Turning Payers Into Payees

Reimbursement of neurotechnology devices has always been a significant issue for executives in our industry. But the matter has taken on added urgency and concern as the U.S. economy continues to struggle, as federal budgets in general and CMS funding in particular continue to be stretched thin, and as a new healthcare reform law takes effect.

Many of theses issues were discussed during an informative session on reimbursement that took place at the 2010 Neurotech Leaders Forum [see article, p7]. Session leader Tom Hughes offered attendees a detailed look at the impact of health care reform on device companies. Many questions remain unanswered, including whether delivery and payment reforms will reduce costs and how reform will impact the ability of manufacturers to develop and commercialize new technology.

By now, device companies have learned that the process of approaching CMS to obtain coverage for new technologies is excruciating. As Hughes pointed out, CMS’ goal in the reimbursement process seems to be to slow the entry of new products in order to control costs.

In our view, the only way out of this morass in the long term is for neurotech companies to take the initiative to reduce the government’s medical costs—and offer to put their money where their mouth is. If we believe our own hype, many of our new products not only offer superior therapies to existing treatments, they also promise to save payers considerable costs in the long term. We need to take that case directly to the American people, via media campaigns and patient and clinician education with specific examples of how new devices will produce black ink for the American taxpayer.

Instead of coming to CMS with hat in hand, medical device firms should offer to—in essence—write a check to the U.S. treasury in the form of savings compared to current expenditures. Under the concept of pay-for-performance, this should provide sufficient funds to finance many clinically and financially successful technology ventures.

It may be that new therapies will impact other medical specialties in a negative way—let the chips fall where they may. If new robotic neurorehabilitation systems reduce existing payments to physical therapists or if new retinal implants reduce expenditures on visual aids or caregivers, so be it. Let the recipients of these new therapies, with advice from their clinicians, be the ultimate judges.

This new paradigm in reimbursement would significantly alter the dynamics of coverage decisions. It would replace CMS’ motivation for delay with a new imperative to get proven cost-saving technologies into the system as soon as possible.

The prospect of changing our revenue models for neurotech devices is certainly daunting. But the price of maintaining the status quo is simply more than we can afford.

James Cavuoto
Editor and Publisher



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