The Centers for Medicare & Medicaid Services (CMS) has approved supplemental reimbursement for two drug-coated balloons to treat Medicare patients with peripheral artery disease, but the payment applies only to outpatient settings.

The payment is scheduled to take effect April 1 and will remain in effect for two to three years.

The FDA recently approved two paclitaxel-coated balloons, C.R. Bard’s Lutonix and Medtronic’s IN.PACT Admiral devices, for use in the superficial femoral artery and the popliteal artery. Both approvals were based on clinical trials that compared the drug-coated balloons with standard angioplasty, with both of the drug-coated balloons faring well on efficacy and showing favorable safety profiles. These are the only two drug-coated balloons approved in the U.S. for this indication.

The decision by CMS will allow hospitals to seek supplemental reimbursement for the drug-coated balloons under the Medicare hospital outpatient prospective payment system. CMS instructed hospitals to use the Healthcare Common Procedure code C2623.    

The transitional pass-through payment system is designed to cover the additional cost of new devices, which typically have enhanced features and consequently cost more than standard therapies.

Medtronic reported that CMS is also reviewing a supplemental payment for inpatient procedures. It estimated that a decision would be made this summer.