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Reimbursement Complexity Centers on Need for Longer-Term Studies

ORTHOWORLD® Members of all stripes—providers, OEMs and suppliers—say that they’ve been impacted by complexities in the reimbursement system. Reimbursement certainly is not a new challenge. The push for longer-term data, though, is no longer a nice-to-have selling tool, but a must-have for coverage.

“The biggest challenges to obtaining reimbursement from a payor come from not establishing a business case or a cost-effectiveness argument. It’s all about establishing medical necessity for that item or service,” says Richard Baer, M.D., a reimbursement consultant. “The literature has to establish improved health outcomes.”

Baer previously served as Medical Director for the Medicare RAC Validation Contractor and as Lead Medical Director for National Government Services, one of the largest Medicare administrative contractors in the U.S. He says that the key to obtaining reimbursement is the quality of the scientific literature. For orthopaedic devices, that may mean robust, double-blinded control studies at academic centers. He says that studies should push for large patient populations, with studies of at least 100 patients looking more credible.

“The thing that payors are looking for, and is new in the landscape as a barrier to coverage, is longer-term evidence. In the past, particularly for a device, a six-month study was sufficient. Now, payors want to see two-, three- or five-year follow-ups to make sure that the item they’re paying for is durable and the benefit is sustainable,” he says. “One thing that payors are now requiring as a product is coming to market is that companies go back and do another study.”

Kelli Hallas, Executive Vice President of Emerson Consultants, notes that many of the studies being conducted are postmarket, undertaken to satisfy the requirements from payors for coverage, frequently at great expense to the device company.

One step that companies should take to ensure coverage is to open channels of communication with their prospective payors. “When a clinical protocol is being developed to support the regulatory strategy, companies need to have communications with the payor community to ensure that the data they’re collecting will fulfill the payor’s requirements for coverage,” she says.

Baer agrees. “When you’re developing your strategy for a new product, the requirements of the payors need to be taken into account. Your strategy has to extend from project startup through payor coverage, not from project startup through FDA clearance,” he says.


The full article appeared in the April issue of ORTHOKNOW.
In recent years ORTHOWORLD interviewed executives on the barriers to data collection and the benefits of strong data.