Beware Basing Your MedTech Pricing on Short-term New Tech Payment Mechanisms

Early-stage medtech founders hear it over and over: “Price your product based on its value.”

But what does that actually mean in the US healthcare system? The truth is, “value” isn’t a single, fixed concept—it’s different for every stakeholder. Hospitals, physicians, and payers each define value in ways that often conflict. And if your pricing strategy isn’t aligned with how these stakeholders define and experience value, your path to market access will be rough.

The Fatal Pricing Mistake: Using Reimbursement to Justify a Number

One of the most common pricing missteps I see among medtech startups is setting a price based on reimbursement codes—especially new technology add-on payments. Some founders assume that just because a code exists, payers will cover it at a rate that justifies their price.

But US payers don’t operate that way. New technology payments are temporary and often serve more as barriers than enablers. If your pricing model leans too heavily on reimbursement expectations rather than market realities, you risk alienating both providers and payers.

NTAP (New Technology Add-on Payment) and TPT (Transitional Pass-Through) payment pathways might seem like attractive benchmarks for setting a device’s price, but they are short-term incentives, not long-term pricing strategies. These programs exist to temporarily offset costs for hospitals and providers adopting new technology, not to establish sustainable reimbursement levels. NTAP payments expire after two to three years, and TPT lasts only three years, meaning hospitals will ultimately have to absorb the full cost or secure standard reimbursement.

Additionally, CMS sets NTAP and TPT payment rates based on cost recovery, not market value, so using these payments as a pricing benchmark can result in unsustainable expectations when the transitional funding disappears. Companies relying on these pathways for price justification often face pushback from payers and hospital reluctance once the extra payments vanish, leading to stalled adoption. Instead, pricing should be based on long-term reimbursement mechanisms and real-world economic value to stakeholders.

Who Pays and Who Saves?

Another major disconnect comes from assuming that savings in one part of the system will drive adoption. If your tech reduces operating room time, but the hospital isn’t seeing a direct financial benefit, why would they pay more for it? If it lowers complications over a decade, but insurers only care about costs over two years, why would they push for its use?

This is why understanding who is actually paying and who is actually saving is critical. And more often than not, the two are not the same.

A Smarter Approach: Stakeholder-Specific Pricing Models

Instead of defaulting to a “value-based” price, founders should consider:

Hospital Pricing Sensitivity: Will hospitals lose revenue by adopting your tech? Will it cut into DRG-based payments?

Physician Economics: Does your tech add time or complexity to a physician’s workflow? Will they need a different CPT code that reduces their reimbursement?

Payer Thresholds: Do payers see enough short-term cost offsets to justify coverage? What existing policies might limit payment?

The most effective pricing models take these competing incentives into account—rather than trying to force a one-size-fits-all “value-based” price.