Who pays for a cleared device
A U.S. Food and Drug Administration (FDA) 510(k) clearance says a device may be sold for its indications. It says nothing about whether a hospital is paid when it uses the device, and in the United States that answer comes from separate decisions on separate timelines.
This page is general information, checked against the sources named in it on 29 October 2026. The company’s regulatory and reimbursement advisers decide for its device.
Clearance settles the indications; payment, awareness and value are the three questions that follow, set out under the next 5 to 7 references. This page covers payment.
Coding, coverage and payment run separately
In the United States, the Centers for Medicare and Medicaid Services (CMS) puts it plainly in its guide for medical technology companies: “Coding, coverage, and payment of technologies and services are distinct, but related aspects under Medicare.” The same page says their timelines and procedures “are not necessarily carried out in any particular order.”
- Coding. Whether a code describes the device or the procedure it is used in.
- Coverage. Whether the payer pays for it at all, and for which patients, through a national coverage determination or a Medicare Administrative Contractor’s local coverage determination.
- Payment. How much, to whom, and in which care setting. In the hospital, many devices are paid inside a Medicare diagnosis-related group (DRG) or ambulatory payment classification (APC), with a new technology add-on payment (NTAP) or transitional pass-through payment as the routes for some new devices.
For new procedures, the American Medical Association (AMA) keeps Category III Current Procedural Terminology (CPT) codes, which it describes as “a temporary set of codes for emerging technologies, services and procedures”, with a “triannual electronic release”.
In Canada, Health Canada licenses devices above Class I, and in Health Canada’s own words, “The provinces and territories are responsible for delivering health care services.” So the payment questions are asked again for each province the company plans to sell into.
Sources, checked 29 October 2026: CMS, Getting Started; AMA, Category III codes; Health Canada, Canada’s health care system.
RAPID: a proposed coverage pathway
On 11 August 2026, CMS published a proposed coverage pathway in the Federal Register, the Regulatory Alignment for Predictable and Immediate Device (RAPID) coverage pathway. For the devices it covers, if the device’s clinical study shows the agreed health outcomes improved for Medicare patients, a proposed national coverage determination would be posted on the day of FDA market authorization, and CMS’s goal is a final one about 60 days later for Class II devices and 90 days later for Class III devices.
The door is narrow. It takes an FDA Breakthrough Device designation, and a study under an investigational device exemption (IDE) that enrols Medicare beneficiaries and measures health outcomes FDA and CMS have agreed on. The device enters at the IDE pre-submission stage, before that study starts. As proposed, a device that already has FDA market authorization cannot use it: CMS points those devices to a national coverage determination outside RAPID, to local coverage, or to decisions claim by claim. For a device already cleared, RAPID is a route to plan for the next one. Comments closed on 13 October 2026. As of 29 October, the Federal Register shows no final version, so I check it again every quarter.
Source: Federal Register, volume 91, page 51710, 11 August 2026; FDA risk classes from Classify Your Medical Device.
Value analysis and the first sites
A value analysis committee recommends a device when the evidence shows who gains (the hospital, the physician, the payer or the patient) and in which care setting the budget impact adds up, and the budget holder then pays. The first 2 or 3 sites supply that evidence for the next ones.
The company’s reimbursement and regulatory specialists answer the payment questions for its device. I build the go-to-market plan around their answers: which sites to approach first, in which care setting, with which evidence, and in what order.
Clearance lets a device be sold; whether a site is paid for using it depends on coding, coverage and payment, which run on separate tracks and timelines.
Tell me your origin story
We book 1 to 2 hours. It is recorded, with a mutual non-disclosure agreement in place at booking, so you can talk openly about why you’re building this, the customers, pricing and pipeline decisions that are keeping you up at night. For a device company the agenda adds the four questions after clearance, and the playbook carries one page on what is known, what is unknown and who answers each.
From that session, you’ll get a written playbook, broken into steps your team can actually take.
It costs $25. Basically enough to cover the tokens to analyze our call and build out your report. I’m definitely not making money off this. But I am committed to showing up and using our time well. If the session isn’t worth your hour, I’ll double your refund: $50, as an apology for wasting your time.