Reimbursement Analysis

From Concept to Coverage
  • Robin Bostic


Establishing reimbursement early in product development is essential to the success of a medical device company. Although reimbursement is comprised of coverage, coding, and payment procedures, coverage is the essential first step that drives subsequent coding and payment procedures. After all, if a product is not covered by insurance plans, there can be no reimbursement. Coverage occurs when a product is deemed a “reasonable and necessary” medical treatment. It is widely reported that Medicare takes an average of 2 to 5 years to create coverage for a new product. Given that a new device’s product life cycle may be only 10 years, the earlier the process is initiated to obtain coverage, the sooner reimbursement will be established. Perhaps most importantly, this 2- to 5-years anticipated timeframe for coverage can be reduced if a reimbursement plan is implemented early in product development. When developing a reimbursement plan, companies should address the following questions, preferably while their product is still in the development phase:
  1. 1.

    Where will this product fit in the larger health care arena?

  2. 2.

    How will this product meet the Food and Drug Administration (FDA) “safe and effective” standards, as well as payors’ “reasonable and necessary” requirements?

  3. 3.

    How can the reimbursement strategy support the company’s overall objectives?



Medical Policy Medicare Population Coverage Decision Reimbursement Strategy Medicare Coverage 
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Copyright information

© Humana Press Inc., Totowa, NJ 2006

Authors and Affiliations

  • Robin Bostic
    • 1
  1. 1.Reimbursement AffairsThoratec CorporationPleasanton

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