TPT payment reimbursement information

Transitional Pass-Through (TPT) Payment is a temporary additional payment established by CMS for new, innovative medical devices that demonstrate substantial clinical improvement over existing technologies. The intent of TPT is to facilitate access for Medicare beneficiaries to new innovative medical devices by allowing for adequate payment of these devices when used in an appropriate outpatient setting.

TPT is effective for two to three years to allow Medicare to collect the necessary cost data to incorporate the costs for these devices into the ambulatory payment classification (APC) rate for the procedure.

Medicare calculates the TPT payment based on the hospital’s charges reduced to cost. This calculation is made by applying the cost-to-charge ratio (CCR) for Revenue Code 0278 (Medical/Surgical Supplies and Devices-Other implants) to the hospital’s charge and then subtracting the device-related portion (device offset) of the relevant CPT code.¹