By Victor Pikov, contributing editor
October 28, 2026 | The journey to securing reimbursement for a new medical device involves three critical steps: obtaining a CMS code, securing Medicare coverage (via national and local coverage determinations, and Medicare administrative contractors), and establishing payment levels. During the first step, securing a permanent CMS and HCPCS reimbursement code is a multi-year endeavor. To provide reimbursement during these early years, CMS issues temporary “C-codes” for some medical devices soon after FDA Premarket Approval. Valid for two to three years, these C-codes enable devices to receive transitional pass-through payments at both hospitals and ambulatory surgical centers.
One early hurdle with these payments is overcoming the bundling penalty. In hospital settings—though not at ASCs—payments for the lead, IPG, and implantation procedure are bundled into a fixed Ambulatory Payment Classification 5464. This APC covers implantation procedures for spinal cord, peripheral nerve, sacral nerve, vagus nerve, phrenic nerve, and gastric electrical stimulators at a standard flat payment rate.
Large hospitals are typically the first to adopt new neuromodulation devices. Because these innovative devices often feature advanced functionalities that increase their cost, they can easily consume most of the bundled APC 5464 payment, creating a financial disincentive for hospital adoption. To eliminate this bundling penalty, C-code payments are provided in addition to the APC 5464 payment. This financial bridge allows clinicians to offer cutting-edge therapies to Medicare beneficiaries immediately upon FDA approval without waiting years for Medicare to recalibrate the APC rate. Furthermore, separate reporting of C-codes allows CMS to track real-world utilization, generating actual cost data for future APC recalibrations.
The impact of C-codes on accelerated adoption of bioelectronic medicine devices is evident across several recent product launches.
2018-2021: C1823 was issued for ZOLL Medical’s (formerly Respicardia) remedē Transvenous Phrenic Nerve Stimulation device for central sleep apnea. During this window, ZOLL quadrupled its annual commercial implants in the U.S., growing from roughly 40 in 2018 to 160 in 2021.
2020-2023: Two C-codes were issued for distinct heart failure treatments. C1824 was granted to Impulse Dynamics’ Optimizer, which boosts cardiac muscle contractility, and C1825 was assigned to CVRx’s Barostim System, which suppresses sympathetic overactivity for patients with reduced ejection fraction. Impulse Dynamics nearly tripled its U.S. implants (from ~350 to ~900), while CVRx quadrupled its volume (from ~290 to ~1,100).
2023-2025: C1827 was assigned to the Vivistim VNS device from Mobia Medical (formerly MicroTransponder) for rehabilitation of arm function after chronic ischemic stroke. During that time, Mobia tripled the number of annual commercial implants in the US (from ~220 in 2023 to ~700 in 2025).
2026-2028: Most recently, C1607 was issued for SetPoint Medical’s VNS device to treat rheumatoid arthritis.
Presently, CMS issues C-codes and associated Transitional Pass-Through (TPT) payments only to devices that hold both FDA PMA approval and an FDA Breakthrough Device designation. However, the reimbursement landscape will shift away from TPT for devices receiving PMA approval on or after May 1, 2028. According to the CMS IPPS Final Rule published on August 4, 2026, the expedited TPT pathway will be completely retired, giving companies a brief window until September 2029 to submit their final TPT applications. Once the pathway closes, companies will be required to perform initial implants without reimbursement to generate real-world data proving “substantial clinical improvement” over existing therapies or effectiveness in drug-refractory patients.
As the TPT coding pathway phases out, a new regulatory mechanism is taking its place. On August 7, 2026, CMS and the FDA jointly announced the novel RAPID Coverage Pathway, set to roll out in 2027 to provide immediate Medicare coverage without the need for C-codes. Participation in RAPID requires meeting three strict conditions. First, startups must engage with both the FDA and CMS during the IDE Pre-Submission phase for their pivotal trial, while engagement that begins during an ongoing trial or after PMA approval does not qualify. Second, the device must hold an FDA Breakthrough Device designation. Third, for 510(k) and 510(k) de novo submissions, startups must also participate in the FDA’s Total Product Life Cycle Advisory Program.
The historical availability of the TPT pathway has proven clearly beneficial to the bioelectronic medicine sector, as all five devices with C-codes successfully tripled or quadrupled their commercial implants during their respective transitional coverage periods. Presently, the bioelectronic medicine industry moves away from the C-code system that rewarded companies temporarily after PMA approval toward the RAPID pathway with its long-term benefits contingent on close continuous collaboration with both the FDA and CMS starting as early as the pivotal IDE Pre-Submission stage. Within the next year, initial data from early RAPID participants should reveal the true impacts of the new pathway on patient recruitment rates during the pivotal trial and on their ability to attract vital venture capital funding.
