Product launch is not the time to start securing reimbursement for your device. Reimbursement remains a complex process for orthopaedic companies that could be lessened if properly aligned throughout commercialization. Mr. Hunter shares the who, what and when of reimbursement to ensure that you’ve received proper coverage prior to launch.

2. MCRA
Regulatory Reimbursement Clinical Quality Compliance
Plan for Success
Strategies to Align Reimbursement and Commercialization
Tim Hunter, Vice President
Health Economics, Reimbursement & Public Policy June 14, 2017
Confidential

3. Industry Corporate Others
Orthopedic Companies Law Firms Academic Centers
Technology Companies Private Equity Firms Contract Research Orgs
Emerging MedTech Venture Capital Surgeons
OEM Manufacturers Banks Sovereign Funds
Large Medical Device
Companies
Lenders
COMPANY OVERVIEW
• World-renowned neuro-musculoskeletal device and biologics consulting firm
– Founded in 2004
– 95+ employees & consultants
– 3 offices (Washington, DC | New York | Connecticut)
– Significant global expertise
– ~500 clients worldwide since inception, ~150 clients annually
• Integrated strategic consulting services; implementing & managing
– US & international regulatory
– Clinical Research Organization (CRO)
– Reimbursement (coding, coverage & payment)
– Manufacturing & quality system
– Surgeon and corporate ethics & compliance
– Due diligence
• Clients include:
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4. ConfidentialConfidential
OVERVIEW
4
Revenue Growth (% CAGR – 2022)
WWMkt.Share
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
3.0% 4.0% 5.0% 6.0% 7.0% 8.0%
In Vitro
Diagnostics (IVD)
$48.4B
Cardiology
$42.1B
Orthopedics
$41.0B
Diagnostic
Imaging
$38.9B
Ophthalmics
$24.9B
Neuro
$6.7BHealthcare IT
$7.8B
Endoscopy
$16.4B
Dental
$12.4B
General & Plastic
Surgery
$20.2B
Diabetes
$11.0B
Drug Delivery
$17.6B
General Hospital
$10.3B
Nephrology
$10.6B
Wound Management $12.4B
Sources: EvaluateMedTech World Preview 2016, Outlook to 2022 (October 2016).
Medical Technology Sportlight, www.SelectUSA.gov,
Top 15 Medical Device Markets
US Medical Device Market in 2017 Approximately $150 Billion

5. 5Confidential
Increasing Clinical Data Requirements
• More Studies (More Than 1 – Poolable Data)
• Longer Outcome Reporting (2 Years versus 5-7 Years)
Specificity of Clinical Data Endpoints
• Superiority versus Non-inferiority
• Pain versus Function versus Other
Coverage Requirements (Limiting the Number of Potential Cases)
• Limiting the Payor Exposure By Specifying Criteria
Changing Payment Methodologies
• Integrated Payments (Facility + Physician)
Reimbursement Challenges are Growing in the
Medical Device Sectors
REIMBURSEMENT CHALLENGES

6. Decisions Made During the Clinical Study and FDA Negotiation
Can and Do Impact Coverage
OVERVIEW
Payor Coverage and Reimbursement Evolution Requires a More
Integrated Reimbursement Strategy
Why It Is Important to Incorporate Reimbursement Early
Confidential 3
CommercializationClinical Study
– Protocol Development
– Data Collection
– Endpoint Analyses
– Label Negotiations
– Indication Language
– Contra-indications
– Postmarket Study
Requirements
FDA Approval
– Multiple Studies
– Longer Studies
– Superiority

7. Confidential 7
When Do You Want to Identify the Needs – Before a Study or After?
The Reimbursement Puzzle
REIMBURSEMENT CHALLENGES
Success/Failure of
Current Standard of
Care
Available Published
Clinical Evidence
Technology and
Procedure Cost
Comparative Outcomes
Clinical
Health Economic
Stakeholder Positions
and Statements
Specialty Societies
Tech Assessment
Companies
Presence or Absence of
Appropriate Coding
Procedure Coding
Technology Coding

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1) The Clinical Study is the Longest and Most
Expensive Investment a Company Will Make
2) The FDA Approval Language Sets the Stage
for Future Coverage
3) Code Development and Coverage Have
Clinical Data Requirements
4) Label Language Limits or Opens
Market Opportunities
5) The Wrong Choices Can Cause Lasting
Damage to Coverage and Payment
REIMBURSEMENT CHALLENGES
RegulatoryRegulatory Reimbursement
Compliance
Clinical
A PMA IDE Study Costs Millions of Dollars
A Reimbursement Review of a Clinical Study Protocol Costs Less Than $20,000
A Comprehensive Reimbursement Plan Costs Less Than $100,000
“We Can Wait on Reimbursement…”

