A reimbursement strategy answers the following questions:
- Who will pay for your product or service? (For example, will it be covered by health insurance?)
- How will you get paid?
- How much will you get paid?
It is important to understand that obtaining insurance reimbursement for your product or service is a separate, important hurdle from obtaining FDA approval.
What to Consider About Obtaining Reimbursement from Insurance
- Start early to get to know the major medical insurance companies and learn how to get reimbursed if your product is a medical device or treatment. This is especially critical if it will involve obtaining a new insurance code, which can be a long, challenging process. Even if you use an existing insurance code, you will need to understand the payers and their requirements.
- Understand the economic incentives and constraints of the users or prescribers and how they will get paid. Many products in medicine and biotechnology are business-to-business products rather than business-to-consumer. Address questions like these for medical products:
- Who will review your evidence for clinical and cost-effectiveness, and what data do they need?
- Who are the most relevant payers for the target population?
- Will the product get line item reimbursement or be bundled with something else?
- If covered by insurance, will deductibles or co-pays be a barrier for patients? If not covered, will patients be willing to pay?
The NIH’s Technical and Business Assistance (TABA) funding consulting services, available to those with a Phase II SBIR, offers reimbursement strategy and services as one of its four areas of consulting. Awardees can apply for up to $50,000.
Reimbursement Strategy Tips
From the start of your project, collect evidence to support reimbursement. Collect data on the variables needed for a cost-effectiveness analysis while doing your clinical trial. Don’t wait until you need the data later to convince payers.
Check whether incentives to purchase your product or service are aligned for the different stakeholders. For medical products, the incentives for payers, providers, and patients may be misaligned. For example, patients have to believe a treatment is safe and worth the side effects, payers have to be willing to pay for it, and providers have to view the evidence as strong and make it fit in their workflow.