Reimbursement for New Medical Devices
Coding | Coverage | Payment
Does it seem like you’re running into coverage, coding and/or payment hurdles at every turn? Time after time you have heard that “Your device is promising, but it is not covered because there is insufficient clinical evidence to support coverage”.
Bringing a new medical device and it associated procedure to market can be a daunting task. The key ingredient for success is to develop a reimbursement strategy to secure coding, coverage and payment for your medical device after FDA approval. This is the only way to keep your company viable and profitable. It is a fact that 85% of start-ups fail because most manufacturers lack the knowledge to develop a successful reimbursement strategy that will secure coverage from Medicare and private insurers. Without coverage your medical device will not be used clinically because no one gets paid! Hospitals and physicians may use your device, but Medicare and private payers set the rules through their coverage policies.
mdi Consultants is also going to provide an ongoing EDUCATIONAL PROGRAM for manufacturers to learn the principles of reimbursement. These E-mail Newsletters will be sent to former and future clients of mdi Consultants.
Medical Insurance Reimbursement Consulting Services
Public (Government) and Private Insurance in the US
Each year in the United States over 5 billion claims are filed for insurance payment. The vast majority of individuals treated by physicians or other qualified providers have some portion of their medical expense covered by government or private insurance. In order to process claims in a consistent and cost-effective manner, the government developed a universal coding system that is made up of two primary levels in the US.
Current Procedural Terminology (CPT Codes) and ICD-9 Codes
Level I Codes (Current Procedural Terminology)are medical services and procedures codes used by physicians filing for payment for services rendered. The CPT Codes are maintained and republished annually by the American Medical Association. ICD-9 codes are used in conjunction with CPT-Codes .ICD-9 Codes are diagnostic codes used by the physician to indicate treatment for a specific injury/disease. The CPT Code (services/treatment} must match the ICD-9 Code (specific disease or injury) for payment to be approved. CMS (Central Management Services) provides a strong consulting role with changes, new codes, etc.
Healthcare Common Procedural Coding System (HCPCS Codes)
Level II Codes-HCPCS Codes (Healthcare Common Procedural Coding System) are used by providers other than physicians to file for payment of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). Statistical Analysis Durable Medical Regional Carriers (SADMERC) has primary responsibility for assigning codes and maintaing the product classification list. SADMERC is under contract by CMS (Central Medical Services) to manage this portion of HCPCS. Over 4000 HCPCS Codes currently exists for Durable Medical Equipment and Supplies. To file for HCPCS codes the product must either have a 510k or a letter of exemption from the FDA.
Needs for Insurance Codes in the US Market
When marketing a product that qualifies for payment by Medicare, an insurance code must be obtained in order to qualify for payment. A significant portion of many of these products is Medicare or private insurance. Private insurers generally follow the lead of Medicare regarding codes used and payment schedule. For these reasons, most providers won’t carry products where the reimbursement path is not clear. Let mdi help you pick the best strategy for maximizing your provider payment/coverage opportunities with the appropriate codes.
Introducing Your Product to Private Insurers
Once mdi has helped you obtain the appropriate insurance codes, the next step in securing reimbursement is to introduce your new product to private insurers. In the U.S., virtually all private health insurance is now with managed care (HMOs and PPOs). Unless these managed care payers elect to cover a new medical device or procedure, reimbursement will be limited and profitability can be significantly curtailed. Let mdi help you introduce your new device or procedure to managed care. We can assist you in negotiating contractual agreements with HMOs and PPOs which assure a profitable level of reimbursement for your product.