Medical device innovations: From FDA approval to patient access

Dee Kolanek, Vice President of Reimbursement, INSIGHTEC - Print  | 

FDA approval is key to the success of new medical devices, but it’s only part of the mandate to ensure commercial success.

As the industry continues to develop novel medical innovations, there’s a critical barrier between FDA approval and patient access: insurance coverage.

Attaining insurance coverage of any kind can prove to be an arduous and time-consuming process for medical device manufacturers. Often it takes a company two-to-three years to prepare all the assets needed to secure favorable coverage determinations from health insurance plans.

Every medical device company must embark on this journey with a clear strategy how to achieve success from a clinical and economic standpoint. The strategy should include the following three critical elements:

Determining the need for securing a Current Procedural Terminology (CPT) code

While a specific CPT code is not a requirement for obtaining positive coverage determinations, having a dedicated CPT code could impact the timeline for obtaining insurance coverage and commercial success. There are different ways companies can secure a CPT code. CPT codes are medical code sets used to report medical, surgical and diagnostic procedures and services to physicians, insurance companies and accreditation organizations. A medical device company can choose to either seek a Category I or Category III code or can choose to use an unlisted code. Let’s go through the pros and cons of each:

Category I – This is considered the gold standard code and the ultimate goal for most medical devices. To qualify for a Category I CPT code, a medical device must already have FDA approval, and often times require professional societies to assist and drive the process. Specialty societies, (e.g., American Academy of Neurology and American College of Surgeons, and others) work as advocates on behalf of physicians and are proponents for procedures they perform regularly. Because a Category I code is easiest for physicians to use, professional societies are key groups that help push a device or therapy to obtain a Category I CPT code.
Category III – This code is considered a temporary code, also knowns as a "tracking" code and does not require a medical device to be FDA approved and it’s much easier to obtain than a Category I code. Category III codes allow providers, both hospitals and physicians an avenue for claim submission to insurance companies. Obtaining a Category III CPT code can also provide an avenue to seek reimbursement levels from the Centers for Medicare and Medicaid Services (CMS). A company may begin with a Category III code then later seek Category I CPT code.
Unlisted Procedure Code – Some companies may choose a third option – to use an existing unlisted procedure code. It is still possible to secure commercial and insurance success for your device, and there are some devices that choose to indefinitely use unlisted codes, however, the process physicians are required to go through to file a claim for procedures using an unlisted code is onerous and cannot be done digitally, so could be less suitable from a commercial perspective.

Determine payment level

Once a procedure has a CPT code, the next step is to work with CMS in order for CMS to determine the payment level for the treatment/procedure. The payment level could be obtained well before the procedure is considered a covered benefit by Medicare.

Show clinical evidence

Medical devices must provide clinical evidence to support favorable coverage decisions from health insurance companies. All medical devices must undergo rigorous clinical trials for FDA approval, and then ongoing clinical trials that include up to five year follow-up to support favorable coverage decisions. While there are no specific requirements that medical device companies must meet to prove clinical efficacy, this approach tends to be most effective.

While a medical device can be used by academic medical centers for research purposes, FDA approval is required before a medical device is widely available and approved for commercial use. To gain FDA approval, proving the safety and efficacy of a procedure is essential.

Access to the device/technology

Once a medical device is FDA approved, commercialization begins. There’s only one more hurdle – ensuring that favorable coverage from health insurance plans is in place for the procedure. Providers need assurance that they will be compensated for the procedures they perform.

I believe every patient living with a chronic condition deserves the best treatment available. Over the years, I’ve helped secure Medicare coverage for many different medical devices. The elements needed to succeed (coding, coverage and payment) are vital. By focusing on these, medical devices that truly improve patient care will be more readily accessible to patients across the country under Medicare coverage, as they should be.

© Copyright ASC COMMUNICATIONS 2019. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

To receive the latest hospital and health system business and legal news and analysis from Becker's Hospital Review, sign-up for the free Becker's Hospital Review E-weekly by clicking here.