The Client’s Business Need

This case study shows how we identified multiple monetization pathways for a smartphone and tablet-based test. This study is also intended to demonstrate the company’s reimbursement planning should had begun three years, not one year, prior to product launch.

A German medical software company began preparation for the U.S. launch one year prior to the forecasted FDA 510K class II smartphone/table-based tests. The company’s software can transform the medical professional’s smart phone or tablet into a full suite of clinically accepted, gold-standard orthopedic rehabilitation assessment and monitoring tests which are performed following knee and hip replacement and ACL reconstruction. The initial focus is the U.S. orthopedic surgeon office market. The providers of interest are the surgeon and the physical therapist.

The company’s mobile digital test platform offers benefits to the surgeon and physical therapist relative to the current subjective and office-based rehab equipment testing methods. Those benefits are,

1. Real time comparative and systematic normative data analysis.

2. A mobile platform which facilitates conducting the tests in different sites of care. that is not only the surgeon’s office setting.

3. Electronic integration of the test results with the patient’s electronic medical record.

4. Faster test times without compromising specificity and sensitivity.

5. Lower test price.

The company client’s business need was for us to define and implement the U.S. monetization plan for their smart phone/ tablet based orthopedic rehab assessment and monitoring testing system. In addition, the company wanted us to integrate the monetization plan we designed for them into the ongoing product launch planning efforts. The company contacted us one year from U.S. launch date.

Our Approach

While the mobile test incorporated the gold standard rehab tests accepted by providers and payers, we were more concerned about coding and reimbursement amounts than coverage at this point. As a result we decided to conduct a comprehensive payer prioritization based on reimbursement amounts and the availability of alternative monetization pathways outside of traditional reimbursement pathways.

We believed alternative pathways were going to be important since launch was less than one year away. Alternative monetization pathways would had been less of a concern for us if the company reached out at least three years prior to launch.

The Results

The screening criteria and stratification noted above determined Medicare was a payer of interest. Medicare had in place traditional reimbursement mechanisms and an alternative monetization pathway. While the Medicare reimbursement amount was lower relative to other payers, the value of Medicare’s alternative payment pathway was paramount.

Reimbursement for the surgeon and physical therapist (the healthcare providers) using the mobile-based test could be possible under the Medicare’s current reimbursement mechanisms and policies. However, we believed Medicare would soon eventually deny the providers’ claims for the mobile-based tests because of the material cost differential between the mobile-based and the office-based tests.

This reason for denial was not to be the case for the alternative Medicare monetization pathway we identified because its payout mechanisms and rules are different from traditional Medicare reimbursement.

As a result, the alternative monetization pathway became more important than traditional reimbursement in supporting the company’s short to mid-term U.S. commercialization efforts. It would be the company’s primary surgeon and physician therapist Medicare payment mechanism while concurrent efforts were underway by Rowinski Group to secure new coding and revised reimbursement amounts.

The key takeaway from this case study is the work described above should have started at least three-four years prior to launch. Doing so gives a company the time to establish relationships with the US health insurance payers, physician societies like the American Medical Association and the American Academy of Orthopedic Surgeons prior to applying for codes and collecting the evidence needed to help justify to Medicare the basis for a NEW Medicare reimbursement amount for the surgeon and physical therapist.