Perspectives on Medical Reimbursement
By JR Associates
Among our consultants, the MDMA Coverage, Reimbursement and Health Policy Conference is more than just another event on the business calendar. For us, it is an important professional tradition that began 21 years ago.
That’s when our President, Judy Rosenbloom, and VP of Global Health Policy, Jo Ellen Slurzberg, helped the Medical Device Manufacturer’s Association introduce this educational forum. Each year since that launch, Judy and Jo Ellen have played an active role in developing and delivering relevant programming.
Meanwhile, the device market has experienced phenomenal change. Medical technologies, clinical practices and related healthcare policies continue to shift dramatically. Yet the conference’s overarching objective remains the same. Essentially, MDMA wants to improve patient access to effective new medical products by empowering manufacturers to navigate today’s complex reimbursement landscape.
In recent years, presentations focused on the shift from volume-based care (fee for service) to value-based reimbursement (fee for value). Not surprisingly, the emphasis on value-based care continued in 2018. However, discussions also considered how smaller medical technology innovators can ensure that regulatory changes create a level the playing field for all – not just large manufacturers.
DAY ONE
Reimbursement Strategic Planning: Challenges and Cases
In this interactive presentation, Jo Ellen helped attendees understand the deep relationship between reimbursement and market access, within the context of a successful business strategy.
First, attendees explored the three cornerstones of reimbursement – coverage, coding, and payment. Jo Ellen explained why it’s important to treat these elements as strategic objectives. Then the session focused on practical ways to assess opportunities, mitigate risks, develop appropriate milestones and manage timelines on the road to reimbursement.
Cases Illustrate Key Concepts
To help participants envision how reimbursement strategy can be woven into business plans and product development efforts, Jo Ellen teamed up with industry colleague, Lynn Saccoliti to discuss real-world examples of best practices, as well as missteps and misperceptions.
For example, both Jo Ellen and Lynn agree that pulling the trigger too soon is a common pitfall. In other words, new ventures tend to fast-forward without taking time to position reimbursement activities strategically.
As Jo Ellen says, “To avoid unintended consequences, device innovators should first consider the possible negative repercussions of submitting code applications or requesting coverage before they have sufficient data to support those actions.”
Above all, manufacturers should aim to develop clinical evidence, regardless of the regulatory path. In other words, rather than analyzing coverage, coding, payment separately, think of them as a “whole” comprised of interdependent parts. This will help you avoid choosing a path that creates issues elsewhere.
Jo Ellen also emphasized the importance of communicating effectively with board members and executives, so they understand the relationship between reimbursement and business strategy and the timeline for obtaining reimbursement, as well as their roles in advancing this agenda.
Lastly, Jo Ellen suggested ways that small device companies can become involved with alternative payment programs. Specifically, she encouraged manufacturers to position themselves as key stakeholders, so they can engage more effectively with providers, payers and patients.
Top Takeaway: Reimbursement is Not a “One-Size-Fits-All” Model
Regardless of a product’s position, aligning the business plan and reimbursement strategy is essential. For example, “first movers” in the market must be supported by appropriate reimbursement objectives, as well as clinical work tied to those objectives. Similarly, reimbursement efforts should be customized accordingly for “fast followers” and even late entrants.
This need for strategic alignment also extends to pricing and payment. But unfortunately, many manufacturers ignore this by offering a “me too” product at a premium price. They may see an advantage in going to market faster because minimal data is needed for FDA approval, coverage, coding and payment. But in the long-run, the fundamental misalignment between product positioning and price structure can jeopardize market momentum.
DAY TWO
Session 1
Shifting From Volume to Value
In this session, Jo Ellen partnered with Beth Halpern, an attorney at Hogan Lovells, to discuss the evolution of value-based payment and alternative arrangements. They also examined issues that smaller companies may face with these models.
First, Beth discussed demonstration projects that CMS is spearheading through the Center for Medicare and Medicaid Innovation (CMMI). Although these initiatives are helpful, their size and scope often put them out-of-reach for small companies.
Therefore, Jo Ellen recommends that resource-strapped manufacturers consider creative ways to participate. For example, it may be effective to join forces with other companies. However, risk-sharing can present its own set of challenges.
For instance, partners must be willing to drive a program forward and support it among payers and providers. This means it’s important for partners to agree on their goals, commitment and level of effort.
They must also be prepared to articulate why the program is clinically and economically useful and how they intend to drive it forward. In addition, they’ll need to know how much clinical and financial data will be sufficient to measure and evaluate risk.
Top Takeaway: Choose Leverage Wisely
Partnering can be a cost-effective way to develop, manage, measure, refine and expand small-scale value-based reimbursement programs. However, successful partnering requires significant cooperation and coordination among participating companies. Therefore, all players should carefully assess and align motivations and methods in advance.
Session 2
Navigating CPT & RUC: Implications for Access
In this presentation, Jo Ellen cautioned device manufacturers to think twice before simply requesting a new CPT code, because that can lead to serious negative business consequences. Then she explained how device innovators can approach the process in a way that minimizes adverse outcomes.
Planning and preparation sometimes require a multi-year effort to ensure that CPT criteria are met and that stakeholder and company goals are aligned. However, according to Jo Ellen, thorough research and analysis is worthwhile because it helps avoid unintended downstream reimbursement consequences.
Specifically, she recommended that organizations investigate Category I and Category III CPT code options, benefits and coverage risks, in conjunction with RUC code valuation and payment considerations. She also recommended considering MDMA goals for greater transparency in the process.
Top Takeaway: Choose CPT Code Strategy Wisely
Pursuing CPT coding in isolation is risky business. You can reduce that risk by including coverage and payment considerations in the equation.
Our consultants believe that CPT strategy is critical and should be tailored, accordingly. This sets us apart from some who recommend the same code path for all technologies or procedures. However, we’ve seen it lead to long-term reimbursement problems that are difficult or impossible to reverse.
Again, for best results, don’t start by requesting a new code. Instead, begin with strategic planning in the early stages of clinical and product development.
Are you a medical device innovator? Do you need guidance to prepare a reimbursement strategy and action plan that will help you obtain reimbursement and market access?
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