Should Medicare automatically pay for medical devices that the FDA deems ‘breakthrough’?

STAT News – Wednesday, January 14, 2026
By Katie Palmer

The Food and Drug Administration’s breakthrough device program continues to expand at a breakneck pace. Established to grease the wheels of regulatory conversation and submission for innovative devices that promise to help patients with debilitating disease, the FDA has stamped 1,176 products with the breakthrough label — and so far authorized 160 of them to enter the market.

As those 160 devices enter doctors’ offices and surgical suites, their implications for health care costs are expanding. In bipartisan bills before Congress, breakthrough devices are proposed to receive four years of automatic Medicare coverage. It’s an idea that has come and gone since the previous Trump administration, thanks in part to objections that a “breakthrough” label doesn’t guarantee better outcomes for patients than existing options. Now, health policy researchers are raising the alarm again.

With the regulatory flexibilities the FDA leverages when authorizing breakthrough devices, “we’re concerned that this will ultimately lead to low value or potentially harmful spending and utilization of devices that come to market with less rigorous evidence to support their use,” said physician Vinay Rathi, a health policy researcher at Ohio State University.

Some breakthrough technologies could help make health care more efficient and cost-effective. But if they’re paid for indiscriminately, the program could increase spending dramatically without improving patient outcomes. A 2022 STAT investigation found that device makers, rather than patients, reaped the biggest gains from FDA’s breakthrough devices program.

In the final days of the first Trump administration, the Centers for Medicare and Medicaid Services finalized a rule that would give FDA-designated breakthrough devices four years of automatic Medicare coverage. The rule was repealed by the Biden administration and later replaced with a program with more guardrails that gave transitional coverage to a more limited subset of devices.

Today, the Ensuring Patient Access to Critical Breakthrough Products Act has reintroduced the more expansive coverage plan for breakthroughs, along with a mandate for CMS to establish a plan for long-term coverage before the four-year period is up. It was passed by the House Ways and Means Committee in September and has been referred to the Senate Committee on Finance.

Medical device manufacturers, which can struggle to stay afloat in the sometimes years-long gap between an FDA authorization and reimbursement from Medicare, have embraced the bills being considered by federal lawmakers.

“This legislation ensures that delays in coverage and reimbursement decisions through Medicare no longer stand between patients and life-changing innovations,” Scott Whitaker, president and CEO of device industry lobby AdvaMed, said in a statement when the Senate bill was reintroduced in May. “Patients shouldn’t have to wait years to benefit from medtech the FDA has already determined to be safe and effective for patients.”

But arguments against automatic payment for breakthrough devices hinge on the sometimes limited evidence behind those products, both before and after they’re authorized by the FDA.

The FDA can grant breakthrough designations before any clinical data on a device is collected, meaning a “breakthrough” label could be based on a literature review or non-animal data. What qualifies a device as a breakthrough is rarely transparent, but since 2022, STAT’s Breakthrough Device Tracker has monitored hundreds of products with new breakthrough designations. Over the last six months it has grown by nearly two dozen devices, including artificial intelligence tools to flag multiple conditions in a single CT image, a robotic device for bladder surgery, and a gene expression test to predict the risk of melanoma metastasis.

If a device in development gets breakthrough status, it then gets a fast track through the regulatory process. And importantly, the FDA can accept more uncertainty in its benefits and risks than a product authorized through the standard pathway.

A recent analysis found significant gaps in the evidence behind therapeutic breakthrough devices, including eight that were authorized by the FDA without any clinical testing. Of devices that were subjected to clinical trials, 11 were authorized despite not meeting a primary endpoint in their pivotal study. The majority of therapeutic breakthrough devices have not been required to conduct post-market studies, including four of those devices that failed to meet a primary endpoint.

Those evidence gaps have less of an impact on patients if the devices are too expensive for doctors to use. But CMS offers supplemental payments to incentivize the adoption of promising new products before their costs become attractive to health systems — and breakthrough devices get a sweetened deal. Since 2020, CMS has waived one of the criteria to qualify for new technology add-on payments, or NTAPs, the one that requires evidence of “substantial clinical improvement” over existing alternatives, for breakthroughs.

“CMS is saying, well, if the FDA said it was a breakthrough, then it must meet that criterion, so good enough,” said Rathi. “And we know that that’s not necessarily true from looking at things on the evidence side.”

Medicare’s flexibility has driven up the number of devices eligible for these extra payments. Between 2012 and 2020, CMS approved an average of four technologies for NTAPs a year. Between 2021 and 2024, that grew to an average of 15 — more than a third of which were breakthrough devices. “Now, most of the devices that qualify for supplemental payment are breakthrough devices,” said Rathi, “and I don’t think there’s any end in sight.”

There’s also evidence that some breakthrough device manufacturers could be gaming this system to qualify for supplemental reimbursement. In a study published in November, Rathi and his health policy colleagues compared the prices manufacturers cited to CMS and what hospitals actually paid for those devices. The majority of those devices cited higher costs to CMS than hospitals paid, some more than two times higher, suggesting that some manufacturers may overstate prices to trigger Medicare reimbursement.

Rathi and his co-authors argue in a new perspective in the New England Journal of Medicine that CMS should retain the ability to do its own homework on a device’s clinical value.

With breakthrough devices already accounting for a majority of new technology add-on payments from Medicare, the bill could substantially increase Medicare outlays. The Congressional Budget Office estimated that under current law, CMS would spend $1.4 billion for such add-on payments between 2028 and 2035, and that direct spending would increase by $906 million between 2026 and 2035 if the bills before Congress were enacted. However, the budget office also cited considerable uncertainty in those projections, depending on how many breakthroughs are authorized by the FDA.

“I wonder if there’s going to be a year where it’s going to be a huge jump up,” said Rathi. “Then, people are all going to realize this loosening of the rules and gaming of prices actually will have huge financial implications.”

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