The following may surprise some: FDA approval or clearance is never enough. Not if manufacturers want a commercially successful product. There is no doubt that addressing FDA issues is critical. But without data to show effectiveness, payers will not reimburse a particular product or technology—and even the most promising product will languish in the market without the appropriate coverage and reimbursement.
The use of remote monitoring devices has increased significantly over the last few years. I think it is fair to say that many manufacturers of these devices worry far more about FDA clearance and approval issues than they do about coverage and reimbursement. And that is a critical mistake. Clearing FDA hurdles is surely an important step but without a sophisticated coverage and reimbursement strategy, a product has almost no chance of market success. So, why do many manufacturers and other stakeholders not prioritize coverage and reimbursement as part of product launch strategy? Part of the answer lies in the complex, often confusing rules and policies many payers (both public and private) have in place. For example, just to look at a few:
- Differing reimbursement environment: reimbursement policies differ depending on the type of remote monitoring device in question. In other words, a reimbursement system that supports one monitoring device may not always provide an opportunity for another. Each device is usually evaluated by the type of data monitored, the frequency and duration of monitoring, how engaged a health care professional must be to obtain and interpret the data, etc.
- Multiple codes: a particular remote monitoring device may require multiple codes. Different codes may be required to capture the technical and professional components associated with a particular device.
- Limited reimbursement: Devices are reimbursed either through the technical component of a physician service (Medicare Physician Fee Schedule) or as a piece of durable medical equipment. How it is paid determines the amount of reimbursement.
- Attended monitoring: The more a device includes attended monitoring (by a health care professional), the more complex the reimbursement policy is likely to be.
Another issue for stakeholders is that payment for devices is the culmination of three separate but critical processes: a) coverage–the terms and conditions for payment; b) coding–the unique identifiers for diagnoses, procedures, devices & diagnostics, etc.; and c) payment–the reimbursement amounts paid by public and private payers. Each phase has its own unique and complex pathways, and although advocacy is a useful tool for each phase, knowing how to engage the relevant stakeholders for each process is more art than science. The final issue confronting stakeholders is that the time and resources spent trying to gain FDA approval or clearance often does not lead to the type of data payers often require to cover and reimburse new products—especially remote monitoring technologies.
So, given the importance of a sound reimbursement approach to the commercial survival of a remote monitoring device, here is a short list of some of the things that stakeholders should consider:
- Assemble a team that includes lawyers, coding consultants, and health economists to develop and implement a reimbursement and commercialization strategy outside of FDA issues.
- Ensure the clinical, commercial development, and reimbursement teams are collaborating to create a unified, coherent approach.
- Examine the current reimbursement landscape.
- Analyze similar devices in the same coding category. Design clinical trials (wherever possible) to generate the type of data that can also be used to persuade payers regarding the effectiveness of a particular device. Analyze the coding and coverage policies of major public and private payers.
- Engage stakeholders (health professional societies, advocacy groups) early in the development process.
The main takeaway here is that remote monitoring device manufacturers need to incorporate a coverage/reimbursement strategy as early as they do an FDA strategy. Ultimately, the commercial success of a product depends on whether and how payers reimburse for a product just as much as it does on how well FDA issues have been addressed.