Report: US Reimbursement System Hinders Novel Diagnostics Development

The current US reimbursement system has slowed development and adoption of novel diagnostic devices, in turn impeding patient access to these devices as well as investments in research and design. A new report from medical technology consultancy Health Advances and the Biotechnology Industry Organization (BIO) ties greater utilization of novel diagnostics by health care providers to the advancement of personalized medicine for patients. Providers can differentiate individual patient characteristics, implement more personalized treatments and improve outcomes through the use of novel diagnostics, argues the report. The key challenge to wider use of these products, according to Health Advances and BIO, lies in the US’ current reimbursement system, which supports simpler diagnostic tools based on traditional industry practice. Coverage for novel diagnostics is not consistent across payers, provides little transparency and lacks efficiency, which in turn negatively affects coverage decisions and limits access. Inconsistent coding practices, furthermore, have attracted greater scrutiny from insurers. Reimbursement challenges also depress investment in further development of novel diagnostic products, further obstructing access to them. Lacking a clear idea of what level of evidence is necessary to obtain reimbursement for novel diagnostics, manufacturers are also faced with inefficient product development as well as rising R&D costs. The report suggests several short- and long-term avenues to reform the reimbursement process in order to improve development and uptake of novel diagnostics: developing more specific codes as well as economic study standards for these products in the near term, using evidence development and risk-sharing payment arrangements to cover these products in the midterm, and setting up a centralized entity for coverage and value assessment of novel diagnostics over the longer term.