For many medical device manufacturers, securing FDA approval is seen as the ultimate milestone. After all, regulatory approval means your device is safe and effective—an essential step in bringing innovative technology to market. But what happens next?
Far too often, companies celebrate FDA clearance or approval without realizing that a lack of CMS (Centers for Medicare & Medicaid Services) reimbursement can be the difference between commercial success and failure. Without proper reimbursement strategies, even the most groundbreaking devices may struggle to gain traction in the market.
The FDA vs. CMS: Two Different Worlds
While the FDA evaluates whether a device is safe and effective, CMS determines whether it is reasonable and necessary for Medicare beneficiaries. These are two completely separate processes, and an FDA-approved device is not automatically reimbursed by CMS.
The key differences:
- FDA Approval = Market access is legally possible.
- CMS Reimbursement = Market adoption is financially feasible.
Without a reimbursement pathway, hospitals, physicians, and outpatient facilities may have no way to get paid for using your device—making adoption unlikely.
The Consequences of a “Regulatory-Only” Mindset
Device manufacturers that focus only on FDA approval risk significant financial and commercial setbacks:
- Limited Market Adoption – If providers and payers don’t see a clear reimbursement pathway, they may be reluctant to adopt the technology.
- Lost Revenue Opportunities – A device without a defined reimbursement strategy may struggle to achieve broad sales, even with clinical superiority.
- Delayed ROI – Investors and stakeholders expect commercial traction post-approval. Without reimbursement, revenue growth slows, reducing valuation and funding opportunities.
The Solution: A Parallel Approach to FDA and Reimbursement
To avoid these pitfalls, medical device manufacturers must integrate reimbursement planning into their regulatory strategy early. Here’s how:
- Engage Payers Early – Understand what CMS and private insurers need to see for reimbursement. This often includes real-world evidence and health economic data beyond clinical trials.
- Develop a Coding & Payment Strategy – Does your device fit into an existing reimbursement category, or will you need a new CPT, HCPCS, or DRG code? If no clear pathway exists, anticipate delays.
- Conduct Health Economic Studies – Demonstrating cost-effectiveness and improved patient outcomes can strengthen your reimbursement case.
- Leverage Transitional Reimbursement Programs – Consider programs like New Technology Add-On Payments (NTAP) or Transitional Pass-Through (TPT) payments to secure short-term reimbursement while pursuing long-term coverage.
Conclusion: FDA Clearance Is Not Enough
Medical device manufacturers must shift their mindset—FDA approval is just the starting line, not the finish line. A proactive reimbursement strategy ensures that once your device is on the market, it is not just available but also accessible and financially viable.
At Market Access Experts, we specialize in helping medical device companies navigate the complex world of reimbursement strategy. If your company is focusing on FDA approval without a clear market access plan, let’s talk.