Medical device companies spend countless hours on technology development, regulatory strategy, and regulatory submissions. To generate revenue from your cleared or approved product, a sound reimbursement strategy for medical devices is essential.
Because achieving market access is so complicated and varies by country, many medical device developers don’t consider reimbursement until after they have developed clinical data. Does that data include the outcomes that payers want to see? To make sure they do, plan early so you can generate payer-required data within planned clinical studies.
3 Pillars of Reimbursement
To obtain reimbursement for a regulated product, manufacturers must have the following three interdependent components in place:
1. Coding: Healthcare facilities and physicians use several types of codes and reimbursement methodologies to obtain reimbursement from payers. The most common coding systems and reimbursement methodologies include:
- AMA Current Procedural Terminology (CPT): Managed by the American Medical Association, used by physicians to bill for medical services and procedures
- Healthcare Common Procedure Coding System (HCPCS): Managed within CMS, used for medical services not included in the AMA CPT code set as well as medical devices and products
- Diagnosis Related Grouping (DRG): Created by CMS, used by hospitals for inpatient medical procedures and devices
- Ambulatory Payment Classification (APC): Created by CMS, used by hospitals for medical procedures and devices used in the hospital outpatient setting
- ASC Grouper: Created by CMS, used by ambulatory surgery centers for medical procedures and devices used in free-standing ASCs
If a code already exists for your type of device and/or procedure, you have an easier path to reimbursement. Developers of novel devices must apply for a new CPT and/or HCPCS code, which takes anywhere from six months to two years with supporting evidence.
2. Coverage: Whether a device and the associated procedural service receives coverage varies by the payer and by different branches of payers. For example, Blue Cross Blue Shield of South Carolina may cover a newly approved medical device/service while Blue Cross Blue Shield of California denies coverage. If a payer considers a device/service investigational/experimental, it will not reimburse providers for the use of that device even when there is an existing CPT code available for billing.
3. Payment: The amount of reimbursement may or may not be enough to cover the cost of the device plus related facility fees. For example, if you price your implant at $8,000 and payers reimburse at $10,000, it’s unlikely hospitals will adopt the technology because the balance will only cover a small portion of the remaining costs.
Case Study 1: Code Application and Payer Outreach
The manufacturer of a plate used in open reduction internal fixation (ORIF) surgeries struggled with market access, only securing a limited number of sales for the device.
Challenge: Lack of data to support a Category I CPT code. Category I codes are permanent and, therefore, beneficial for reimbursement. The manufacturer also lacked payer coverage in its key market: older adults covered by Medicare.
Solution: Avania developed a strategy to obtain Medicare coverage one Medicare Administrative Contractor (MAC) at a time. First, Avania secured a Category 3 CPT code — a category reserved for new technologies — for the surgical procedure associated with the device.
With that code in place, we successfully obtained Medicare coverage from the MAC with the largest number of potential patients. We used that win to propose coverage of the device/procedure to the next MAC with a large number of potential patients. Again, we succeeded. We continued to approach MACs individually until we secured national Medicare coverage. Successful submissions to private payers followed.
Result: The device is accepted by many payers today for defined indications.
Lesson: Lack of data doesn’t have to be a downfall. With a smart strategy, you can build your case and obtain reimbursement in key markets.
Medical Writing for Regulatory Compliance and Market Access
Medical writers prepare a wide range of clinical and regulatory documents, from investigator brochures and protocols to clinical study reports and journal manuscripts. Much of their work crosses over into market access.
Now that EU Medical Device Regulation (EU MDR) has come into effect, medical device manufacturers must prepare clinical evaluation reports (CERs) for every device sold in the EU throughout those products’ life cycles. A CER is necessary to obtain a CE Mark, and the clinical data included in that report must be updated at specific frequency intervals based on the device’s risk profile.
Medical writers not only prepare CERs but also conduct gap analyses and literature reviews to support CERs, along with PMCF plans, reports, SSCPs, PSURs, and so forth. Because maintaining updated CERs is crucial to obtain certifications and to maintain certificates, medical writers have become key players in market access teams.
Case Study 2: EU Market Access Strategies
A manufacturer needed a CER for its endoscopy device, which included multiple components including an endoscope and a balloon.
Challenge: As Avania’s medical writing team started preparing the report, they noticed the balloon had undergone material changes from its previous generation. Therefore, the device could not be considered equivalent to the endoscopy system that the sponsor intended to bring to market.
Solution: The medical writing team advised the client to break down the CER’s scope into two CERs to seek certification separately for the balloon and the rest of the system. The manufacturer was therefore able to submit a CER for the endoscope while holding off on the balloon until further testing would be concluded for this specific component.
Result: Avania brought the endoscope to market successfully within the designated time frame. The balloon received its CE mark at a later date.
Lesson: Experienced medical writers can help uncover gaps in your data and provide regulatory strategies for successful device certification.
Regulatory clearance or approval is a tremendous achievement; however, the path to creating revenue for your device continues with a well-thought-out reimbursement strategy. Start planning for reimbursement during clinical trials to generate the data you need for success.