Getting Medtech Covered: Payer Strategy Best Practices

Kuo Tong and Raj Stewart in Med Device Online

Many medical technology companies rely on securing payer coverage as a critical component toward achieving their revenue goals and realizing a return on investment on new products. Yet, few medtechs fully understand how to navigate the payer-coverage process, or how to fulfill its mercurial demands.  

In the past 30 years, the only constant for medtechs seeking payer coverage has been the need for strong clinical evidence that a product does what the company says it will do, and provides a clinical benefit to the intended patient population. As a result, the only real control a medtech has rests in its own ability to articulate and prove the technology’s market value, while anticipating the myriad variations in coverage requirements.

In this no-guarantees payer-coverage industry, virtually everything — from stakeholders to priorities to standards for evidence — is subject to change. Medtechs must plan to be proactive and deploy layered strategies to shift the coverage odds in their favor.

Objectively Assess Coverage Potential

Unlike one-payer system countries, such as Germany and Japan, the United States’ system is fragmented, which adds significant complexity to seeking and attaining coverage. In the U.S., each payer has individual and differential policies, processes, and personnel to evaluate products; and, each payer can opt to grant full, intermediate, or no coverage for the same or similar therapy options across different systems and regions. Even “me-too” and improved versions of existing products might not be awarded the same coverage as their predecessors. Insurance corporations might make different territory-by-territory decisions — for example, for the same treatment option, residents in one state might have different coverage than residents in another state.

Furthermore, with mergers, consolidations, contractors, and staff turnovers, the conversations medtech companies had with payer representatives as little as a year ago may no longer be relevant. Case in point: the Medicare administrative contractor for parts of the southeastern United States changed from Cahaba GBA to Palmetto GBA in early 2018, so medtech companies seeking coverage in that area now must work with a completely different stakeholder.

Considering all these factors, companies that conduct an objective assessment — especially one performed by a detached third party — tend to be best-positioned to seek and attain payer coverage.

The assessment should include a comprehensive evaluation of the product profile, provable market value, and potential barriers to gaining payer coverage, so strategies can be put in place to resolve any issues and seek appropriate coverage. The most common coverage barriers tend to be information gaps that also hinder market adoption, including:

  • Patient segmentation — The medtech company has not thoroughly evaluated or scientifically validated the ideal patient segment that will receive the best clinical benefits from the therapy option, and/or has not prepared guidelines for clinicians to help them understand best-use scenarios, and/or has not presented evidence specific to a targeted payer’s beneficiaries. For example, in simplest coverage terms, Medicare will be looking for clinical evidence specific to its beneficiaries (i.e., patients aged 65 years or older, or who qualify through Social Security Disability Insurance). So, either a substantial piece of a study or a whole study will need to prove and validate results for patient segments within these populations.
  • Patient journey — Understanding where in the patient journey the treatment option will be utilized informs the size of the patient pool, which clinicians to target as customers (surgeons vs. primary care physicians, for example), and how to position the product in the commercial space, among other key variables. These insights are critical in sizing the potential need for the technology, as well as understanding the market dynamics for adoption, including the inclusion/exclusion criteria that help payers properly frame medical necessity criteria.
  • Hard evidence — Local and national payers have high standards for evidence proving a technology’s positive outcomes; it must be able to withstand scientific scrutiny. The evidence also should validate clinical and economic outcomes specific to a given payer’s pool of beneficiaries, as well as weigh those outcomes against in-use technologies.

Several other critical factors — all of which revolve around proving the safety, efficacy, and economic justification for a therapy option — can inhibit a technology’s market value and payer coverage opportunities. An objective assessment will provide insight into the probable outcomes of each potential strategy against commercial goals, including projected payer coverage profiles, opportunities to strengthen the product offering and its positioning, and secondary strategies (should an unexpected need to shift course arise). 

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