CMS Payment Categories Explained: How PMA, 510(k), and 361 HCT/P Status Now Determines CTP Reimbursement

CMS is reshaping reimbursement for cellular and tissue-based products (CTPs) by tying payment directly to FDA regulatory pathways—PMA, 510(k), and 361 HCT/P. In this interview, Dr. Timothy Miller explains how CMS is using risk stratification and evidence tiers to determine coverage, audit exposure, and provider accountability. The result: product selection is no longer just a clinical decision—it’s a reimbursement-risk strategy. 

• Regulatory Status Now Predicts Payment. In this clinician’s observation, CMS is explicitly linking FDA oversight level to reimbursement confidence. Evidence strength and regulatory scrutiny now directly influence coverage stability. 

• CMS Is Implementing Evidence-Tiered, Risk-Based Reimbursement. This shift represents both risk stratification and evidence-tiered payment. Providers, not payers, are increasingly positioned as the risk buffer when documentation, indication, or product category misalign. 

• Product Selection Is Now a Reimbursement-Risk Decision. Clinicians must move beyond preference and familiarity when selecting CTPs. Utilization decisions should consider not only current payment but long-term audit defensibility, regulatory trajectory, and how CMS views the product’s category. Clinical judgment, regulation, and reimbursement consequences are now part of a single integrated system. 

With the new payment categories of PMA, 510(k) and 361 HCT/P, CMS is now transitioning to how much trust it places in the product. Furthermore, it is the proof through scientific testing that CMS expects after use of the product.  

Previously, cellular and tissue-based products were grouped together despite different levels of clinical evidence, manufacturing controls, and FDA oversight. With the new categories, it seems as though CMS is now stating that the FDA regulation is tied to how a user is reimbursed. 

Pre-market Approval (PMA) products¹ are the ones that are under the highest scrutiny but ones that CMS has the highest confidence in. These are true Class III medical devices that are backed by clinical trials and approved by the FDA. For reimbursement, there is stronger support for reimbursement with separate payments as CMS expects consistent and reproducible outcomes. Documentation, indications, and outcomes do matter, but in my estimation, payment is more defensible.  

510(k) products² are ones with moderate confidence and uses comparisons to products that are already on the market. These devices are legitimate but are cleared via equivalence to products that are on the market already. Since the evidence is comparative, there may not be a significant amount of it. There is a lower regulatory risk compared to PMA. The reimbursement is tied to existing payment establishments, and the coverage aligns with the other products’ use. With these products, CMS leans on precedent set forth by other products as opposed to proof of novelty.  

For 361 Human Cell and Tissue Products (HCT/Ps), CMS views these as human tissue and not medical products. The regulation for this is different than the other, as its main assessment is safety as opposed to effectiveness. These products require minimal manipulation. Usually there is no separate reimbursement available, and these products are susceptible to bundling into procedure payments. In my observation, these products are the highest risk for audits and denials, and CMS does not assume therapeutic intent or proven benefit.  

I feel that this regulatory status now predicts payment, as CMS is stratifying risk, evidence, and payment policy. For PMA products, CMS expects outcomes and consistency. 510(k) products are expected to align with known use, while 361 HCT/P are for homologous use. If a product’s regulatory category doesn’t support how it’s being used clinically, CMS will look at the provider, not just the manufacturer. 

CMS is ranking products by regulatory risk, strength of evidence, predictability of outcomes, and program integrity. Payment is then following that ranking. Thus, I feel this is a risk stratification as a mechanism to achieve evidence based payment.  

For PMA, CMS is willing to pay separately for the product so there is no bundling. Due to the nature of PMA, there is a tolerance for higher costs. PMA products reduce risk because there is cleaner audit logic, fewer disputes on coverage, and fewer unpredictable outcomes. CMS feels that the hard work has already been done by the FDA. However, this does not remove documentation burden from clinicians. 

For 510(k), CMS is using comparative logic. There is payment parity with similar outcomes along with reliance on existing coverage pathways. There is still risk, but it is already known as it is similar to previous products.  

The shift is most obvious with the 361 HCT/P. This is because CMS believes that if FDA didn’t require proof of effectiveness, then CMS can’t assume that it is effective. Thus, these products are higher to audits along with bundling into procedure payments.  

CMS reimbursement used to be based on site of service, cost inputs, and utilization patterns. The shift has changed to confidence in the product’s work, the risks if it doesn’t, and who bears that risk. In my observation, CMS believes that the risk is on the provider and not the payer. In turn, providers receive clarity with increased accountability. CMS is signaling that the providers are now the risk buffer. 

The biggest adjustment that providers need to make as products are sorted into these categories is that providers will have to stop treating product choice as a purely clinical preference and start treating it, at least in part, as a reimbursement-risk decision. 

Prior to these regulatory changes, I saw providers selecting products based on preferences, relationships, and familiarity. Now, CMS is forcing providers to think more deeply before use, especially in relation to the products regulatory category supporting documentation and billing.  

I feel that today’s utilization decisions have to be less about current reimbursement and more about how does CMS feel about the product, along with where those feelings may migrate. Instead of wondering will you get paid, thinking more of being able to defend your choice in the future in case of audits.  

CMS signals long-term legitimacy with PMA products. These products are used in high cost and highly scrutinized cases where meticulous documentation and attention to label indications and outcome tracking is a must. These products are likely to gain broader coverage and are the safest place to start. 510(k) products should be used where clinical equivalence is well understood and in settings where payment similarities is acceptable. These products tend to remain stable and are reliable tools. 361 HCT/Ps have payment variability, and I do not think CMS will build a favorable reimbursement policy with these. Many of these products face reimbursement decreases where the risk is higher.  

CMS has now forced practitioners to follow trajectory of products to figure out the future. Are your intended products looking at a PMA pathway or a 361 position? This may determine what you use. CMS is no longer separating clinical judgement, regulation, and reimbursement consequences. It is now one whole system. 

Dr. Miller is a board-certified podiatrist practicing in Orlando, FL. He currently holds leadership roles with the American College of Foot and Ankle Surgeons, the American Board of Foot and Ankle Surgery, the American Podiatric Medical Association, and the Florida Podiatric Medical Association.  

1. U.S. Food and Drug Administration. Premarket Approval (PMA). FDA. Updated October 3, 2022. Accessed February 17, 2026. https://www.fda.gov/medical-devices/premarket-submissions-selecting-and-preparing-correct-submission/premarket-approval-pma 

2. U.S. Food and Drug Administration. Premarket Notification (510(k)). FDA. Updated October 3, 2022. Accessed February 17, 2026. https://www.fda.gov/medical-devices/premarket-submissions-selecting-and-preparing-correct-submission/premarket-notification-510k