OBJECTIVES: To consider how reimbursement systems in 5 EU countries encourage or inhibit adoption of medical device technologies that facilitate care in an ambulatory setting. METHODS: A literature review of payment systems for medical devices operating in England, Germany, Italy, France and Spain was undertaken. Examples of technologies that could be used in an out-patient setting, but which were predominantly being used in hospital were identified. Uterine balloon endometrial ablation, low intensity pulsed ultrasound (LIPUS) and negative pressure wound therapy were investigated further, through interviews with country and product experts. RESULTS: Hospital and ambulatory sales could not be separated but some differences in total sales between countries were apparent.  Where HTA processes existed they appeared to slow down access to new technologies. Several interviewees highlighted a lack of expertise on local purchasing groups where decisions are often based upon in-year budget considerations which restrict access to some cost effective technologies.   Even where new technologies are found to be cost effective, DRG based funding systems are insufficiently flexible to establish new out-patient fee levels.  Hospitals have no financial incentive to treat patients in an out-patient setting if the procedure cost exceeds existing out-patient DRG fees. This prevents innovative technologies from being used in the most appropriate way and cost saving opportunities are missed. CONCLUSIONS: Health providers need to demonstrate new technologies are cost effective before commissioners agree funding outside DRG based fee systems. The negotiation process would be more efficient if commissioners pooled expertise for reviewing cost-effectiveness evidence and fed their conclusions directly to DRG code and Tariff setting authorities. New DRG codes and higher out-patient tariffs for cost effective technologies that enable a switch to ambulatory care could incentivise hospitals to revise care pathways.  Benefits will include lower procedure costs than in-patient treatment or improved outcomes for patients.