In recent years, performance-based risk sharing (PBRS) has become more and more important. Although most PBRS are used in expensive medical products, PBRS has also been used in medical equipment and diagnostic manufacturers. The device/diagnostic PBRS may be different from the medication for many reasons. First, although health insurance companies bear most of the burden of payment for drugs, equipment and diagnostic equipment are relatively more likely to be reimbursed by hospitals or health systems. Second, many devices and diagnoses do not have randomized controlled trial evidence to support their introduction, so there may be more uncertainty about the benefits of new devices and diagnoses. Third, the cost of equipment and diagnosis is usually lower than that of medicines.

What is the PBRS arrangement for medical device and diagnostic manufacturers?To answer this question, a recent paper by Chen and Carlson (2022) Use publicly available data on PBRS for these technologies. Specifically, the author’s approach is as follows:

We reviewed the publicly available PBRSA for diagnostics and equipment, using University of Washington Performance-Based Risk Sharing (PBRS) databaseWe have used PubMed, Google, and payer and industry websites to strengthen our review, including the top 15 medical device and diagnostic companies by revenue and the top 10 health insurance companies by market value.We further describe the arrangement based on our previously published taxonomy [Carlson 2010; Carlson 2014]Three main categories are used: (1) Evidence Development (CED) coverage, used for research only; (2) CED, used for research only; (3) Performance Linked Reimbursement (PLR).

Based on this method, the author found:

The review identified 52 performance-based arrangements that were initiated between 2001 and 2019. Among them, 23 items (44.2%) are CED, only for research; 17 (32.7%) are PLR; and 12 (23.1%) are CED, only research…

The use of PBRS has increased over time.

PBRS is most commonly used for cardiology equipment and oncology diagnosis. Most PBRS arrangements in oncology are used for diagnosis in precision medicine, such as classifier analysis, genomic analysis scoring, or epigenetic testing. Examples of these precision medicine oncology tests include ConfirmMDx epigenetic molecular testing, Prolaris, Decipher, and Oncotype DX prostate cancer testing. The insulin pump device is a product that is usually covered by the PBRS arrangement.

What is the difference between the use of PBRS by public entities and private entities?

Most arrangements are part of the CED arrangements of the Center for Medical Insurance and Medicaid Services (CMS) or CMS contractors… Of 52 arrangements, 34 (65.4%) are CEDs published on the CMS website, of which 20 ( 58.8%) is determined by the National Coverage Rate (NCD) of the CMS and the 14 (41.2%) Local Coverage Rate (LCD) of the medical insurance contractor Palmetto GBA. The rest of the arrangement (18, 34.6%) comes from the website of the private payer...

Of all arrangements, 5 (9.6%) were issued by private or commercial insurance companies, of which 4 were diabetes insulin pump devices manufactured by Medtronic and another was related to an arrangement with UnitedHealthcare to reimburse Genomic Health’s Oncotype DX test and data The collection plan is linked to women considering adjuvant breast cancer treatment. Finally, the arrangements used by hospitals (11, 21.2%) and integrated health systems (2, 3.8%) cover a wide range of medical device diseases.

Please note that because PBRS uses publicly available resources, the results of this study may be more inclined to find an increase in the public use of PBRS, as private entities may be reluctant to disclose the use of any particular PBRS arrangement. The results may also be biased towards finding more recent PBRS, as more information is available online for arrangements in recent years.

Despite these limitations, having a snapshot of the prospects for the continuous development of performance-based risk-sharing agreements between equipment and diagnostics is a very valuable contribution to the literature.