To Code or Not To Code
The Reimbursement Decision That Should Shape the Product Before It Shapes the Price
A reimbursement code can look like a finish line. It gives a product a recognizable place in the healthcare system, a unit that can be billed, and a concrete answer to the question of how money might move. For a digital health company, that clarity is seductive.
But a code is only one part of a commercial system. It does not automatically create coverage, payment, utilization, or a sustainable business. In some cases, pursuing a code is the right strategic move. In others, it consumes years of capital while a more practical route to market sits nearby.
It's not a matter of “How do we get a code?”
It's really, “What payment path best fits the product, the buyer, the evidence, and the economics?” That question belongs in product strategy long before a company finalizes its go-to-market plan.
Coding, coverage, and payment solve different problems
Traditional reimbursement is often described as a three-part system: coding, coverage, and payment. The pieces are connected, but they are not interchangeable.
A code identifies a service, product, procedure, diagnosis, or supply in a form the healthcare system can recognize. Coverage determines whether a payer will consider that item eligible under a benefit or policy. Payment determines how much money moves, to whom, and under what operational conditions. A company can succeed in one dimension and still fail commercially because the other two do not support adoption.
Founders frequently treat coding as proof of market access. In reality, coverage can remain narrow, payment can be inadequate, and provider workflow can make the product difficult to use. Even an existing code may be a poor fit if it fails to describe the product accurately, does not align with the intended site of care, or assigns the economics to a stakeholder with little incentive to adopt.
Codes also operate differently across settings. Physician services, hospital procedures, diagnoses, drugs, supplies, and durable medical equipment each have their own coding structures and governing processes. The first strategic task is therefore not filing an application. It is understanding where the product lives in care delivery and how money already moves through that setting.
Start with the operating model, not the application
Before pursuing a new code, a company should map the complete economic workflow. Who uses the product? Who orders it? Who performs the associated service? Who submits a claim? Who receives payment? Who bears the implementation cost? Who captures the clinical and financial benefit?
The answers often reveal misalignment. A payer may benefit from lower utilization while a provider absorbs additional labor. A patient may value convenience while an employer pays for the benefit. A hospital may generate revenue under one pathway but lose revenue if the product reduces admissions. A reimbursement strategy that ignores these incentives can be technically valid and commercially weak.
Product design can also determine whether a pathway is available. A digital component, hardware requirement, place-of-service rule, or documentation step may affect how a payer classifies the product. The webinar’s continuous glucose monitoring example illustrates the point: qualification under a durable medical equipment pathway depended partly on the inclusion of a receiver, even as smartphones became the practical user interface. The payment mechanism was not separate from the product configuration; it helped define it.
This is why reimbursement analysis should happen during product development. It can influence features, evidence plans, workflow, contracting, and pricing. Waiting until launch turns reimbursement into a constraint. Addressing it earlier makes it a design input.
A new code is a strategic investment, not a default milestone
A distinctive product with no applicable code may justify a new-code strategy. Yet the decision should be treated like any other major investment: against a timeline, probability of success, evidence burden, opportunity cost, and expected commercial return.
The webinar notes that a Category I CPT journey can take roughly three to five years, and some companies have pursued coding recognition for much longer. During that period, the organization must fund evidence development, policy engagement, applications, stakeholder education, and continued operations. A new code may ultimately expand access, but it rarely solves near-term revenue needs.
A useful pressure test includes five questions:
Does an existing code accurately describe the product or service?
Would a new code materially improve coverage or payment, rather than simply provide recognition?
Can the company fund the evidence and advocacy required over a multiyear period?
Does the code place revenue and workload with stakeholders who have a reason to adopt?
Is there a faster path that can generate revenue and evidence while the coding strategy develops?
If the answers are weak, the company may be solving the wrong problem. A code should unlock a valuable transaction, not become a trophy that validates the product.
Programmatic spend can be the better first market
Healthcare organizations buy solutions outside claims-based reimbursement every day. Health plans fund programs through medical management, quality, product, innovation, administrative, and customer-experience budgets. Employers purchase benefits that support recruitment, retention, productivity, and healthcare cost management. Consumers may pay directly for services that offer immediate, understandable value.
These routes are not second-tier alternatives. For many digital health products, they are the primary market. A maternal support company, nutrition platform, navigation service, or remote engagement tool may fit more naturally into a contracted program than into a unit-by-unit claim.
The doula example from the webinar shows why one universal reimbursement story is rarely sufficient. Payment can vary by state, payer, employer benefit design, and delivery model. The same underlying service might be offered directly to consumers, contracted through a network, included in an employer benefit, or purchased by a managed care organization. The winning strategy depends on the population, buyer objective, operational model, and available evidence.
Programmatic contracts can also create a bridge. An employer or payer partnership can produce utilization data, outcomes, member feedback, and implementation experience. That evidence may support later coverage work or a code application. Revenue and learning can advance together instead of waiting for formal reimbursement to arrive.
Evidence should follow the buyer’s decision
Evidence is valuable when it resolves a buyer’s uncertainty. A payer may need clinical outcomes, medical cost impact, utilization changes, health equity performance, or a defensible link to quality measures. A provider may need workflow efficiency and sufficient margin. An employer may care about engagement, productivity, retention, or a specific workforce need.
This changes how studies and pilots should be designed. The endpoint should not merely show that the technology works. It should show why the intended buyer can justify paying for it. That means identifying the decision-maker, economic perspective, relevant time horizon, and adoption barrier before choosing the evidence plan.
The same logic applies to pricing. A defensible price reflects the measurable value created for the buyer, the costs imposed on other stakeholders, the alternatives available, and the budget mechanism used. A code may establish a payment unit, but it does not establish a viable price by itself.
Choose the path that creates access, not just legitimacy
The best reimbursement strategy is the one that connects the product to a willing buyer, a usable workflow, and sustainable economics. Sometimes that will require a formal code.
Sometimes an existing code will work. Sometimes the strongest path will be a direct contract with a payer, employer, provider organization, or consumer.
The decision should follow a disciplined sequence. That is, rule out applicable existing mechanisms, test whether a new code changes the commercial outcome, estimate the evidence and time required, compare alternative funding paths, and select the route that creates the greatest strategic value for the least avoidable delay.
That approach reframes reimbursement from a late-stage administrative task into an early commercial design decision. It also prevents spending years trying to become billable when the more important goal is becoming buyable.
About the Speakers
Rebecca Lanquist
Director and Reimbursement Consultant at Horizon Reimbursement Consulting
Rebecca advises startups and mid-sized medical device companies on full-lifecycle reimbursement. Her work includes coding assessments and applications, evidence planning, payer engagement, launch tools, and post-launch execution. Connect with Rebecca on LinkedIn.
Demi Radeva, MSc
Founder and Chief Strategist at Akros Advisory
Demi has more than a decade of experience across Medicaid, Medicare, and Commercial health plans, including leadership roles at UnitedHealthcare and Optum. She now advises HealthTech companies on reimbursement, payer strategy, market access, and commercialization. Connect with Demi on LinkedIn.
Comments