Medicare’s RAPID Coverage Pathway Moves the Work Earlier

FDA clearance is the moment most device founders treat as the finish line. It is not even the starting line for the thing that actually pays the bills, which is whether Medicare will cover the device and pay a hospital enough to want to buy it. A new pathway from CMS and the FDA just moved the timeline on that question, and the change is both better and more demanding than the headlines suggest. The headline says two months instead of a year. The fine print says the real work happens before you ever enroll your first patient.

What RAPID Actually Changes

On April 23 CMS and the FDA jointly announced the RAPID Coverage Pathway, a way to compress the gap between FDA authorization and Medicare coverage. Today a device can clear the FDA and then wait a year or more for a national coverage decision, selling into a void while it waits. Under RAPID, per MedTech Dive, CMS issues a proposed national coverage determination the same day the FDA authorizes the device, opens a thirty-day comment window, and can have national coverage in place as soon as two months after market authorization.

It is not open to everyone. The pathway is for breakthrough-designated devices that address an unmet need for Medicare patients. Class III devices qualify; Class II devices have to be in the FDA’s Total Product Life Cycle Advisory Program first. CMS says roughly forty devices qualify right now, with about twenty more potentially eligible, and the older Transitional Coverage for Emerging Technologies route pauses for new candidates. FDA Commissioner Marty Makary framed it as cutting red tape; CMS Administrator Mehmet Oz framed it as the two agencies getting in the room together earlier. That second framing is the one founders should sit with.

The Evidence Work Moves Years Earlier

Here is what “earlier” means in practice. To earn same-day coverage, a device has to have run an investigational study that enrolled Medicare beneficiaries and measured the clinical outcomes both the FDA and CMS agreed on up front, according to a Latham & Watkins analysis of the program. One trial, designed before a single patient is enrolled, now has to satisfy two agencies that have historically asked for different things. The FDA wants to know the device is safe and does what you say. CMS wants to know it improves outcomes for a seventy-year-old in a way worth paying for. RAPID asks you to answer both in the same protocol.

This is a product decision, not a reimbursement-consultant decision, and it lands squarely on whoever owns the framing of the product. When I was at Galen, the call that mattered was how we defined the device: we framed it as a tool that improves a surgeon’s access to anatomy, not as a remote manipulator competing with the incumbent, and that framing was what made the regulatory pathway work. RAPID adds a second axis to that same decision. It is no longer only “what is this device such that the FDA accepts it.” It is also “what outcome, measured how, will make a CMS actuary cover it.” Both answers now have to be designed into the study at the IDE stage, which is years before launch. Bolt coverage strategy on after clearance and you have already missed the window RAPID opened.

Covered Is Not the Same as Paid

There is a second catch, and it has a live deadline. Alongside RAPID, CMS has proposed repealing the New Technology Add-on Payment alternative pathway in its FY2027 inpatient payment rule, with the comment period closing June 9. That add-on payment is the extra Medicare reimbursement that helped hospitals afford brand-new devices in the years before standard rates catch up. Strip it out, and Latham & Watkins flags the obvious risk: a device can be covered on paper yet pay a hospital so little that no one adopts it. Faster coverage with thinner payment is not automatically a win.

For a founder, the lesson is to model the payment, not just the coverage. A national coverage determination is permission to be reimbursed. The payment rate is whether the hospital makes or loses money every time it uses your device, and that number decides adoption. If your plan stops at “we will be covered,” you have planned for half of the problem.

Dave Saunders is the founder of Base Reality Group and a Fractional CPO for hard-tech founders. He was a founder and operator at Galen Robotics, where the surgical-robotics platform earned FDA De Novo authorization in 2023, and he managed a 35-patent portfolio licensed from Johns Hopkins. He wrote Founders Who Finish and publishes The Build. More about Dave →