9. Building an Evidence Base
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10. NEW CODING
COVERAGE FOR
NEW DEVICE
PAYMENT
FACILITY ADOPTION
• Procedure: Primarily a Formula
• Device: Based Upon Contract
• Requires Published Clinical Study Results
• Requires Physician Adoption and Advocacy
• Requires Health Economic Story
• Requires Published Clinical Study Results
• This Means Multiple Clinical Studies
• Requires Published Clinical Study Results
• Requires Health Economic Story
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BUILDING AN EVIDENCE BASE
As Early As Possible, Understand the Coverage and Reimbursement
Opportunities and Obstacles – And Plan for Them

11. • Understand the current
coverage environment
and its causes
• Identify health plan penetration
by state using available data to
match coverage environment
with potential commercial
rollout
Confidential 11
BUILDING AN EVIDENCE BASE
Understand the Current Coverage Environment and the Likely
Drivers for Future Coverage

12. • Identify Appropriate Coding Pathways to
Denote the Procedure:
• Is coding well-established?
• Are temporary (Category III) CPT Codes used?
• How do health plans treat particular codes?
• Identify Potential Obstacles for New Procedure
Code Development
• Is a new procedure code needed?
• What are the clinical data requirements for code creation?
• What specialty societies could drive development?
• Does the proposed product rollout help or hurt this process?
Know the Coding Environment for Your Technology
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BUILDING AN EVIDENCE BASE

13. • Identifying the Right Inputs
• Understand Payor Requirements
– Incorporate Targeted Outcomes
– Identify Control Impact
– Incorporate Previous HE Claims
– Know How Outcomes will be Used
Integrate Stakeholder Needs Into
Clinical Data Strategy
Preferred
Measures
Payor
Requirements
New Code
Needs
Early Planning and Integration Allows the Company to Design a
Clinical Study that Yields the Best “Reimbursement” Evidence
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BUILDING AN EVIDENCE BASE

14. The Importance of Early & Individualized Planning
No Proactive
Reimbursement
Planning
Clinical Trial Data Uses and Value
Dictated by Clinical Study Design
Payor
Requirements Preferred
Measures
New Code
Needs
Waiting to Incorporate Coverage and Reimbursement Limits
the Opportunities to Use Clinical Study Data Later
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BUILDING AN EVIDENCE BASE
Confidential

15. Collecting and Utilizing the
Right Clinical Data
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16. Collecting & Utilizing the Right Clinical Data
• Avoid Data Collection Traps
– Often Sponsors Collect the Same Clinical Data Out of Habit
• Blood Loss, Tourniquet Time
– Know Why it Should be Collected and How it Will Be Used
• Parallel Data Collection that Meets Reimbursement & Regulatory Purposes
– Optimize Value Creation
– Address all Stakeholder Needs
• Collection of Payment & Claims Information
– Prospective Collection of This Economic Data Increases the Value of
any Subsequent Health Economics Study to a Payor
• Ensure that a Comprehensive CTA Has Been Executed
– Use as Leverage for Later Data Collection Efforts
• Consider How Certain Outcome Data Interact
– Ex: Reduction in Pain May be a Useless Measure without Knowing
the Patient’s Functional Improvement
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DATA COLLECTION FOR REIMBURSEMENT

17. How to Utilize the Data: Health Economics Initiatives
• Health Economic Initiatives are of Increasing Importance in
Today’s Coverage & Reimbursement Environment:
– Cost of Care Analyses
– Database Reviews
– QALY Analyses
• Optimize Clinical Trial by Collecting the APPROPRIATE Claims
and Payment information
– Leverage Level I Clinical Data: Creation of Coding Solution, Future RVU Assignments
– Prospective Collection Key to Ensuring a Higher Power Study and Permits
Real-time Reporting
– Manage Data with Proprietary Database with Reporting Capabilities
– Market Intelligence: Who is Paying, How Much, Pathways
Remember that a comprehensive CTA will ensure that data can be collected
prospectively or retrospectively, and can act as leverage in obtaining claims data
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DATA COLLECTION FOR REIMBURSEMENT

18. • Health Plans Are Trying to Reduce/Eliminate Carve Out Provisions
– Payment Bundling De-incentivizes Facility Use of More Expensive Treatment Options
– Place the Financial Risk on Providers (Mostly Facilities)
• Clinical Evidence is a Must – and Not Just For Everyone Else
– Payors are Providing Guidance - What Evidence is Necessary for Coverage
– Facilities Increasingly are Requiring Data in Value Analysis Committee Review
• Health Economic Evidence is a Must
– Better / Cheaper
– True Measurable Benefits in a Changing Payment Environment
• The Clinical Data Collection is Critical
– The Right Data to Answer the Right Questions
– Clinical Data Collection without Reimbursement Integration Can Delay Product Use
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The New Environment Necessitates Early Reimbursement Planning
CONCLUSION