FDA Approved – But Will CMS Authorize Payment for the Patented Medical Invention?

Medical Patents Broker Inc.
By Kenneth Pearce, President

First and foremost, I have no personal skin in the game with the Centers for Medicare & Medicaid Services (CMS) and no direct contacts or access to "behind the scenes" experts.

My information comes from third party sources and relates to the microcosm of what Medicare and Medicaid will pay for. As you know, if CMS does not authorize payment for the medical invention, usually private insurance does not pay either. The few truly self-insured cannot offset the expenses of procuring FDA permission to market the medical invention.

We the people cause this untethered debacle to the detriment of the patient. The USPTO and the FDA grant the monopoly and approve use of new medical inventions, while CMS tells us, if the medical invention is not for a customary use, CMS may not profitably compensate the manufacturer for its effort. This is a conundrum for biotech, device and pharmaceutical companies.

If the medical invention doesn't fit into one of CMS’s currently established categories, Medicare and Medicaid cannot pay for it. That’s right, even if it’s complete cure for dementia or osteoporosis! 

Here are some of the CMS categories:

Medicare Parts A & B

1. Inpatient Hospital Services (Part A): If your invention is used while a patient is admitted to a hospital or skilled nursing facility, it is generally covered under the Part A bundled payment. However, the hospital usually gets a flat fee for the Part A stay. If the new invention is too expensive, the hospital's CFO will block it and use to save the hospital’s margin.
2. Physicians’ Services (Part B): This covers “professional services” by doctors or other state licensed personnel. Office visits, nursing homes, injections or outpatient surgeries are some examples.
   • Current Procedural Terminology (CPT). The invention must have CMS CPT Code so the service profession can bill for the work of using the medical inventions.
3. Durable Medical Equipment (DME) (Part B): Wheelchairs, CPAP machines, diabetes monitors, etc.
   • The 2026 Rule: To qualify as DME, the equipment must be able to withstand repeated use for at least three years. Thus, a disposable does not fit the criterion and there is no reimbursement.
4. Prosthetics, Orthotics, and Supplies: Artificial legs, arms, and eyes are covered.
5. Prescription Drugs (Part D & Part B): 
   • Part B Drugs: Usually drugs injected or infused in a doctor’s office (like chemotherapy).
   • Part D Drugs: Self-administered "pharmacy" drugs. In 2026, patients have a new $2,100 out-of-pocket cap.

Medicaid

As the reader knows, Medicaid is a joint program between the federal and State’s governments. Based on my limited understanding, it appears that depending on the State, what Medicaid pays can be less or more than Medicare.

The 2026 "New Technology" Fast-Track

If your invention is a "Breakthrough," you might qualify for the NTAP (New Technology Add-on Payment). This allows a hospital to get paid extra on top of their flat fee for a few years while your tech is new. But beware: the deadline for 2027 applications is already closing in!

The President’s Viewpoint

Based on my current understanding of Medicare and CMS, there appear to be some other specialized narrower roads that a manufacturer/supplier of a newer and different medical invention can utilize to push the new medical invention through CMS and to the patient.

And some of those nudges look like they need to start more than a year before day one in commerce. It seems like such avenues are far beyond my generalized understanding, and I defer to those who specialize in such things.