The Gap Between FDA Authorization and Medicare Coverage
In April 2026, the Centers for Medicare & Medicaid Services (“CMS”) and the U.S. Food and Drug Administration (“FDA”) announced a proposed initiative, the Regulatory Alignment for Predictable and Immediate Device (“RAPID”) pathway, intended to expedite Medicare coverage of certain Class II and Class III devices that have received Breakthrough Device designation and are pursuing FDA market authorization while engaging with CMS. Under RAPID, CMS aims to issue a proposed National Coverage Determination (“NCD”) at or around the time of FDA market authorization for eligible devices. While RAPID is intended to accelerate Medicare coverage review, the pathway does not provide automatic Medicare coverage upon FDA authorization. Rather, it initiates the NCD process at the time of authorization, potentially allowing national coverage and payment to become effective approximately 60 to 90 days later.
RAPID is intended to close the gap in time between FDA’s authorization of new medical technology and Medicare coverage, which can, in some cases, extend for several years. This delay may affect both patient access to innovative technologies and manufacturers’ ability to secure reimbursement certainty following FDA authorization.
One of the principal drivers for this gap is the difference between FDA’s authorization standard, which requires that the new technology demonstrate that it is “safe and effective,” and CMS’s standard for Medicare coverage, which requires the technology to be “reasonable and necessary” for the Medicare population. These standards frequently require evaluation of overlapping but distinct questions. While the FDA focuses on whether a device is safe and effective for its intended use, CMS evaluates whether the item or service is reasonable and necessary for Medicare beneficiaries, who may differ from populations enrolled in pivotal clinical studies. Historically, CMS review has followed FDA authorization, often resulting in a prolonged and resource-intensive process to obtain both regulatory approval and coverage, particularly where differences in evidentiary requirements between FDA and CMS require manufacturers to generate additional data after FDA authorization.
FDA’s Breakthrough Devices Program
Section 515B of the Federal Food, Drug, and Cosmetic Act, codified at 21 U.S.C. § 360e-3, as added by the 21st Century Cures Act and later amended, established FDA’s Breakthrough Devices Program “to help patients have more timely access to medical devices by expediting their development, assessment and review, while preserving the statutory standards for premarket approval, 510(k) clearance, and De Novo classification, consistent with the Agency’s mission to protect and promote public health.”
Manufacturers may request Breakthrough Device designation through a submission to FDA demonstrating that the device has the potential to provide more effective treatment or diagnosis of a life-threatening or irreversibly debilitating human disease or condition, and that it meets at least one of the following criteria: 1) represents breakthrough technology; 2) no approved or cleared alternatives exist; 3) offers significant advantages over existing approved or cleared alternatives; or 4) device availability is in the best interest of patients.
FDA must determine whether to grant Breakthrough Device designation within 60 calendar days after receiving a request. FDA classifies medical devices into three categories based on the level of regulatory control necessary to provide a reasonable assurance of safety and effectiveness. Class I devices are generally lower-risk devices subject to general controls, such as bandages, examination gloves and certain simple surgical instruments. Class II devices present a moderate risk and are subject to both general and special controls, such as performance standards, special labeling requirements or post-market surveillance; examples include infusion pumps, X-ray machines, powered wheelchairs and blood glucose meters. Class III devices are the highest-risk devices and generally require premarket approval because general and special controls are insufficient to assure safety and effectiveness. These devices often support or sustain human life, are of substantial importance in preventing impairment of human health or present a potential unreasonable risk of illness or injury, such as heart valves, pacemakers, deep brain stimulators and automated external defibrillators. As of late 2025, FDA had granted more than 1,200 Breakthrough Device designations and authorized more than 160 such devices.
The RAPID program applies only to eligible Class II and Class III devices. Under the RAPID pathway, FDA and CMS intend to coordinate early on clinical study design, including the use of Investigational Device Exemption studies that enroll Medicare beneficiaries and generate clinical outcome data relevant to both FDA premarket authorization and CMS coverage determinations.
