These days, it often seems the main struggle for medical device companies is not earning FDA regulatory approval, but rather, securing reimbursement and payment from CMS and private payers. Here are some tips for you to consider.
First, develop a reimbursement strategy early on in your product’s development by receiving recommendations from a consulting reimbursement specialist. Find out sooner rather than later about prospects for coding, coverage, and payment–the holy grail of reimbursement. Without one, venture capitalists will not invest in your company because it has become a requirement before they even think about funding. Second, identify the clinical problem first and design your medical device accordingly. Retrofitting technology from another application with hopes of making it suitable as a covered medical device rarely works. Large health plans are more sophisticated than you may think.
Health plans no longer give technology companies the opportunity to bully and brow-beat them into favorable coverage decisions. The value of key opinion leaders (KOLs) has been declining because insurers consider each KOL one man’s opinion. However, contacting KOLs for advice on how to proceed is invaluable. Realize early that a positive coverage decision is all about the scientific evidence you can provide to them through conducting well-designed clinical trials. How well does it work in real life practice, what treatment will it replace, what is the risk of it being used off-label, and is it more cost effective than current treatment/diagnostic methods both in the short and long term?
Make certain the device has clinical utility in real world practice. A good majority of medical device companies spend hundreds of thousands of dollars on clinical trials that they design without reimbursement consultation. Make sure your clinical results are consistently reproducible and achieve real world outcomes among all the practitioners who will use them. Keep in mind, too, that payers are looking for clinical solutions that cross therapies, i.e., use of a new device showing benefit over an expensive drug. Superior cost effectiveness data can be helpful when a new medical device shows the same benefit as compared to existing treatments. Payers often will not invest the time to analyze new devices that cannot identify a clinical or economic advantage. The same product can have much more value if the cost is lower.
If your problem is getting coverage for your device, put yourself in the shoes of a health plan medical director. Understand their perspective. There are thousands of medical devices ready to be evaluated by them in a year. What you need to do is present to them what they want – FDA approval, coding and scientifically-based evidence showing that your medical device does what it’s supposed to do and results in improved clinical outcomes in patients. Companies spend huge resources on marketing to hospitals and physicians, but often don’t consider who’s paying the bill. Think about how you would market to a payer since the process and the messaging are completely different.