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The FDA software Pre-Cert program signals it’s time to reimburse digital health

When is the government going to reimburse new software and digital health products? Shouldn’t we also look at reimbursements to physicians that extend their reach to patients through digital innovations?  

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The Software Pre-Cert Pilot Program, recently announced by the U.S. Food and Drug Administration, shows that regulators are taking digital health innovations seriously. The program is aimed at building a new regulatory process for software used in the prevention, treatment, and diagnosis of medical conditions.

The government’s approach—which will be markedly different from how they regulate medical devices and new drugs—is one that makes sense. Many digital health company founders and investors are applauding this move by the FDA. We are among them.

Software plays a significant role in healthcare delivery today, but software is very different in design and execution than pharmaceuticals and medical devices. Digital health deserves a new, agile approach, and it looks like that is what the FDA intends.

A closer look

When regulators examine new drug candidates or medical devices, the regulatory road is long and arduous. Clinical trials are time-consuming and very expensive, and the FDA requires extensive data from every phase of the trial.

In those cases, regulators are looking at exactly how the drug or device performs, often in animals and then in humans. They want to see data that shows that not only will this new product do no harm, but will offer the clinical benefit that the companies claim.

With digital health, it will be different. Rather than rigorously testing software, the FDA will be looking closely at the company behind it. Regulators want to see that the developers of health software are adhering to the highest quality standards, and that the team is not cutting corners.

The pilot program, which will involve nine medical software companies, will help the FDA firm up its criteria for what represents the highest standards of quality among digital health companies.

This is an approach that makes sense. Software is updated constantly, so there is no way to build a regulatory framework that involves FDA scrutiny of each new update. Rather, the team behind the software will get the scrutiny.

What will it mean to be pre-certified?

Medical software and digital health companies that are pre-certified by the FDA will be able to reach the market without being held in regulatory limbo.

Some pre-certified companies will be able to submit basic information to the government before commercialization. Other companies—those offering lower-risk products—might be able to go to market without submitting any information at all. If the underlying software and the internal processes of the software developer look sound to regulators, they may take a very hands-off approach with many digital-health products.

Companies developing products and services that fit that description will need to keep the FDA updated on their products’ safety and effectiveness once they’re on the market, and provide updates if new uses are developed for the software.

This is good, because a great deal of medical software will already be improving care delivery and patient outcomes by the time their developers need to start worrying about FDA paperwork.

A step in the right direction

Technology often moves faster than public policy, and the FDA has been doing its best to keep up. The fact that the agency is building an entirely new and much more agile framework for medical software and digital health shows they understand the challenges and the benefits of these products.

Applying the same rules that exist for medical devices and pharmaceuticals would be an innovation killer.

The agency said in a formal statement that it is “tailoring” its regulatory approach for a new generation of products that are “revolutionary” in terms of clinical promise and user interface.

The digital health products coming out today will live up to that characterization.

How soon until we take the next step?

A realistic regulatory process for medical software and digital health products is a great step. It means patients, physicians, and administrators can benefit without having to wait months or years. But there is more we can do to realize the full potential of digital health.

Now that telemedicine, patient engagement systems, decision-support tools, personalized medicine, and other digital health innovations are proving that they can improve outcomes and reduce unnecessary medical costs, we should be talking about reimbursement for the use of these products.

After all, other pharmaceuticals and medical device interventions that work are paid for. When is the government going to reimburse new software and digital health products?  Furthermore, shouldn’t we be looking at reimbursements to physicians that extend their reach to patients through digital innovations?  

Our country’s healthcare system revolves not just around which technologies and treatments will best benefit human health—it’s also about the reimbursement physicians get from the use of technologies.

Without reimbursement, physicians and health systems will be slower to adopt digital health innovations that put more information into the hands of patients and care teams, reduce inefficiencies and—in some cases—save lives. We are pleased that the FDA will adopt an agile framework for approving medical software and digital health products, but it’s already time to start looking beyond that.

Will the right incentives to put these innovations to use come next?


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Todd Johnson

Todd Johnson, CEO of HealthLoop, has a long history in the healthcare technology space and is a serial entrepreneur committed to building innovative products that engage patients and connect them to their care team. Todd joined HealthLoop in 2012 as CEO to develop an automated way patients can check in with their providers. Under Todd’s direction the company is now implemented at over 40 health systems and physician practices including prestigious institutions like Cedars Sinai and UCSF.

Prior to joining HealthLoop, Todd was the founder and CEO of Salar, Inc – a Baltimore, MD based provider of acute care physician charge capture and documentation solution. Working with the nation’s leading medical centers and physicians, Todd grew Salar to a successful acquisition in 2011.

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