5 Tips for Understanding Payer Evidence Requirements

FDA approval, or clearance, is not the last step in getting a medical device or other life science technology on the market. It is just a step. Innovators that focus solely on these steps without looking at the hurdles ahead are on a path to trouble. Payer acceptance can make or break the long-term viability of a product and even a company. Having an idea of what the payers may look for, before you commit to a course that may be hard to reverse, will save you a mountain of time and money. Every product has a different path, so there is no substitution for working with an experienced reimbursement consulting firm like Argenta Advisors, but the following tips will help you understand the road ahead.

1. FDA Evidence Requirements Differ from Payer Evidence Requirements

A medical device entering the market through a pre-market approval must show safety and efficacy to the FDA through clinical trials to gain approval. A device seeking 510(k)clearance must be able to presume efficacy from a predicate device and then show safety in clinical trials. However, to receive coverage from a commercial payer, a product must demonstrate medical necessity. Medical necessity is a term of art that is usually defined in a member contract or a handbook and usually contains criteria such as the following:

• The technology must have final approval from the appropriate governmental regulatory bodies;
• The scientific evidence must permit conclusions concerning the effect of the technology on health outcomes;
• The technology must improve net health outcomes;
• The technology must be as beneficial as any established alternatives; and
• The improvement must be attainable outside the investigational settings.

2. Evidence Requirements Differ from Payer to Payer.

Different payers have different evidence requirements for covering or creating a policy for a new technology. The different evidence standards are often driven by economic forces and the resource limitations of the payer. For example, large regional payers have well-developed technology evaluation committees that have the time and resources to make independent evaluations of clinical studies. They often reach out to specialty societies and consider additional factors related to a technology when making policy decisions. Smaller local payers often have resource limitations that force them to rely on information aggregation services and third-party technology evaluation services.

3. Your Product’s Therapeutic Area Can Change Its Evidence Requirement.

Even though a plan may have published criteria for medical necessity, the strength of the lens that is applied to determine whether the medical necessity criteria are met varies based upon population size, unmet clinical need, riskiness, and capacity for saving lives. Products that focus on unmet clinical need and a well-defined population often face fewer roadblocks.

4. Economics Data May Change Your Evidence Requirement.

Cost and value matter. Payer medical directors are the stewards of a limited set of resources for providing for the care and well-being of their members, and they are concerned with attempting to do the most good with the amount of money budgeted for them by their plan actuaries. They face challenging economics that make it difficult for them to cover every technology. Overly aggressive pricing can exacerbate an evidence or utilization barrier.

5. When Breaking into a Crowded Space, Evidence Must Show at Least Two Elements of “Better, Cheaper, or Faster.”

It is not a guarantee that your product will receive coverage and payment with a certain level of evidence just because a similar technology received coverage and payment with that same level of evidence. If your product is competing against a gold standard, you will need the ability to differentiate it, or you could be expected to create a head-to-head comparative study against the applicable gold-standard technology. If your product costs more money than an equivalent that is already on the market, you will need to show that it provides a better net health outcome than the equivalent. Manufacturers that leverage data showing real-world net positive health outcomes have an advantage over technologies that have demonstrated only a narrow band of effectiveness of a single symptom or biomarker in a purely clinical trial setting.

Conclusion

Payer data differs from FDA data. Manufacturers must remember the physicians and the policy teams that are writing policy for the payers—they are the final audience for your data. Most are healthcare professionals that see themselves as the custodians of a limited amount of resources. They care very much about the quality of care that their members receive. Manufacturers need to look for opportunities to demonstrate, with peer-reviewed data, the information they want in the evaluation criteria. Manufacturers need to develop a good payer story or value dossier based upon objective data.

At the end of the day, if you manufacture a great technology and have thoughtfully collected strong supporting clinical data, physicians will want to order it, patients will want to use it, and medical directors will want to provide both coverage and payment for it.

Learn to be more successful by learning how to improve your payer story and value dossier - t alk to Argenta Advisors today.