US Reimbursement for Medical Device and IVDs – What Startups Should Know

Feb 10, 2023 | News |

US Reimbursement for Medical Device and IVDs - What Startups Should KnowReimbursement is a critical part of getting a medical device or in vitro diagnostic (IVD) to market. Reimbursement can impact your design, regulatory strategy, and financial returns on medical devices. Understanding the key components of reimbursement allows for a more streamlined process to market and must be considered early in the design process.

Reimbursement is defined as the process of a public or private third-party payers compensating a provider for the costs of a treatment. The third party can include Medicare, Medicaid and private insurance companies. Reimbursement may seem like an end goal; however, it should be considered early in the development process. A Startup medical device company should initiate reimbursement planning in parallel to developing the regulatory strategy. Considering financial return options early in the development process will influence the early lifecycle stages of a medical device to meet criteria for reimbursement. Reimbursement can make or break a device’s success.

Whether a device or IVD is reimbursable and at what amount can impact a provider's ability to use a device and a manufacturer's ability to commercialize that device. Having reimbursement opportunities can incentivize a healthcare provider’s willingness to use a treatment. If a device is not eligible for reimbursement, it will be challenging for the device manufacturer to determine if the device will provide sufficient financial returns. This leads to unpredictability and may create roadblocks when attempting to gain venture funding. Additionally, it keeps the new and innovative technology out of the hands of patients who could benefit from the technology.

Reimbursement Strategy Development – Utilize Resources

Reimbursement is made up of three distinct parts; coding, coverage and payment. Coding involves identifying the medical device, procedure, or service using Current Procedural Terminology (CPT) codes. Coverage is the criteria by which the service or device is paid for, and payment is the amount paid, which depends on the perceived clinical value, not the device's price tag. The reimbursement mechanisms in the US payor system is complex but there are a magnitude of accessible resources to help guide you to achieve payor coverage.

  • CPT Experts
    Understanding the reimbursement landscape for your device is essential in the development of a reimbursement strategy. Medical device companies should research the codes related to their device and work to convince medical providers to use their product over existing ones. If there is no code for the device, the company may have to work with CPT consultants to create a new code or make changes to the device to fit an existing code.
  • Key Opinion Leaders and Specialty Societies
    It is also important to be able to demonstrate the medical benefit of the device for reimbursement purposes. A clinical trial can provide the data required for evaluating the efficacy and safety of the product, as well as build support from key opinion leaders who can advocate for the clinical value of your device. Specialty medical societies are instrumental in guiding the CPT code system and can be a resource for startups in the CPT code application process.
  • FDA Payor Communication Task Force
    The FDA’s Center for Devices and Radiological Health established a task force to enable streamlined conversations between device manufacturers and payors such as CMS. The task force provides the opportunity for manufacturers to participate in the Early Payor Feedback Program. The goal of this program is to reduce the time between FDA clearance and payor coverage determinations so manufacturers can plan their device development accordingly hopefully expedite patient access. Medical device manufacturers can contact to request a payor organization join your Pre-Submission meeting.In addition to the Early Payor Feedback Program, FDA and CMS have another mechanism in place called the Parallel Review Program, through which both organizations simultaneously reviews clinical data and makes their approval decision and national coverage determination respectively within a close timeframe.

As a startup entering the reimbursement arena, you may face many obstacles. Starting the reimbursement determination process early and utilizing available resources is your best defense against potential barriers.

If your company is looking to bring your innovative technology to the market, providing access to the patients who could benefit from it, MEDIcept can help address your reimbursement plan and develop a coordinated and comprehensive commercialization strategy. Our reimbursement experts have more than 20 years of experience as senior managers in the medical device and services sectors and have provided reimbursement assistance to dozens of development-stage companies across the life sciences and medical technology spectrum.

For assistance with your reimbursement needs, visit or email us at

Calia Harakaly, Trevor Klemann, Danielle Short, Brian Siroka – Associate Medical Device Consultants