Finish Line
By: N. Adam Brown, MD MBA and Steven Farmer, MD PhD
FDA approval isn’t the finish line. Reimbursement is the real test of endurance.
For decades, U.S. Food and Drug Administration (FDA) approval was treated as the defining milestone for medical devices and digital health technologies. Secure clearance and validate the science, and then commercialization would follow.
That framing no longer reflects reality.
Today, reimbursement — particularly Medicare reimbursement — is the real test of whether innovation survives in the U.S. health care system. FDA approval may open the door, but reimbursement determines whether a technology reaches patients, scales responsibly, and sustains itself over time.
For many innovators, the challenge is not regulatory science. It is navigating a reimbursement system that is complex by design, slow to change, and governed by statutory constraints that often predate the technologies now seeking coverage.
Reimbursement is not linear — and rarely fast
Too often, companies plan for reimbursement as if it were a straight path: approval, code, coverage, payment. In practice, Medicare reimbursement unfolds across five tightly linked and iterative steps: regulatory requirements, benefit category determination, coding, coverage, and payment.
These steps are frequently treated as sequential hurdles. They are not. Decisions made early, sometimes before a pivotal trial is even designed, can quietly determine whether reimbursement is possible years later.
Instead of unfolding in a linear fashion, the reimbursement journey is shaped by evolving evidence standards, policy interpretation, utilization concerns, and political realities. Timelines stretch from months to years, course corrections are common, and interim strategies are often required simply to stay afloat while formal processes unfold.
Medicare is a defined-benefit program — and that matters
One of the most misunderstood aspects of Medicare is that it is not an open benefits program. Medicare pays only for services that fit within defined statutory benefit categories, most of which were established decades ago.
Even strong clinical evidence does not guarantee coverage if a technology does not clearly align with an existing benefit category. The Centers for Medicare and Medicaid Services (CMS) can create new coverage pathways through national coverage determinations, but those processes are deliberate, formal, and slow — often taking years to resolve.
It is within this morass that many innovations encounter friction. Product design, site of service, and how a technology integrates into clinical workflows can determine whether Medicare can even consider payment. These reimbursement questions must be addressed early.
Regulatory strategy and reimbursement strategy are inseparable
A common mistake among innovators is treating regulatory success as independent from reimbursement success. In reality, the two are deeply intertwined.
Trial design, endpoints, comparator selection, and inclusion criteria all influence how payers evaluate evidence later. A study designed to satisfy FDA requirements may not generate the type of comparative, generalizable, or durable evidence Medicare expects for coverage decisions.
Evidence is necessary, but it is rarely sufficient on its own. Reimbursement outcomes are shaped by how that evidence fits into statutory frameworks, budget constraints, and clinical practice patterns.
Market understanding is essential
Equally important, and often overlooked, is a clear understanding of the market a technology is entering. Reimbursement decisions do not occur in a vacuum.
CMS and other payers consider how technologies will be used in real-world settings, how they may shift utilization, and how they interact with existing care pathways. Innovations that alter decision-making, enable earlier intervention, or move care to new settings can improve outcomes, but they can also introduce uncertainty around volume and spending.
Assuming that clinical value alone will drive adoption is a mistake. Value must be contextualized within the realities of provider behavior, payer incentives, workforce constraints, and competitive dynamics. Without that context, even well-supported reimbursement strategies can misfire.
Strategic communications shapes reimbursement and commercialization outcomes
The existence of these minefields is why strategic communications plays a critical, and underestimated, role. Reimbursement is a technical process that is shaped by narrative.
How a technology is described, which outcomes are emphasized, and who carries the message all influence perception among policymakers, payers, clinicians, and investors. Clear, consistent messaging that aligns clinical evidence with economic and operational realities builds credibility over time.
And do not confuse strategic communications with marketing. An innovator’s narrative must align stakeholders around why a technology matters, where it fits in care delivery, and how it responsibly changes practice. In a system where policy decisions are iterative and consensus-driven, clarity and credibility matter.
Coding is often the first real bottleneck
For many innovators, coding becomes the first visible reimbursement constraint. American Medical Association Current Procedural Terminology (CPT) pathways, including Category I, II, and III codes and PLA mechanisms, determine whether early payment is even possible.
Category I codes can facilitate reimbursement even when they imperfectly capture emerging technologies. Category III codes, by contrast, face intense scrutiny, particularly in their early years. Utilization projections, budget neutrality, and stakeholder input often matter as much as clinical enthusiasm.
Fallback “not otherwise specified” codes exist, but having a code does not imply positive coverage. Coding is both administrative and strategic.
Engagement is not optional
Successful reimbursement strategies rarely unfold in isolation. Engagement with specialty societies, clinical leaders, and formal coding and coverage processes matters.
These stakeholders influence how technologies are classified, how evidence is interpreted, and how new tools are integrated into clinical pathways. Early engagement helps align expectations and reduces the risk of misclassification or delayed adoption.
Innovations that disrupt existing workflows or revenue streams must address those implications directly. Avoiding those conversations does not make them disappear, it only delays them.
Evidence expectations extend well beyond approval
Medicare coverage decisions are anchored to the statutory standard that services must be “reasonable and necessary.” That phrase is intentionally vague. .
Instead, CMS relies on evolving guidance and precedent. Comparative effectiveness, durability of benefit, and applicability to real-world populations consistently shape outcomes. Short trial follow-up, narrow inclusion criteria, and limited representation of patients with comorbidities routinely undermine coverage arguments.
It is for this reason that post-market and coverage-linked studies are essential. Claims data, longitudinal outcomes, and real-world evidence collected over five to 10 years frequently determine whether early coverage decisions mature into durable reimbursement.
Reimbursement success requires foresight, not optimism
The lesson for healthcare innovators? You need both persistence and foresight.
The companies that succeed reimbursement plan early, design with benefit categories in mind, align evidence generation with payer expectations, and communicate clearly with stakeholders throughout the process. They recognize that reimbursement is not a single milestone, but a prolonged operational and policy challenge. At ABIG Health, we help innovators navigate the total product life cycle with reimbursement, market understanding, and strategic communications embedded from the start.
In the U.S. health care system, progress is not about moving fast in a straight line. It is about anticipating obstacles, aligning strategy with policy reality, and sustaining momentum long after FDA approval is achieved.
