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Reimbursement Tips: Four Things Payors Want

Familiarize yourself with these four tips to improve reimbursement for your orthopaedic device.

The complexity of reimbursement may be great, but the burden may be lessened if you begin with the end in mind—and know what you’re up against—and make good choices throughout the process.

At OMTEC 2017, Tim Hunter of Musculoskeletal Clinical Regulatory Advisers (MCRA) shared tactics that medical device companies can use along the road to product commercialization, easing the reimbursement challenge and building cross-departmental solidarity to meet the end-goal: patient access. Mr. Hunter, who is Vice President of Health Economics, Reimbursement & Public Policy for MCRA, has nearly 20 years of experience with the matter.

One reason for the growing need to put reimbursement at the front of your mind is that orthopaedics is a high-cost arena. As any specialty grows, says Hunter, then the more cases, the more cost and the more attention it gains from payors. Health plans are examining new technologies and re-examining existing ones, pressuring providers and manufacturers to justify coverage. This was not an issue 20 years ago, which may explain why so many are surprised when coverage becomes complicated. It wasn’t a problem before—but it’s the reality, today. And it bears saying that the wrong choices, or underinformed choices, made on the path to reimbursement can cause lasting damage to coverage and payment for the device that you’ve invested so much in.

Well-informed is well-armed. It’s helpful to know: what are payors looking for, now? Hunter described four things that payors are mindful of—what’s important to them. Familiarize yourself with these, and you’re ahead of the game.

Increasing Clinical Data Requirements
You’re not just doing a study. It’s studies. Payors seek multiple studies that all show the same outcome to increase their comfort level with new technology (which is often times more expensive).

With these studies, payors seek longer-term outcome reporting. Not just two-year, but five-year, seven-year data. As Hunter explained, while two-year data may get you on the market, FDA’s most likely going to ask you for extended data after approval. If they don’t, Aetna, Blue Cross Blue Shield, Cigna and UnitedHealthcare most likely will.

Furthermore, specialty medical societies want that extended data, too. When societies are deciding which technologies to fight for, they want the same data in hand that the payors have.

Specificity of Clinical Data Endpoints
Increasingly, you will be asked to show study data that includes superiority, not just non-inferiority—not just showing the technology to be as-good-as or not-worse-than an existing standard of care. Even Medicare wants to see superiority data in primary endpoints.

Also, if you’re collecting data that shows improvements in pain levels, be mindful that what health plans really want to see is improvement in degrees of function. That’s a mind switch—in orthopaedics, pain usually drives the patient to pursue joint reconstruction. But what health plans want to know is, can Mrs. Smith go to the grocery store? Can she perform daily activities? This may mean a change to the data that you thought you needed to collect.

Coverage Requirements
Payors want to limit their exposure by specifying coverage criteria—in other words, Aetnas and Cignas want to cover the most narrow population possible. What’s this mean for you? Be mindful of the structure of your clinical study; you want to collect data that will support a widely-covered population. Negotiate with FDA over the wording in your FDA label, watching for restrictions or contraindications that can knock out a chunk of patients who might otherwise be covered for your product.

On that second point—for instance, suppose that FDA wants to add a contraindication for weight or failure of a previous treatment. What does that do to your ability to get payors to say yes to coverage? What does that language do to your available market size? Negotiations with FDA matter, because they could affect your ability to get reimbursed.

Changing Payment Methodologies
Bundling, for instance. As payors seek to transfer risk, they’re interested in bundling devices into procedures, and bundling payments to doctors and hospitals. They want to know what the cost will be for an individual case, overall. These changes can impact the manner in which medical device manufacturers sell their products to providers. One easy way to improve the impact of data collection during a clinical study is to proactively understand the cost drivers and pressures for a hospital or facility, and collect health economic data points that address those drivers and pressures.

These four aspects of payor concern are just the beginning of what Mr. Hunter shared at OMTEC—you can review his presentation slides here. Of equal use was his parting reminder, which is: payors don’t want to pay the way they did in the past. They don’t want to pay more for devices or new technology. They don’t even want to pay more for better. They are in a contraction world, and you are a medical device company that is trying to make the money back from all of your investments in the technology, to get to the end goal: patient access.

This behooves you to begin with the end in mind. Spend a bit of time and resources early in your commercialization process to grow your understanding of what’s important to payors. It can save money and reduce frustrations down the line.

At MCRA, Mr. Hunter and his team work with companies to develop and execute strategic plans for market adoption, including new code development, clinical and health economic evidence development and dissemination and payor outreach and education to support appropriate patient access to novel treatment options.

Mr. Hunter joined MCRA in 2007 from Johnson & Johnson (Ortho Biotech, LLP), where he was responsible for analyzing the impact of Federal legislation and regulations on company technologies and competitive markets. Mr. Hunter also has served in management functions with Covance Health Economics and Outcomes Services and the U.S. Department of Health and Human Services.

Do you have questions spurred by this article? Send them to Julie Vetalice via This email address is being protected from spambots. You need JavaScript enabled to view it..

Additional Resources:
Proving Medical Necessity: the Need for Evidence in Reimbursement
What the Future of Orthopaedics Means for You