Part 3: Designing for CMS and reimbursement.
Reimbursement of medical devices in the U.S. is driven by three qualifying questions:
Coding: is there a HCPCS (Healthcare Common Procedure Coding System, administered by the Center for Medicare and Medicaid Services (CMS) [i]) code that describes your device or the manner in which physicians will use it?
Coverage: do most private healthcare insurance companies and Medicare (the U.S. Federal Health insurance program for +65 years old Americans) cover the procedures enabled by your device, and under what clinical circumstances?
Payment: will caregivers and hospital be paid enough to encourage the adoption and acquisition of your product without creating a cost burden that would discourage government and private insurance coverage?
Most MedTech companies located outside of the U.S. have a limited understanding of the importance of these questions, but some early product definition decisions might be extremely counterproductive when coding, coverage and payment for the U.S. is sought for later in the product life cycle.
This is particularly easy to illustrate when recognizing that the clinical “Intent of Use” of a new product is an attribute that emerges relatively early in the development process. We have explained above that “designing for FDA” is a best practice that will influence the selection of an Intent of Use to optimize the regulatory position. For instance, in identifying the correct predicate device in the 510(k) application process.
If coding and coverage criteria (see definitions above and in particular the reference to clinical Use and context) are not also taken into account, opportunities for coding and coverage might be missed. Sometimes simple wording variations make an entire difference.
Similarly, the technological characteristics of the product might have a profound impact on the regulatory pathways (see the FDA definition of “Substantial Equivalence” mentioned above) and on the cost structure of the product. Reimbursement payment values in the U.S. (and their projections in future years) must be considered in detail to set cost design objectives upfront in the product development cycle in order to avoid pricing struggles downstream in the market introduction process.
This is why “Designing for CMS” becomes an essential part of any new product development process, which needs to be implemented 16 to 24 months before specific U.S. Market Entry plans are drafted.
 Mathieu M. Petitjean, Ph.D. is the CEO of MedNest, based in Princeton, NJ, USA
 Susan Z. Paquette, MBA is an Executive Consultant at MedNest, based in Minneapolis, MN, USA
MedNest is a contract Operations Company specialized in the US market entry of Medical technologies based in Princeton, Boston and Minneapolis in the USA. MedNest has launched +45 products and ventures since 2007, in particular in the area of convergent medical technologies.