The Most Important Factor in a Device’s Success in the  
Marketplace is Coverage and Reimbursement 
by Managed Care Organizations

Jaeger Medical Research Associates specializes in securing coverage and reimbursement of medical devices and procedures by Managed Care Organizations, thus shortening the time-to-payment for your new product.

Does it seem like you’re running into coverage, payment or coding hurdles at every turn…..“Your technology is promising, but it is “investigational” because there is insufficient clinical evidence to support coverage”. Did you know that 510(k) clearance or premarket approval (PMA) by the FDA is necessary, but does not guarantee coverage because the evidence level required to gain market clearance may fall far short of the standards essential for a favorable coverage decision?

One must begin a strategic plan early in the product’s development cycle to ensure a positive coverage and reimbursement outcome. It is imperative to develop parallel regulatory, clinical and reimbursement paths that address the needs of both the FDA and the payers who ultimately control the product’s marketing destiny through their policy-making decisions. Hospitals and physicians may use the device, but third-party payers/insurers reimburse and they set the rules. 

Coverage is directly related to the relevance and quality of the scientific evidence available in the medical literature to support a device’s safety and effectiveness in substantially improving health outcomes over existing technologies. Coverage is purely a clinical matter predicated upon the principles of evidence-based medicine. For most Health Plans, cost doesn’t even enter into the picture; cost is considered by their contracting departments. If an economic model is desirable, concentrate on cost-effectiveness analysis or cost-benefit analysis, not straight cost. One must demonstrate a financial benefit on longer-term medical expense that fits the reimbursement landscape of private and government insurers.

The healthcare environment is intentionally complex, competitive and continuously evolving to challenge new products. The regulatory process is intense and lengthy. Reimbursement rules are constantly changing. Payers do not automatically pay for new technology regardless how effective a device may seem to be or how good a story a manufacturer may tell. Each payer decides for itself whether it will cover a new technology. The way to get Medicare and commercial payers to cover and reimburse new devices and procedures is to show a positive impact on the endpoints of clinical outcomes, functionality, and/or lifestyle improvements in well-designed trials.