Why can't devicemakers and insurers get along?

After a spinal stroke in 2007 robbed Rick Batty of his ability to use his arms and legs, the then 54-year-old agricultural salesman wasn't sure he'd ever walk again. Then he found ReWalk, a battery-powered exoskeleton that uses small motors at the knees and hips to help paraplegics stand up and walk.

Activated by the forward tilt of a user's upper body, ReWalk allows users to move their paralyzed legs in a step-like motion. About half the 260 devices currently in use are located in therapy centers, where the sessions are covered by many insurers as normal rehabilitation or gait training.

But to own a ReWalk for use at home and around town, there's less financial support. Only a handful of insurers cover the take-home version of the device, for which Marlborough, Mass.-based ReWalk charges $77,500.

Batty has so far paid for half of his ReWalk device, and the company is in discussions with his insurer about the remainder. The down payment allowed Batty to take his device home after he finished training in September at a Unity Point-Meriter therapy center in Madison, Wis.

“The sad thing is that most people who need this device won't be able to afford $77,500 to purchase it,” Batty said. “To me, every single person that has the qualifications to use this device should have access to it, because it will keep people out of hospitals.”

For patients who want to use newer, novel devices beyond clinical trials, affordability is often the central issue blocking access when insurers won't cover their purchase. Manufacturers that can't get widespread coverage for their products face the prospect of limited sales.

“Unless we make it practical for people to get this compensated, I don't think we're going to be able to build the market,” said ReWalk CEO Larry Jasinski.

Insurers say the hurdles they've erected for new medical device coverage are driven by the need to ensure payment decisions are based on adequate scientific evidence. But generating evidence through clinical trials can be a costly journey for devicemakers. Moreover, even if they have evidence in hand, they must often spend significant time and money educating hundreds of different insurers across the country about their product, many of whom have different standards for approval.

The heart of the conflict has been payers' skepticism about paying for new, often costly devices that haven't shown long-term benefits in clinical trials. While both sides in these disputes say they need a more efficient way to topple payment roadblocks, it still sounds like they're talking past each other.

Devicemakers are seeking early feedback from insurers in the kind of data they want to see in their clinical trials. Insurers say all they need to do is ask.

There are signs the dialogue is evolving to the point where the two sides are beginning to work together to increase transparency and generate better guidance in the earliest stages of the device development process. They're trying to take a page from the Food and Drug Administration and the CMS, which have organized a parallel process for devices that is intended to shorten the time between FDA safety-and-efficacy approval and CMS payment approval.

A recent JAMA viewpoint from FDA Administrator Dr. Robert Califf, acting CMS Administrator Andy Slavitt, and Dr. Rachel Sherman, deputy FDA commissioner for medical products and tobacco, acknowledged that differences in the agencies' processes have resulted in questions as to whether FDA approval or clearance for marketing will necessarily result in payer coverage. They say they're taking a stab at that problem through devicemaker outreach, improved data-sharing, collaboration with research groups and more cooperation between agencies, like the parallel review program.

“It is imperative that the U.S. regulatory groups bridge this gap between evidence that is generated through trials performed primarily to obtain marketing approval for drugs and high-risk devices and the optimal kinds of evidence needed to support the intended uses of these products in practice,” the officials wrote.

The government's parallel review process helped Cologuard, a DNA-based stool test for colon cancer that can be done at home, get a quick start in the marketplace. Over 144 million patients have plans that cover Cologuard, including those covered by Medicare, Cigna, CareFirst, Anthem and several other Blue Cross and Blue Shield plans. Cologuard is the first and only product to be approved by parallel review.

“It was critical for us, because otherwise we would have had to go through a multiyear process for FDA approval, stop everything, and run another clinical trial geared toward Medicare patients to get the evidence for Medicare coverage,” said Kevin Conroy, CEO of Madison, Wis.-based Exact Sciences Corp, which makes the test. “That could have added three to four years to the process. We're a small company—we can't afford that.”

The largest integrated health systems such as Kaiser Permanente and the Veterans Health Administration also have provided a path for devicemakers to generate faster payment acceptance. They have physician expertise and their own technology-assessment staffs, and new product approvals can lead to significant sales because of their size.

