You and your team have been working hard to gain approval and successfully launch your device. However, you may be forgetting an important consideration for market success: reimbursement.
The healthcare landscape is changing rapidly and companies that fail to develop a reimbursement roadmap will be at a disadvantage. Left unchecked, healthcare expenditures are projected to be almost 20% of the U.S. gross domestic product by 2027 (Health Affairs, 2019)1. The goal of policy makers, payers, and other stakeholders is to bend this cost curve. No longer will new technology be reimbursed simply because it has FDA approval. Regulatory clearance only gives medical device companies the opportunity to market a device – it does nothing to ensure payment for a device or product. Payers and providers are now requiring technology innovators to demonstrate both clinical AND economic value before they will consider the use of a new product. If financing is a critical consideration in your business plan, be prepared for investors to ask hard questions about whether there is a path to reimbursement for your technology in addition to asking if you have met minimum regulatory requirements. Failing to have a plan to address these issues may leave you stalled in the marketplace.
Make reimbursement a priority
With reimbursement planning, you can boost the chances of market success and optimization for your technology. If you are developing a new technology, plan your reimbursement strategy early in the product development phase. Early planning can contribute to design considerations that take advantage of reimbursement requirements. Also, you may be able to save time, money, and effort by adding clinical and economic value endpoints to your regulatory approval studies for a new technology.
Case in point: The federal government recently recognized the need for early payer input. In late 2016, the FDA implemented new regulations inviting Medicare and private payers to join study sponsors at presubmission meetings to discuss evidentiary endpoints important to the payer community.
Even if your technology is already in the marketplace, you should continually review your reimbursement needs. Coverage, coding, and payment policies are constantly changing and can have a significant impact – positively or negatively – on payment for your product.
Making reimbursement a priority is a simple two-step process. First, conduct a reimbursement assessment to understand the existing payment landscape for your product. Secondly, use the assessment to develop a plan to take advantage of payment opportunities or to address gaps in reimbursement: the need for evidence development, coding initiatives, or obtaining payment from payers.
Conduct a reimbursement landscape assessment
As the old cliché goes, you can’t know where you are going until you know where you are. A reimbursement assessment is a survey of the current coverage, coding, and payment landscape for your medical technology. It helps you understand where your product fits in the ever-changing healthcare reimbursement ecosystem. Just as importantly, it helps identify reimbursement challenges and opportunities as you move forward. While individual assessments will vary depending on the technology, common elements include the following:
- Coverage Status – How are payers such as CMS, private payers, Medicaid, etc. looking at the device?
- Current Coding – What codes are physicians, facilities (hospitals, outpatient, ASCs), homecare, etc. using?
- Payment – How does reimbursement compare to charges?
- Competing/Proposed Technologies – Are there similar products?
- Status of Evidentiary Needs – Does the technology improve health outcomes and is it cost effective?
- Findings and Recommendations for Strategic Plan – What does the assessment tell you about strategic planning needs?
Wherever you are in your product development cycle, conducting a Reimbursement Landscape Assessment is essential to optimizing the market opportunity for your medical technology.
Develop and implement a strategic reimbursement plan
Once you have conducted a comprehensive Reimbursement Landscape Assessment, use the information to develop a Strategic Reimbursement Plan. A well-designed plan should help you gain clarity on what reimbursement initiatives need to be completed and when. Below are examples of key elements to consider, and when to consider them, for your plan:
A well-conceived and well-executed Strategic Reimbursement Plan based on a comprehensive review of the reimbursement landscape for your technology can be the difference between success and failure in this era of value-based medicine.
1 Health Affairs 38, No. 3, Feb 2019: National Health Expenditure Projections, 2018-2027.