All terms
Transitional Pass-Through Payment
Supplemental outpatient payment for new device technologies.
Reviewed by Christian Espinosa, Founder, Blue Goat CyberLast reviewed May 5, 2026
Definition
TPT provides supplemental Medicare outpatient (OPPS) payment for new devices for 2–3 years while CMS gathers utilization data to incorporate device costs into APC payment rates. What the regulation says
The Centers for Medicare & Medicaid Services (CMS) outlines the Transitional Pass-Through Payment (TPT) mechanism in its regulations to support the adoption of new medical devices in the outpatient setting. TPT provides additional reimbursement for new devices for a limited period, typically two to three years, allowing CMS to collect data on their utilization and cost. This data is subsequently used to establish appropriate payment rates within the Ambulatory Payment Classification (APC) system, as described in relevant sections of the Social Security Act and its implementing regulations.
What this means in practice
Outpatient analog of NTAP. Highly important for ASC- and HOPD-administered procedures (structural heart, EP, ophthalmology).Examples
- A novel implantable cardiac monitor receives TPT status, allowing hospitals to be reimbursed for the device's cost in addition to the procedure for two years.
- A new surgical ablation catheter is granted TPT, facilitating its adoption in outpatient procedures while CMS collects data on its usage and associated costs.
- A company developing an innovative drug delivery system for outpatient administration seeks TPT to ensure adequate reimbursement during its initial market phase.
Common pitfalls
- •A common pitfall is misunderstanding the limited duration of TPT status, which is not a permanent reimbursement mechanism.
- •Another mistake is failing to collect robust real-world evidence during the TPT period, which can hinder future APC rate setting.
- •Companies sometimes misjudge the data submission requirements for continued TPT eligibility and eventual APC integration.
- •Not all new devices are eligible for TPT, leading to misaligned expectations regarding reimbursement pathways.
- •Failing to engage with CMS early can result in delays or missed opportunities for TPT consideration.
Frequently asked questions
The primary purpose of TPT is to provide temporary, supplemental Medicare payment for new medical devices in the outpatient setting. This allows for market adoption and data collection before the device's costs are fully integrated into standard payment classifications.
Cross-references
Often confused with
Distinct concept frequently mistaken for this one.
Related terms
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· Hand-selected related conceptsReimbursement
ASC Site-of-Service Shift
Migration of procedures from hospitals to ambulatory surgery centers.
Reimbursement
New Technology Add-On Payment(NTAP)
Supplemental Medicare payment for inpatient use of qualifying new technologies.
Reimbursement
Outpatient Prospective Payment System(OPPS)
Medicare's payment system for hospital outpatient services.
More in Reimbursement
· Same categoryReimbursement
340B Drug Pricing Program(340B)
Federal program providing discounted drugs to safety-net providers.
Reimbursement
Ambulatory Payment Classification(APC)
The Medicare grouping system that determines hospital outpatient payment amounts under OPPS, analogous to MS-DRGs for inpatient.
Reimbursement
Budget Impact Model(BIM)
Financial model that estimates the total cost consequences of adopting a new technology to a payer's budget over a defined horizon.
Reimbursement
Bundled Payment
Single payment that covers all services for an episode of care.
Primary references
2 sourcesLink health: 2 verified· last checked 2026-06-20
AMA·1AdvaMed·1
- 1
AMA CPT ResourcesVerifiedAMAama-assn.org
- 2
AdvaMed - Payment & CoverageVerifiedAdvaMedadvamed.org
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