Regulation, coverage, and reimbursement of medical technologies

Two major barriers to the introduction and diffusion of medical devices exist. First, devices must be cleared for marketing by The United States Food and Drug Administration, as mandated by the Medical Device Amendments of 1976. Second, third party payers are now making explicit determinations about whether or not to cover the specific applications of medical devices and about appropriate levels of reimbursement. This paper illustrates these processes which are based upon the evaluation of the safety and effectiveness of medical devices and examines the implications of the processes for the innovation and availability of such technology.