CMS Pub. 100-04, ch. 4, § 60.3

The definition of and criteria for devices eligible for establishment of new categories for

transitional pass-through payments was discussed and defined in a final rule with

comment period published in the “Federal Register” on November 1, 2002, (67 FR

66781). Two of the criteria were also modified by means of a final rule with comment

period published in the “Federal Register” on November 10, 2005 (70 FR 68628). As of

January 1, 2010, implantable biologicals that are surgically inserted or implanted

(through a surgical incision or natural orifice) are being evaluated for device pass-through

payment as modified by means of a final rule with comment period and published in the

November 20, 2009 “Federal Register” (74 FR 60471). As of January 1, 2015, skin

substitutes are being evaluated for device pass-through payment as modified by means of

a final rule with comment period and published in the November 10, 2015 “Federal

Register” (79 FR 66885). As of January 1, 2016, the application process for device pass-through payments will add a rulemaking component to the existing quarterly process and

a requirement will ensure that medical devices seeking pass-through payments are “new,”

as modified by means of a final rule with comment period and published in the

November 13, 2015 “Federal Register (80 FR 70417). As of January 1, 2017, the pass-through payment time period has been refined by having the pass-through start date begin

with the date of first payment and by allowing pass-through status to expire quarterly as

modified by means of a final rule with comment period and published in the November

14, 2016 “Federal Register (81 FR 79655 ). Also, in calculating the pass-through

payment, the “Implantable Devices Charged to Patients Cost to Charge Ration (CCR)”

will replace the hospital-specific CCR, when available and device offsets will be

calculated from the HCPCS payment rate, instead of the APC payment rate (81 FR 79655

through 79656). As of January 1, 2020, devices that have received FDA marketing

authorization and a Breakthrough Device designation from the FDA have an alternative

pathway to qualify for device pass-through payment status, under which devices would

not be evaluated in terms of the current substantial clinical improvement criterion for the

purposes of determining device pass-through payment status. The devices must still meet

the other criteria for pass-through status.

The regulations regarding transitional pass-through payment for devices are compiled at

42 CFR 419.66. Additionally, the eligibility criteria for CMS to establish a new category

for pass-through payment are discussed on the CMS Web site at

https://www.cms.gov/Medicare/Medicare-Fee-for-Service-

Payment/HospitalOutpatientPPS/passthrough_payment.html