Medicare Coverage Requires Assignment of Payment Codes and National or Local Coverage Determinations
Generally, for Medicare to pay for services involving a medical device, providers must report services using applicable CPT or Healthcare Common Procedure Coding System codes for outpatient services and appropriate payment categories, such as Ambulatory Payment Classifications (“APCs”), including new technology APCs for services that cannot be accurately described using existing codes. For inpatient services, procedures are reported using ICD-10-PCS codes. While the assignment and use of these codes enable providers to bill for services involving a device, coding alone does not determine Medicare coverage or payment. Medicare payment is available only if the item or service is determined to be “reasonable and necessary” for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member under Section 1862(a)(1)(A) of the Social Security Act, 42 U.S.C. § 1395y(a)(1)(A).
To determine whether a particular device or procedure will be paid for by Medicare, CMS issues nationwide guidance in the form of an NCD, while Medicare Administrative Contractors may issue guidance for regional coverage known as a Local Coverage Determination to assist providers in submitting claims for payment. CMS does not issue NCDs for all devices or procedures; as such, Medicare contractors may write local policies that can result in differences in coverage for Medicare beneficiaries across the country.
Past Efforts to Reduce Medicare Coverage and Payment Issues
The development of the new RAPID pathway offers the possibility of improvements in the FDA authorization and CMS coverage processes. At the same time, there is reason to be cautious in assessing whether the RAPID pathway will achieve results beyond prior initiatives by CMS and FDA to address these problems. For example, in 2016 CMS and FDA created two programs; one entitled Parallel Review, which allowed CMS and FDA to review clinical data of Class III devices simultaneously, and another entitled the Early Payor Feedback Program, which encouraged manufacturers to work with coverage organizations, such as insurance companies and health technology assessment groups, to obtain payor input on clinical trial design and other clinical evidence that could help support both coverage decisions and FDA’s determination that a device is safe and effective. These efforts have not made significant progress in resolving the coordination issue, as Class III devices represented only a small portion of FDA‑regulated devices (approximately 10% of device types), and these programs did not demonstrate appreciable change in the median approval time for novel technologies.
CMS tried again in 2021, establishing the Medicare Coverage of Innovative Technology program, under which CMS promised four years of national coverage immediately upon FDA market authorization. This program was rescinded within the same year due to CMS’s concerns regarding insufficient evidence to support “reasonable and necessary” determinations for the Medicare population. Finally, in 2024, CMS established the Transitional Coverage for Emerging Technologies (“TCET”) pathway. Although TCET was intended to facilitate more timely coverage determinations, the pathway has selected only a limited number of devices for participation and has not consistently achieved its goal of finalizing NCDs within six months of FDA authorization.
The RAPID pathway is intended to reduce the timeline from FDA authorization to CMS national coverage from 9-12 months to 60-90 days. Its program design limits RAPID participation to certain Class II devices participating in the FDA Total Product Life Cycle Advisory Program (“TAP”) and Class III devices, regardless of TAP participation, which, as with prior pathways, may limit the number of devices eligible for expedited coverage. In addition, it remains unclear whether existing resource constraints at FDA and CMS may affect the agencies’ ability to implement the program at scale and achieve its intended timelines.
CMS has not yet finalized the RAPID pathway through formal rulemaking, and further guidance regarding implementation and public comment opportunities is anticipated.
Practical Takeaways
- RAPID is intended to allow CMS to begin the NCD process at the time of FDA authorization for eligible Breakthrough Devices, potentially reducing the time between authorization and Medicare coverage.
- The pathway reflects increased coordination between FDA and CMS regarding clinical evidence development and review.
- RAPID does not eliminate CMS’s independent obligation to determine whether a device is reasonable and necessary for the Medicare population.
- Whether RAPID succeeds where prior initiatives have struggled will depend on implementation, resource allocation and the agencies’ ability to maintain meaningful alignment throughout the review process.
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- Sue Andersen at (301) 785-3996 or sandersen@hallrender.com;
- Carolina Wirth at (202) 780-2989 or cwirth@hallrender.com; or
- Your primary Hall Render contact.
Hall Render blog posts and articles are intended for informational purposes only. For ethical reasons, Hall Render attorneys cannot—outside of an attorney-client relationship—answer specific questions that would be legal advice.
