When you develop a new medical device or remote patient monitoring service, inevitably in your launch planning you come to the question of which of the following must happen first:
Physicians must prescribe your new product or service and show market demand to get payors to cover it.
You must get payors to cover it (through a payor contract) so that physicians will prescribe it and patients will adopt it without having to take on full financial responsibility.
Payor contracting plays an essential role in the success of most innovations in the healthcare field. Yet, it is an arduous and highly complex process that doesn't stop at getting a single payor's contract. Companies introducing new medical devices and remote patient monitoring services must contract with multiple payors to maximize the number of patients who can benefit from the innovation. And each payor comes with its own contracting complexities and reimbursement schedules. Different payors will agree to pay different prices for the same device or monitoring service and have different contracting terms and requirements for reimbursement.
Below is a list of XIFIN-recommended practices for getting your foot in the door for gaining payor coverage for new medical devices and remote patient monitoring services.
Prepare, Prepare, Prepare
Before you start scheduling meetings with payors, one of the most important steps is to understand the value of your innovation to payors. For example, does your new device or monitoring service address a high-cost area or unmet patient need? Do you have the data to demonstrate this? If so, the payor is likely aware of the need and may even have your class or category of service defined as an investment priority. You’ll still need to understand the payor’s provider networks and approach to care, but prior acknowledgment of a gap in the market works to your advantage. If you are unable to demonstrate the unmet need using, for example claim data, you'll have more work to do to prove it with clinical- or other data, such as:
- Data Directly from Target Patient Population – partner with an existing patient community or start your own to gather relevant data to persuade payors of the unmet market need or high cost of the current servicing approach.
- Actuarial Data – work with an actuary to quantify the impact of your innovation on your target patient population using commercial claims data.
It can also be valuable to highlight integrations. Describe where your device or monitoring service plugs into the existing care model.
Get Your Foot in the Right Door
Just like executives in your own company, payor executives receive many calls and emails from solution providers trying to get their attention. Use your network to ensure you're targeting the right person at the payor. Ask for a warm introduction from a trusted source. Do your research. See if you are connected to anyone on the payor's strategic investment teams. Seek out target payor executives at conferences and industry events.
Nail Your Pitch
Once you're connected to the right person or people at the payor, make sure your pitch is a targeted strike. Your number one priority is to demonstrate the effectiveness of your innovative device or monitoring service in an average clinical or real-world environment. Be sure to tell your story with data. If you initially launched the product, service, or test as a cash pay, direct-to-consumer offering, share that data to validate the need, early outcomes, and that patients are paying out-of-pocket for your services.
Even if you're pitching to a regional insurance plan, you must cater to national employers. Your chances of getting a payor contract will increase if you've launched nationally. If you only live in a handful of states so far, you need a credible roadmap for quick expansion.
Make It Easy to Say “Yes”
Agreeing to use provider contracts will make things easier. This framework will require establishing a medical professional corporation (PC). Don't wait until contracting to negotiate rates; negotiate them early in the discussions. We advise against accepting Medicare rates by default. Aim for "CMS + XX%" (or even "CMS + XXX%). You may need to agree to a "starter agreement." Be strategic about the regions in which you accept lower rates. Value-oriented contracting can be enticing. Be careful to build towards it using data. As you expand payor coverage, you gain leverage. It is wise to select markets where you can secure high-density coverage with a modest number of plans.
Execute and Expand
In the execution phase, it's up to you to demonstrate clinical effectiveness, patient satisfaction, and operational effectiveness. Once again, keep it simple. For example, once you're successful in one region, a payor will likely introduce you to other contacts at the plan. Leverage your clients. Maintain robust reporting on clinical and financial outcomes to illustrate your results.
Once your clinical and financial outcomes are well documented, you're ready to continue to expand your payor coverage.
Throughout the patient journey, many hidden costs impact medical device and remote patient monitoring organizations. The first step toward improving the total cost to serve patients is bringing to light all these hidden costs.
Watch this on-demand webinar to learn how medical device and remote patient monitoring organizational leaders uncover and quantify these hidden costs and recommendations to reduce them.Watch Now