Even if you think your device gets the patient out of high-cost care settings and offers a net cost savings, and thus justifies a higher price than the gold standard, the clinical evidence used to get through the FDA is often insufficient to sell to the Centers for Medicare & Medicaid Services.
Validated clinical evidence and outcomes are the most important thing to offer payers, and the body of data used to obtain FDA’s approval or clearance will not suffice most of the time. Avoiding a surprise reimbursement story, includes determining the value proposition of your customer, which includes both the insurer and the provider, both today and in times to come. FDA and CMS have different missions – CMS focuses on whether the product is reasonable and necessary while the FDA focuses on whether the product is safe and efficacious. One of the big questions CMS has to ask is whether outcomes are better with the new offering and whether the technology is otherwise an improvement over what is already available. CMS is unwilling to pay for expensive medical devices that seem to offer no advantages over the current state of the art.
One of the challenges for device makers trying to do business in the U.S. is that reimbursement is decentralized and involves a surprising number of payers in addition to the uncertainties tied to healthcare reform. Only about 10%-15% of all Medicare coverage decisions are reviewed by CMS, with the balance handled by local Medicare carriers.
It is critical for you to have documentation that a code is ready for the device and the associated procedure because doctors and hospital administrators will not buy your product without that code. Learn more about the reimbursement process by watching this video.
Conduct your reimbursement analysis using information gathered on the final solution concept under development and/or proxy devices. Be sure to understand the mechanics related codes (existing versus new); coverage decisions (Medicare, large commercial payers, and payers outside the U.S.); reimbursement levels; and the status of technology assessment in the given field. Identify critical gaps in codes, coverage, and reimbursement payments that should be addressed via a reimbursement strategy. Rank payers and technology assessment groups based on expected perception of your technology.
CTIP’s steering committee and advisory board include reimbursement experts that can help you develop a reimbursement strategy. CTIP can also host educational seminars and workshops on this topic. For more information, contact us at email@example.com or call 323.361.8368.
- Private Insurance Medical Policy Websites – Such as Regence, Wellmark, or Aetna.
- Medicare Site – Be sure to search for both local and national coverage decisions.
- Technology Assessment Sites – Be sure to identify all technology assessment reports generated by the Blue Cross/Blue Shield Technology Evaluation Center, NICE in the U.K., and other related technology assessment groups.
- Ingenix CPT Expert (Thomson Delmar Learning, 2005) – This book is the recognized standard for hospital coding. It contains all CPT codes categorized by organ systems. Since many codes could potentially be used for one procedure, it is helpful to review the filtered list of codes with someone familiar with the codes being assessed, such as a clinician or office practice manager. (link works for Stanford students and others with subscriptions)
- Treatment Research – 2.2. Treatment Options may include technology assessment data for the different treatment options.
- Device Manufacturer Websites – Companies such as Medtronic offer general reimbursement assistance on their website for certain practice areas (e.g., for cardiac rhythm management). Similar information can be found by searching other sites for major manufacturers. Guidelines are often provided by product or treatment area to help physicians choose the most appropriate code(s) for maximizing their reimbursement.
- Federal Register.
- HCPCS Physician Fee Schedule – Download the fee schedule from Medicare’s website.
- HCPCS Physician Fee Schedule Look Up – Multiply the RVU for the appropriate CPT code by the conversion factor to get the Medicare payment to the physician. If the procedure is performed in a facility setting, use the RVU listed under the fully implemented facility total. Otherwise, use the fully implemented non-facility total or use the resource below.
- Medicare Hospital Outpatient Prospective Payment System (OPPS) – Available online on the Medicare website. Search for the HCPCS code in the document, find its corresponding APC code, and then obtain the facility payment. [as of Apr 09 this is a Limited Data Set]
- Cost of Procedures Covered by APC and Number of Procedures Performed – This Excel file is available online. It displays median costs, by APC group, for services payable under the OPPS in calendar year 2007. The data are based on claims for hospital outpatient services provided January 1, 2005 through December 31, 2005.
- Ambulatory Surgical Center File – If the payment cannot be located in one of the outpatient files, then try the Ambulatory Surgical Center File and search by HCPCS code.
- Hospital DRG File – If reimbursement rate information still cannot be located, try these Hospital DRG files. Be sure to download the final version of the list of all DRGs. Using this file, identify the DRG and its “relative weight.” Next, this will need to be multiplied by a base payment rate that consists of a labor and nonlabor component. Access these files from the Medicare website under Acute Inpatient – Files for Download.
- HCUPnet– A free, online query system based on data from the Healthcare Cost and Utilization Project (HCUP). It provides access to health statistics and information on hospital stays (inpatient encounters) at the national, regional, and state levels.
- Medicare Part B Physician/Supplier Extract Summary File – This file summarizes the number of procedures, total submitted charges, and total payments by HCPCS code. The file can be ordered from the Center of Medicare and Medicaid Services.
- Other Databases – Verispan (now SDI) and National Patient Profile are subscription services that provide procedural data before HCUP releases it.
- National Patient Profile – A desktop-enabled database (i.e., on a CD) provided by Verispan. It is searchable by diagnosis or procedure codes (ICD-9 only) and includes information similar to that on HCUPnet, except that it is often more up-to-date and has an interesting feature to show the frequency of different ICD-9 diagnoses for each procedure.
- Verispan – A subscription service that provides access to data on the frequency of procedures carried out for patients who are diagnosed with specific conditions. The data is provided in such a way that in-depth customization and analysis can be performed.
- CPT Background and Categories of CPT Codes – The American Medical Association’s website summarizes requirements for new CPT codes.
- Requirements for Pass Through Payments – If the procedure will be performed as part of an inpatient hospital stay, then an application for a DRG add-on can be submitted—this is a supplemental sum to augment the standard DRG code when the new device is used. See CMS’s “Application for New Medical Services and Technologies Seeking to Qualify for Add-On Payments Under the Hospital Inpatient Prospective Payment System for Federal Fiscal Year 2009.”
- National Coverage Determination Requirements – Medicare’s website has documents on “Medicare Program; Revised Process for Making Medicare National Coverage Determinations” and on “Factors CMS Considers in Opening a National Coverage Determination.”