Surveying the Reimbursement ‘Landscape’

Published: 2009-11-03 01:14:23
Author: Amir Inbar | Medical Device Link | October 2009

The purpose of this article is to demystify the reimbursement process by providing the eight critical steps required for the reimbursement of any medical device.

Step 1: Reimbursement Landscape Report

This step always reminds me of my 10th grade math teacher, who repeatedly asked us to organize the mathematical data in the problem we received before aiming to solve it. The same applies here. First, it is essential to clarify the reimbursement data that are relevant for your product.
It is essential to determine where your product will be used. The setting in which your product is used will affect the reimbursement mechanisms that apply. For example, the same treatment, provided to the same patient, may be subject to different coding systems, coverage policies, and payment methods when it is furnished at the hospital than when it is furnished at the physician’s office.

Here are the questions you need to answer about relevant reimbursement mechanisms:

• What types of coding systems may be used to identify your product? From the various types of coding systems (e.g., ICD, CPT or HCPCS in the United States, or OPS, EBM or GOÄ in Germany), it is important to verify the one that applies to your product.

• What are the relevant coverage policies, limitations, and guidelines? Will the use of your product be limited to a certain age group, to a certain facility, or to a specific indication, for example?

• What are the relevant payment methods that may be used for your product? You need to verify which of the various types of payment methods (e.g., MS-DRG, Physician Fee Schedule or DMEPOS fee schedule in the United States (NOTE: ARE INITIAL CAPS NEEDED FOR ‘PHYSICIAN’ AND ‘FEE SCHEDULE’?), or G-DRG, EBM, or GOÄ in Germany), will be relevant for your product.

You also need to examine the applicable reimbursement mechanisms. Are there any existing codes, coverage policies, and payment methods that could be utilized by your product? After identifying the relevant information, search for the specific codes, coverage policies and payment methods that may be used for the reimbursement.
The completion of the above steps allows for the development of an initial reimbursement strategy. In a nutshell, in case all the required reimbursement mechanisms (codes, coverage policies, payment methods) are available, there is no need to contact the reimbursement decision makers, or RDMs. The relevant decision makers are the healthcare providers and the patients.

Once your company has established the reimbursement landscape, then comes Step 2.

(NOTE: FIX STYLE PROBLEMS IN ALL CHARTS. CHANGE INITIAL CAPPED LETTERS TO LOWER CASE, PLACE END-STOP AFTER ‘HEALTHCARE PROVIDERS,’ ETC.)

Step 2: Sales Tools

In theory, since all the relevant reimbursement mechanisms for your product exist, immediately after receipt of FDA clearance or the CE mark, healthcare providers may bill for your product and obtain reimbursement. In order to convince them to do so, we typically develop the following documents:

• Value story. This document demonstrates the clinical and economic benefits of using your new product, compared with existing alternatives.

• Economic model. This document empirically supports the value story.

• Billing guide. This document helps your customers’ bill payers when using your device.

Naturally, some “evidence” in the form of clinical trials and published articles should be used to convince healthcare providers of your product’s clinical and economic benefits. However, the level of evidence required is much lower than the level needed to convince the RDMs.

In case all, or some, of the required reimbursement mechanisms are not available, RDMs must be persuaded, in addition to healthcare providers and the patients.

In this case, we turn to Step 3.

Step 3: Evidence Planning

If the reimbursement landscape report conducted in Step 1 shows that your company needs to develop specific codes, coverage policies, or payment methods for the new product, the company should prepare the following supporting evidence tools for the relevant decision makers, or RDMs.

• Value story. This is similar to the value story described under Step 2 above. However, this value story would be written from the perspective of the reimbursement decision makers, such as coding entities, payers, and payment committees.

• Economic model. This tool is similar to the economic model described under Step 2 above, but again, this economic model would be written from the perspective of the reimbursement decision makers. In addition, if required, this economic model will also identify specific additional outcome data that should be added to the clinical study protocol.

• Clinical study protocol. In order to verify that the planned clinical study could be used to derive the required “evidence” for the reimbursement process, we typically review and add reimbursement-related points to the clinical study protocol.

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