Underestimate reimbursement and early market access planning at your own peril. This was the prevailing theme at Fogarty Innovation’s first-ever reimbursement workshop, where a panel of medtech leaders with extensive experience in the field shared first-hand lessons learned from navigating the complexities of the public and private payer system.
Marga Ortigas-Wedekind, who serves as Fogarty’s chief commercial strategy officer and heads educational programming, kicked off the session, explaining her role in helping counsel companies on go-to market and reimbursement strategies. “We frequently revisit the adage: ‘Start with the end in mind and work backwards from there.’”
That’s especially important in reimbursement, which tends to be an afterthought for many startups who are laser focused on clinical strategy, FDA clearance and other critical elements. Yet, as she points out, “It has to be considered part and parcel with all the other important strategies.”
This theme echoed throughout the presentations from five panelists:
- Jessica Holmes, founder and principal, Regency Market Access Consultants
- Mike Kujak, CEO, Francis Medical
- Stephanie Toney, global market access and reimbursement specialist
- Mark Topash, founder and CEO, HLTHINNOVATORS
- Leslie Stephens, vice president, market access and marketing, Saman Tree Medical
Throughout the day, the panelists led participants through a market access exercise for a fictional early-stage medical device which allowed them to think through the various implications for choosing certain paths vs. others. Panelists also shared not only their hard-won wisdom, but practical applications via case studies. A very brief synopsis of each of their insightful presentations follows.
Jessica Holmes
The event kicked off with Holmes sharing an overview of reimbursement strategies and terms to help create a shared vocabulary to guide strategy.
She began with a blunt truth: “Unfortunately the healthcare system is not a free market system; it’s not like any other system where you release a great product to the world, and people will buy it because of its value,” she said. “Instead, there are many stakeholders who can potentially put their thumb on the scale for or against what startups are doing, so it’s imperative to always take them into account.”
This means that, starting from product inception, entrepreneurs need to make informed decisions and carefully weigh which features and technology will add the most measurable value which can be used to garner additional reimbursement. Integral to this is understanding how the payer mix works; for example, when introducing a product aimed at the Medicare and Medicaid markets, it’s important to recognize that facilities are taking a loss on every potential purchase of a technology because of how the markets are set up. “That’s why it’s important to understand the patient population that your technology addresses and where it fits into the treatment algorithm,” she said.
Creating a solid payment strategy requires an understanding of the three pillars of reimbursement—coverage, coding and payment—along with what Holmes considers the “fourth pillar”—clinical data. “Market access begins with the clinical data because you can’t have sound health economics unless you have the clinical outcomes to ascribe a cost, such as a procedural cost savings, comparing your technology with what’s already available to the patient population you’re targeting,” she explains.
She also explained how they are all connected. “Coding only matters if there’s coverage, but having a code does not mean that you’ll be covered or paid.”
Mike Kujak
During his presentation, Kujak shared how his team approached reimbursement at his current company, Francis Medical. “It was not a straight path at all…we pivoted, pivoted, pivoted, and we’re still pivoting today.”
His key piece of advice? A familiar refrain: Start with the end in mind. “Pretend you’re going to commercialize the product today—what are all the things you need to do? Map out who is your customer, which is not just the physician, but also the patient, nurses and primary care physicians. Figure out where the product or procedure could be used and the patient care pathway so you can fully appreciate and understand where your product fits into the treatment pathway.”
A key component to success is hiring good consultants and creating a physician or reimbursement advisory board. “It’s really important to have a cross-functional team with lots of experience,” he said. “Find physician champions within your therapeutic specialty and seek out the power team at the relevant societies.”
Finally, he shared the importance of working health economics into clinical strategy. “You really need to understand the value of the technology to the therapeutic space. If your physicians can perform the procedure faster, capture that value in your technology and lay out a solid clinical plan.”
Stephanie Toney
Toney presented a case study based on her experience while she was at Thoratec, working with the Left Ventricular Assist Device (LVAD), a device that is surgically implanted in the heart and takes over the work of the left ventricle in a patient with advanced heart failure.
At the time Thoratec was “the only game in town,” so they kept raising the bar on themselves with improved clinical data that regularly changed the National Coverage Determination (NCD). Not only was the patient selection rigorous, but so was the facility criteria, policies that were determined individually by Medicare and private payers once they reviewed the clinical data.
Her overall takeaway was to reframe your perspective regarding how you think about key market access stakeholders, including not just payers, but also providers, patients and facilities—all of which come into play in a market access strategy.
“In addition to understanding the reimbursement basics, you also have to know how they interplay in an environment where there are misaligned stakeholders, which is a frequent occurrence,” she said. “Know and shift your perspective about different stakeholders because there’s a lot more going on with people than just your technology.”
Mark Topash
Topash shared a case study about his experience with iRhythm Technologies’ Zio service —a patch device enabling remote 14-day recording and analysis for diagnosing cardiac arrhythmias.
Once introduced, the business accelerated rapidly as the service was adopted quickly; cardiologists recognized the value of longer recordings and better data in treating patients. The initial reimbursement strategy was to use codes that existed for another system, Holter monitors. However, because Holters had a much shorter recording period, practitioners had to develop a workaround to use the code, which entailed billing for multiple units. This caused claims to be denied, presenting an insurmountable reimbursement challenge.
Creativity was needed. In order to keep sales momentum going, the company made the major strategic decision to become a provider, accepting the risk for billing and collections. That entailed multiple hurdles including educating the board and even the sales staff, many of whom were used to simply selling a device.
The key learning? “Just because a new technology fits into existing codes, that doesn’t mean it’s going to support the business,” Topash said, citing the need to constantly consider the best path, even one that’s unconventional.
Leslie Stephens
Stephens focused her talk on elements outside of coding, coverage and payment that can make or break you. As she stressed, “The right clinical data drives reimbursement. You need to think broadly about all sites of service, and how different clinical data is going to be needed for each.” That includes not only considering U.S. government payers and commercial payers, but also different geographies—like Europe and Asia—in the quest to become a global company.
She shared a best practice case from HeartFlow, a CT angiography (CTA) system that also uses software as a service for analysis, both of which need reimbursement support. “The team and organization did an incredible job developing clinical trials to support every aspect of that,” Stephens said, adding that while there was ample clinical data, they needed to focus on specific clinical data to change CTA guidelines and support the transition from Category III to Category I.
“When you start your regulatory strategy, start your reimbursement strategy, because otherwise, you can end up in a situation where two years after FDA approval, there’s no reimbursement because there’s no clinical data for payers.”
She underscored the importance of working with societies and key opinion leaders (KOLs). “Treat your societies like your customer. Find out their unmet needs and ask how you can help. Societies can be powerful, and if you do not think about who wins and loses with your device and come up with a plan to address those concerns, you can be absolutely stymied.” And she added, staffers matter too as they set the agenda.
This all takes time, of course, but it’s essential. “It may feel like a huge investment, but that’s not the case. If you are not successful in reimbursement, then you probably will not be successful as a company.”
Stephens wrapped up with encouragement that perfectly underscored the goal of the workshop: “There is always something to learn, and there are always people to learn it from. You do not have to make the same mistakes others have made. There are tons of people who are out there to help you.”