Healthcare providers have to consider what the Centers for Medicare & Medicaid Services (CMS) will reimburse them for when deciding to purchase new medical devices. To sell more products, device firms need to understand this reimbursement scheme, an expert said at a recent industry workshop.

Devicemakers need to think the way hospitals think, Judy Rosenbloom, president of consulting firm JR Associates, told attendees at an event sponsored by the Medical Device Manufacturers Association. "What is the rationale for hospitals to obtain new technology? To reduce costs and increase efficiency. Your challenge is to demonstrate you can help them do that." Device firms need to give healthcare providers "the right technology for the right procedure," she said.

When deciding whether to cover a particular technology, payers such as the CMS evaluate the impact on current treatment options, the anticipated use, the financial impact and potential risks associated with the product.

Payers also factor in certain budget challenges they face. Specifically, Medicare provides health insurance for 40 million elderly recipients and is constrained by federal balanced budget requirements; and Medicaid, serving 33 million low-income people, is funded by state appropriations and is constrained by budget neutrality and state budget deficits, Rosenbloom said. Device firms need to bear in mind that, with budget neutrality, when a new code is introduced other codes in the same area may lose payment.