But devicemakers continue to complain about the broader insurance industry, claiming they're not getting adequate guidance. How much clinical trial evidence is enough? How large should the trials be? Many payers want longer studies on more patients.

“There are no rules, no guidelines from any of the insurance companies to say if you have this (result), this meets the checkbox,” said Jeffrey Dunn, CEO of SI-BONE, maker of iFuse, a titanium implant for treatment of lower back pain. “It's a very unclear system that we, as inventors and company builders trying to help these patients, have to work with.”

At least one effort is underway to offer providers more transparency into what payers are looking for in trial data. The Payer Communication Task Force includes the FDA-CMS parallel review along with a group of private payers and technology assessment organizations that have offered to give devicemakers input on clinical trial design and evidence before their FDA-focused trial begins. The group includes the Blue Cross and Blue Shield Association, Duke University's Evidence Synthesis Group, ECRI Institute, Humana, Kaiser Permanente, the National Institute for Health and Care Excellence and Intermountain Healthcare's SelectHealth.

“Use that contact to help design trials and what you intend to publish, because there often are parameters that we for sure—and probably other plans and technology assessment institutions—would like to see included in trials,” said Naomi Aronson, the BCBSA's executive director of clinical evaluation.

Working with large, integrated health systems can be the quickest path to wider acceptance. ReWalk won a major victory recently when the VA fully covered its exoskeleton for take-home use.

Unlike private payers and providers, the VA doesn't have to wait for CMS coverage codes before it will pay for a device. It has its own staff of researchers and subject experts for making coverage decisions.

“We don't have to have debates on whether something is going to be covered or not by someone's insurance” because the VA directly purchases devices for veterans, said Dr. Barry Goldstein, acting executive director of the VA's office for spinal cord injury and disorders. “We feel that our mission in this particular office is to restore as much function and quality of life as possible in a person's life.”

Kaiser Permanente, another provider-payer, has similar efficiencies, according to Dr. Jo Carol Hiatt, chair of the Oakland, Calif.-based system's National Product Council. The internal group selects the products and services that will be used by the system based on the medical evidence. It's still early for ReWalk, Hiatt said.

Hiatt says devicemakers don't need to travel across the country and wow her with a sales presentation—she just wants them to send her solid evidence for review. “The only thing they need to reach me is (evidence). I don't care about the reimbursement—the last thing I want to see is a sales and marketing person,” Hiatt said.

Most insurers, however, tend to wait for Medicare coverage (and codes) before paying for a new device. That can be problematic for devices aimed at younger populations. While ReWalk is in the process of seeking CMS coverage, its initial priority was working with the VA and workers' compensation insurers, where there's a clear-cut need among injured veterans and workers.

Yet Medicare coverage isn't a guarantee for wider coverage by insurers. SI-BONE's iFuse is covered by only eight of the 50 largest insurers even though it has received payment codes from eight Medicare regional contractors and 43 state Medicaid programs, Dunn said. Many devicemakers see approvals by regional Medicare contractors as a quicker route to sales since getting a national coverage decision from the CMS can take years.

But insurers don't have the same structure. Just because a big system like the VA or Kaiser has adopted a device doesn't mean other payers will sign on. Devicemakers are wasting their time traveling across the country trying to get into the offices of insurers and should instead focus on providing robust evidence, said Suzanne Belinson, executive director of the Blue Cross and Blue Shield Association's Center for Clinical Effectiveness. Office visits “are not valued by payers and not requested by payers.”

To do their part in being more transparent, the Blues recently launched EvidenceStreet, a subscription-based site where the association publishes device-evidence reviews created by Blues' technology evaluation professionals and used by plans making coverage decisions. Paid subscriptions are available to manufacturers and diagnostics firms, while medical societies and academic medical centers have free access but are encouraged to contribute to reviews.

There are currently more than 360 reviews on the site for drugs, devices and diagnostic tests. “The goal here is that if we can be very clear about the types of evidence we want to evaluate, then we can hopefully raise the level of evidence that's being generated by manufacturers and others in the marketplace,” Belinson said.