Vivistim Payment Proposal Shows How Medicare Pays for New Outpatient Technology

CMS has proposed to keep the procedure code used for Mobia Medical's Vivistim stroke rehabilitation implant in New Technology APC 1580 for 2027, with a hospital outpatient payment of about $45,000, unchanged from 2026, the company said in a July 2, 2026 release distributed by GlobeNewswire and read via BioSpace. The proposal is part of CMS's calendar 2027 outpatient payment proposed rule, CMS-1850-P, released the same day.

The rule is mostly about rates for thousands of hospital services. But it also carries the two mechanisms Medicare uses to pay for new technology in hospital outpatient departments, and a proposal that would change who qualifies for one of them.

Two routes for new technology

Under the outpatient system, Medicare pays for most services through Ambulatory Payment Classification groups, or APCs, built from hospital claims. New products have no claims history. The proposed rule describes two ways CMS fills that gap.

The first is transitional pass-through payment, a temporary extra payment the law allows for at least 2 but not more than 3 years for certain drugs, biologicals, cancer brachytherapy devices and categories of other medical devices. The second is the New Technology APC, used for new services that are not eligible for pass-through and for which CMS lacks the clinical information and cost data to place them in a regular clinical APC. These groups are defined by cost bands, and the rule says assignment is "generally temporary": CMS keeps a service there until it has enough data to move it.

Vivistim's code sits in APC 1580, which the rule labels New Technology Level 43, covering costs of $40,001 to $50,000.

The pass-through numbers for 2027

According to the rule, CMS received 19 device pass-through applications by the March 2, 2026, deadline, and six were later withdrawn. Of the 13 remaining, 10 applied under the alternative pathway for devices with FDA breakthrough device designation and three under the traditional pathway. CMS proposes approving seven and denying six, with final decisions in the final rule. It estimates total pass-through spending in 2027 at about $195.3 million, including about $183.1 million for device categories, against a statutory limit of 2.0 percent of projected outpatient payments.

The proposed end of a shortcut for designated devices

Under the traditional pathway, a device must show it substantially improves diagnosis or treatment compared with existing options. Since 2020, devices with breakthrough device designation that have received FDA marketing authorization for the designated indication have not had to meet that substantial clinical improvement test, though they must meet the other requirements.

The rule repeats a proposal, first made in the fiscal 2027 inpatient payment proposed rule, to repeal that alternative pathway for both outpatient pass-through and inpatient new technology add-on payments. Under the proposal, applications received on or after Oct. 1, 2026, would have to demonstrate substantial clinical improvement. Applications submitted by Sept. 30, 2026, could still be approved under the alternative pathway, and existing device categories would keep their pass-through status for its normal 2-to-3-year term.

Comments on the proposed rule are due by Aug. 31, 2026, and Mobia said CMS is expected to publish the final rule in November, with changes taking effect Jan. 1, 2027.