Introduction to Temporary Payments for New Devices

One of the first questions every MedTech company faces after FDA clearance is: how will we get paid? Regulatory approval opens the door to the U.S. market, but it does not automatically mean hospitals or doctors will be reimbursed for using your product. Payment comes through a completely separate process, and for new technologies, that path can take time to develop.

To help bridge this gap, Medicare has created special “temporary payment” programs that allow new technologies to receive additional reimbursement while permanent payment systems catch up. These programs are important to understand because they can influence how quickly hospitals are willing to adopt your product. They are Medicare-specific, but commercial insurers sometimes watch how Medicare responds and may adjust their own policies accordingly.

What Are Temporary Payments?

Temporary payments are short-term reimbursement mechanisms designed to support innovative devices or procedures in the early years after FDA clearance. They give hospitals extra payment on top of the standard Medicare rate for a service, which helps offset the cost of trying something new.

There are three main Medicare programs:

• New Technology Add-On Payment (NTAP): For inpatient hospital procedures.
  

• Transitional Pass-Through Payment (TPT): For outpatient hospitals and ambulatory surgery centers (ASCs).
  

• New Technology Ambulatory Payment Classification (NT-APC): For new outpatient services that don’t yet fit into an existing payment category.

Each of these programs is intended to give hospitals confidence to adopt new devices while Medicare gathers the data it needs to set permanent payment rates.

Who Qualifies?

Not every device qualifies for these programs. Medicare looks for technologies that are truly new, within about 2–3 years of FDA clearance. They also want to see that the product makes a meaningful improvement for patients—whether by reducing complications, shortening hospital stays, or improving outcomes compared to older options. Finally, the product must not be adequately paid for under the current system.

For NT-APC specifically, the technology has to be so new that it doesn’t yet fit into an existing outpatient category. In that case, Medicare creates a temporary “home” for the service until enough claims data are available to place it permanently.

Why Temporary Payments Matter

For early-stage MedTech companies, temporary payment programs can provide important benefits:

• Encouraging hospital adoption. Hospitals may be hesitant to try a costly new device without a clear way to get reimbursed. Extra payment helps ease that risk.
  

• Jump-starting revenue. These programs create an early revenue stream while permanent codes and payment rates are still in development.
  

• Signaling credibility. Approval from Medicare can send a strong message to investors, acquirers, and private payers that your technology has value.
  

• Clarifying the path forward. Working with Medicare helps you understand what codes, documentation, and billing will be needed for long-term success.
  

Important Considerations

While these programs can be helpful, they are not a silver bullet. There are a few realities to keep in mind:

• They are temporary. Most programs last only 2–3 years. You will need a long-term plan for permanent coding and payment.
  

• Evidence still matters. FDA clearance is not enough on its own—Medicare expects to see solid clinical evidence of improvement.
  

• Coding can be complex. You may need a unique CPT or HCPCS code before you can even apply.
  

• Hospitals must do their part. Hospitals have to apply for these payments and track them. If the process feels complicated, adoption can slow down.
  

Is This the Right Path for You?

Not every device needs to pursue temporary payment. The best candidates are often high-cost technologies where hospitals would otherwise be financially exposed, or those with strong evidence of clinical benefit but no clear fit in existing payment systems.

If your device is lower cost, fits neatly into an existing category, or does not yet have robust clinical evidence, a temporary program may not be the right move. In those cases, other strategies—such as working with hospitals on case-by-case payer support or focusing on alternative payment routes—may be more effective.

Closing Thought

Temporary payment programs like NTAP, TPT, and NT-APC can provide a valuable lifeline for new MedTech technologies. They do not guarantee long-term success, but they can accelerate adoption, validate your value story, and give you breathing room while you work toward permanent reimbursement.

These programs are specific to Medicare, but private insurers often take note of how Medicare responds to innovation, which makes them doubly important to watch. The key is to use them as stepping stones—helpful in the short term, but always with an eye toward the broader, permanent coding and payment strategy that will sustain your business over time.

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