VCs, acquirers, and bankers all ask one thing: does this company have a revenue machine, even before reimbursement catches up?
When investors evaluate a VC-backed medtech company, they are not simply assessing whether reimbursement will eventually arrive. They are evaluating whether the company has already built the infrastructure to achieve revenue during the coverage gap and to prove it with data. For growth equity investors sizing a follow-on round, strategic acquirers modeling a premium acquisition, and bankers structuring an IPO story, the commercial narrative hinges on three things: tangible patient access data, case-level proof that claims can get paid, and documented payer interaction insights that show a credible path to coverage.
FDA clearance or approval is simply the ticket to a much harder game: proving that real money can flow before the coding, coverage, and payment infrastructure fully catches up. The companies that understand this and build accordingly are the ones that reach the other side. The ones that don’t are the ones that run out of runway waiting for a coverage event that arrives on the payer’s schedule, not theirs.
The good news? It can be done – if you’ve built the right foundation.
The Reimbursement Gap Is Real and Predictable
Here’s the uncomfortable truth most medtech founders hear too late: FDA marketing authorization and payer coverage are completely distinct events, often separated by years. A novel device may win marketing authorization with compelling clinical data, yet still lack a CPT® code, a clear payment pathway, or a single positive coverage determination from a major payer.
Patient Access Programs: Bridging the Gap
Where medtech companies can often succeed is by creating Patient Access Programs (PAPs) to bridge the gap from launch to coverage. Every case touched by the PAP is a data point. Every denial appealed and overturned is proof that medical necessity can be demonstrated before a formal coverage policy exists. Every payer interaction is intelligence that narrows the timeline to a positive coverage determination.
Done right, a PAP answers the question every investor and acquirer is really asking: “If coverage isn’t there yet, how do cases actually get done and get paid?”
What a Patient Access Program Actually Does
A well-designed PAP operationalizes case-level reimbursement support across two critical functions:
Benefit Verification and Prior Authorization
Before a physician’s office submits a claim they’re not sure will get paid, they want to know what they’re walking into. Proactive benefit verification and PA support dramatically increase physician confidence in adopting a new technology. It reduces the friction that causes physicians to wait, not because they don’t believe in the product, but because they can’t afford unpaid claims.Internal Appeals and External Reviews
Denials are inevitable when coverage policy hasn’t caught up to clinical practice. The question is whether you treat them as dead ends or as data. A systematic appeals process – tracking denial reasons, win rates, and payer-specific patterns provides important information. Every overturned denial is proof that medical necessity can be demonstrated case by case. That data is essential to getting to positive coverage determinations
What Investors and Acquirers Are Actually Looking For
When a strategic acquirer or a growth equity investor evaluates a medtech company pre-coverage, they’re not betting on whether reimbursement will eventually arrive. They’re betting on whether your team has the operational sophistication to get through the valley. Across every deal structure, the diligence question is the same: can you show us the machine?
Here’s what that looks like in practice:
Paid claims. A company with 50 cases done and paid is infinitely more compelling than one with 50 letters of intent and a great payer strategy deck. Cases done are proof. Everything else is a plan.
Approval and denial data as evidence. A company that can walk an investor through its denial pattern, its appeals win rate, and what those findings mean is demonstrating operational maturity. This is the intelligence that separates companies with a plan from companies with a process.
A coverage timeline that’s evidence-based. “We expect coverage in 18 months” is a guess. “We have filed dossiers with these five payers, we have this feedback from their medical directors, we have this real-world information from our first 200 cases, and we have overturned a large percentage of denied claims” is a plan. Investors fund plans.
The gap between FDA marketing authorization and payer coverage is a feature of the medtech market, not a bug. The companies that understand it and build the commercial infrastructure to operate within it are the ones that reach the other side.
