
We work with:
• Early-stage medtech companies preparing to launch
• Market access teams seeking Medicare strategy
• Investors performing reimbursement diligence
HOW CAN WE HELP?
Ready to apply for TPT or need help deciding if it’s right for you?
Book a complimentary 30-minute consultation.
Our Expertise Shines
- Working with an experienced healthcare consultant with over 30 years of experience with the Medicare program provides you with a level of knowledge and skill unmatched in the industry.
- Our comprehensive understanding of Medicare Outpatient payment helps avoid reimbursement disasters.
- Clients trust us to review their devices and help navigate through the Medicare TPT process
Learn more on CMS’s Medicare Transitional Pass Through Payment policy page
FAQ
What is TPT Payment?
A temporary Medicare add-on payment for new outpatient devices that meet specific criteria: newness, cost, and clinical benefit.
How long does TPT last?
TPT payment lasts up to three years, after which the device becomes part of bundled outpatient payment.
Who reviews TPT applications?
CMS evaluates TPT requests during the annual OPPS rulemaking cycle, typically finalizing decisions by November each year.
What is "substantial clinical improvement"?
It means your device offers meaningful benefits over existing treatments—like reduced complications, faster recovery, or improved quality of life.
Can I apply more than once?
Yes. CMS allows reapplications, and some previously denied products have been approved in later years with stronger evidence.
What's the alternative pathway?
If your device has Breakthrough Device designation or similar FDA status, you may bypass the clinical improvement requirement.
What do I do next?
Book a free 30 minute consultation and we can discuss your options. Visit the contact us page.
