It is critical that medical technology companies seeking reimbursement for a device integrate their clinical, regulatory, reimbursement and marketing activities up front, according to Barb Peterson, president of Emerson Consultants (Minnetonka, Minnesota). "Design your clinical trials to incorporate both the needs of Medicare, FDA, payers, the providers, and the patients," Peterson urged during a Friday webcast hosted by Joanne Wuensch, a med-tech analyst with BMO Capital Markets (New York).

Emerson Consultants provides reimbursement, regulatory, clinical and market development consulting to device, biologic, and pharmaceutical companies. Peterson's presentation included an overview on reimbursement basics (including code, coverage, and payment), changes with the new administration (particularly how comparative effectiveness will impact companies), and competitive bidding.

As part of her overview on reimbursement basics, Peterson said a number of companies have been successful at getting what is called an add-on payment, either on an inpatient or outpatient basis, for new procedures when they are approved. To get such a payment, she says the company has to show substantial improvement over the current standard of care, the technology has to be new – as in two to three years post-FDA approval or clearance – and it has to meet a certain cost threshold.

Of the three areas of reimbursement that Peterson discussed, she said coverage is the most critical. To get coverage, she says, companies need to show the value of the new technology. In other words, it has to be scientifically sound, it should have U.S. peer-reviewed published data, and it has to offer an economic benefit, such as fewer complications, decreased number of future hospitalizations, and/or quicker recovery times.

Especially important to getting coverage, Peterson said, is patient selection criteria and whether or not the company has published data to support it.

"Many times people want to be able to use their technology for a broad range of patients," she said. "I will tell you payers tend to look at that and really focus in on what is the best patient population for this technology? What data do you have to substantiate that? Typically, it's not that broad-based, so I think the better way to get a positive coverage decision is to start out with a subset of patients where you have good data and build from that."

Peterson said payers often tell her company that they may make a coverage decision based on a specific subset of patients and later on they will look at the company's web site and see marketing material that reflects a very different subset of patients.

"Make sure those two pieces of information match because having marketing materials out there that don't correlate with published data makes payers nervous," she said.

Now that the new administration is in place, Peterson said the major healthcare-related themes emerging are science, value, and access. "[President Obama] is still looking at technology as something that we do great here in the U.S. and yet it needs to help us lower the cost," she said.

She noted that the popular buzzword these days is "comparative effectiveness." She quoted Jack Rowe, former CEO of Aetna, as saying, "None of us agree on what comparative effectiveness is, but we all agree it will cost about $5 billion to do it."

The government has set aside $1.1 billion in the American Recovery and Reinvestment Act of 2009 for comparative effectiveness research, Peterson said. She defined the term as "research evaluating and comparing the implications and outcomes of two or more healthcare strategies to address a particular medical condition," and said that, "truly what we're focusing on is comparing drugs, devices, and diagnostics."

Peterson's take-home message for companies concerned about comparative effectiveness research is that it is really not new or different. If a company is doing a randomized controlled trial with its new technology vs. the standard of care, that company is already doing comparative effectiveness research, she said.

"This is not new or different, but it's going to be looked at for more technology than it probably was in the past," she said.

Companies can use a variety of methods to do comparative effectiveness research, she noted, including prospective studies, retrospective studies with claims data, and modeling with cost data.

One of the big questions Emerson Consulting often is asked, Peterson said, is whether or not this comparative effectiveness thing will actually happen.

"It's very political, it's a hot topic, it's one of the key things the administration has said they're going to look at, [and] there has been a lot of money set aside for this research," Peterson said, adding that she thinks the focus is going to be around the evidence needs of stakeholders, including patients, payers, providers, and policymakers.

"It certainly seems that this is something that's going to continue to be something all companies are going to need to provide in order to get coverage and payment," she said.

Competitive bidding was another hot topic Peterson addressed during the webcast, and she noted that Congress mandated the competitive bidding program through the Medicare Modernization Act.

The bottom line with competitive bidding is simply, "Medicare will be putting out bids; the lowest bid will win; if you do not get the lowest bid than Medicare will not pay for these supplies," Peterson said. The deadlines and effective dates for competitive bidding have not yet been published.

Kicking off the question-and-answer period of the webcast, Wuensch told Peterson that competitive bidding seems to be an on-again off-again effort and asked, "What's different this year?"

"We have not seen a new date for when it's going to implement . . . we certainly expect to see something relatively soon . . . I do think this will move forward and it's just a matter of timing, but now that the new administration is in place we'll see something on that relatively soon," Peterson responded.

Another question focused on transcatheter heart valve procedures and how companies with those devices will go about getting reimbursement once they are approved in the U.S. Peterson said those devices would require new CPT codes (which are controlled by the American Medical Association) because the procedure is different from an open-heart surgery in many ways.

Peterson said payers are obviously already paying for the open procedure, but that "they're going to need to see the data to make sure it's safe for patients and that it makes sense to do the procedure via a catheter."