“Device makers cannot currently enter into certain value-based partnerships because federal rules prevent them from providing any incentives unless they fall within safe harbor or a waiver,” Scott Whitaker, CEO of AdvaMed, told Forbes. AdvaMed is a trade group that represents Johnson & Johnson, Abbott Laboratories, Medtronic, Stryker and Baxter International, among other device companies.
Here are AvaMed’s three proposals:
1. A value-based pricing arrangement safe harbor to allow for price adjustments based on whether specified clinical and/or cost outcome targets were achieved.
2. A value-based warranties safe harbor to allow manufacturers to make clinical and/or cost outcome assurances and, “provide an appropriate remedy where such outcomes are not achieved,” according to the AdvaMed proposal.
“The outcome warranty would allow a manufacturer to share risk by providing a payment, item and/or complimentary or alternative service when a targeted clinical or economic outcome is not achieved.”
3. A value-based risk-sharing arrangement safe harbor, which allows for, “risk-sharing arrangements on outcomes-based terms among more diverse participants — such as payers, data aggregators and multiple device companies — in a framework that is independent of the sale of products reimbursed by a federal healthcare program,” AdvaMed said.
HSS is seeking input on rule changes related to value-based care payments.
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