Targeting Payers, Getting Coverage

Given the complexities of reimbursement, what can a manufacturer do to influence the process and achieve the best possible result? First and foremost, it is never too soon to begin thinking about issues related to coverage and reimbursement. Many companies develop unique medical devices with the expectation that issues such as coding, coverage and payment will take care of themselves with minimal effort expended by the company because their medical device has it all by offering life-changing benefits. This expectation often is the result of a company’s misconception that clinician demand will force public and private payers to establish reimbursement. Unfortunately, that almost never is the case, and many promising technologies fall by the wayside after being starved out of existence by inadequate reimbursement. There is little to be gained by launching a product that has a limited likelihood of being covered and reimbursed.

With 324 private health plans nationwide, it is impossible for most manufacturers to approach all private payers simultaneously; therefore, it is most effective to develop a targeted approach. Select payers that have a large membership (e.g., Aetna, Cigna, United Healthcare) because gaining coverage from them will create a momentum such that others may follow. It is important to present the facts that a payer is most interested in hearing: cost, safety, and effectiveness. Even though most payers understand that new technologies are initially more expensive, the manufacturer must demonstrate the value of the increased costs. If the manufacturer is prepared with all the facts the first time around, there’s a good chance the product will be covered.

Vincent Jaeger, M.D.
860-461-7656
vjaeger@jmr-assoc.com