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Changing Regulatory and Reimbursement Scenario for Medical Devices in the US Market

US medical device reimbursement market: Recent government legislation having an impact on industry

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2014-02-19 14:57:01 - Changing Regulatory and Reimbursement Scenario for Medical Devices in the US Market - a new market research report on

Healthcare reform legislation in the US has had major implications for companies and providers in the countrys medical device market. In March 2010, the US enacted the Patient Protection and Affordable Care Act (PPACA) (2010) and the Healthcare and Education Reconciliation Act (2010), both of which have had a significant impact on manufacturers, physicians and hospitals.

The Healthcare and Education Reconciliation Act (2010) changed the device tax to a flat sales or excise tax of 2.3% on all devices regulated by the Food and Drug Administration (FDA), which exempts hearing aids, contact lenses, eyeglasses, and other products sold directly to the consumer at retail level. In March 2013, the Senate voted 79-20 in favor of repealing this tax proposal. If reversed,



it will prevent a negative impact on US medical device manufacturers.

From 2011, PPACA has adopted 75% equipment utilization rate for diagnostic imaging equipment priced above $1m, such as Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) system. Before 2011, the equipment utilization rate for these systems was estimated to be 50%, but the revised rate requires healthcare providers to examine the utilization of existing diagnostic and imaging systems for effectiveness before acquiring a new machine. As the Centers for Medicare and Medicaid Services (CMS) reimburses per procedure and not per device, the new assumption will help CMS to cut diagnostic procedure reimbursement per single examination.

CMS global reimbursement for diagnostic imaging procedures comprises a professional component and a technical component. The professional component covers the physician fee while the technical component covers the equipment and staffing cost. According to the aforementioned proposal, CMS will cut the technical component payment by 50% for sequential diagnostic imaging procedures performed for contiguous body parts which can be examined in a single procedure.

In 2012, CMS dropped Medicare coverage for Transcutaneous Electrical Nerve Stimulation (TENS). However, as of 2013, coverage has been approved for patients who have been suffering from chronic lower back pain for three months or longer. The coverage is limited to patients enrolled in clinical studies for treatment. This reform will result in patients taking more medication and undergoing more procedures and surgeries.

The US Transcatheter Heart Valves Market is Forecast to Witness High Growth Between 2012 and 2019 due to Favorable Reimbursement

The changing reimbursement scenario for transcatheter heart valves is expected to favor the growth of the market in the US. Coverage for Transcatheter Aortic Valve Replacement (TAVR) was initially approved for use only in patients with severe aortic stenosis who were deemed inoperable. However, as of June 13, 2012, the FDA has expanded TAVR to include high-risk patients with severe aortic stenosis who are deemed suitable for surgery.

According to internal databases, the market will increase from revenues of $238.4m in 2012 to $3.1 billion by 2019 at a CAGR of 45%.

Strong Reimbursement Framework is Expected to Drive the US Endoscopy Device Market

The availability of reimbursement for Colorectal Cancer (CRC) screening and capsule endoscopy is expected to drive the US endoscopy market. Globally, CRC is the most common type of cancer in both men and women. The risk of mortality can be significantly reduced by early diagnosis and intervention. Between 2000 and 2010, colonoscopy procedures reduced the mortality risk by 77% (Brenner et al., 2011). However, high procedural costs impeded the adoption of colonoscopy screening despite the advantages.

However, the PPACA, which came into effect on January 1, 2011, includes measures to encourage patients to undergo colonoscopy screening through full reimbursement. The act also waives co-payments and deductibles for patients.

Colonoscopy procedures not only detect precancerous lesions but also remove them, reducing the risk of mortality by 50%. However, due to expensive screening procedures, 38% of adults of age 50 and above have not undergone CRC screening. Under Medicare rules, patients are required to pay co-insurance if a lesion is detected during screening. However, the Removing Barriers to Colorectal Cancer Screening Act of 2012 has eliminated financial disincentives such as co-insurance to make CRC screening affordable for the wider population. Under this act, patients do not have to pay any co-insurance associated with colonoscopies, irrespective of the detection of a lesion or a polyp.

The availability of reimbursement for screening procedures using capsule endoscopy is also a major factor driving adoption. Capsule endoscopy was initially covered for Obscure Gastrointestinal Bleeding (OGIB), but was later extended to multiple indications including Crohns disease and small-bowel tumors. Major products used in capsule endoscopy procedures are reimbursed by the government and third-party payers.

Report Overview

This report looks at the regulatory landscape and reimbursement scenario in the US for four medical device markets: cardiovascular devices, neurostimulation devices, diagnostic imaging devices and endoscopy devices.

The report provides comprehensive information on establishment registration, medical device listing, Premarket Notification (510k) or Premarket Approval (PMA), Investigational Device Exemption (IDE) for clinical studies, Quality System (QS) regulation, labeling requirements, and Medical Device Reporting (MDR). The report also reviews the reimbursement scenario in these medical device markets. It is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GBI Researchs team of industry experts.


- The report analyzes the regulatory and reimbursement scenario for medical devices in the US.
- Information on the regulatory landscape in the US: establishment registration, medical device listing, Premarket Notification (510k) or PMA, IDE for clinical studies, QS regulation, labeling requirements, and MDR.
- Information on reimbursement coverage in the US for cardiovascular devices, neurostimulation devices, diagnostic imaging devices and endoscopy devices.
- Annualized market revenue data, forecast to 2018, for the transcatheter heart valves market, left ventricular assist devices market and endoscopy devices market.
- Qualitative analysis of key trends in the US regulatory and reimbursement landscape.

Reasons to buy

- Develop business strategies by understanding the reimbursement trends in the US medical devices market.
- Design and enhance your product development, marketing, and sales strategies.
- Develop market-entry and market expansion strategies.
- Identify, understand and capitalize on the next big thing in the US medical devices market landscape.
- Make more informed business decisions from the insightful and in-depth analysis of the US medical devices market and the factors shaping it.

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