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In medical care, reimbursement is the process of paying for healthcare services (office visit, labs/tests, imaging, procedures, etc.) after an encounter has taken place. This is a big difference between healthcare and other industries, because the provider is not paid until after rendering a service. After a physician or healthcare provider performs a procedure in a hospital or clinic as a treatment for a medical condition, they then send the bill to a payer. In a setting of many rules, the payer reimburses the physician, hospital/clinic or patient for all or part of the fee for providing the treatment. Payers include private insurance companies, self-funded health plans, and government entities, such as Medicare, Medicaid, and the Veteran’s Health Administration (VA).

As most people know, the process is not as simple as sending a bill and receiving payment. Payers collect and analyze data on patient outcomes and healthcare provider costs. They do not reimburse all procedures. Many procedures must have prior authorization to be considered for payment. Before payers will cover a new procedure or treatment, they generally require proof that the new treatment is superior or equal in efficacy compared to the current standard of care, is safe, and that it costs less in the short term or over a long period of time.

Before a healthcare provider, hospital, or clinic can send a bill to a payer, they must obtain a special code that describes the procedure (i.e., a procedure code). If the procedure is new, the company that developed the treatment must apply for the procedure code using a process established by the American Medical Association (AMA). This is not an easy, straight-forward process as the company must convince the medical specialists (the likely future providers of the procedure) that the new procedure is valuable to a specific patient population. This is usually done by gaining the support of medical societies, such as the American Urological Society or the American Society for Stereotactic and Functional Neurosurgery.

The International Classification of Diseases (ICD) codes capture diagnoses. Current Procedural Terminology (CPT) codes denote procedures and services. The provider enters both of these codes into computer software systems that submit claims electronically or on paper. The payers review the claims before rendering the reimbursement.

Most physicians welcome new and improved treatment methods; others are more conservative and cautious. They prefer waiting for new treatments to be proven over time, especially over the long term. Some new procedures create challenges with follow-up care and coordination of care between specialists. There are also challenges in deciding which patients are good candidates for new procedures. Furthermore, a urologist who primarily treats patients surgically might not like the idea of a new treatment that replaces the need for surgery. If there is an established pay structure for surgical procedures, a new therapy might be a threat to that income stream. This might be a reason to vote against society support for a new procedure code.

This is one example of why achieving medical reimbursement is a challenge. Another challenge lies in trying to understand how hospitals set prices and analyze their costs for procedures, which is unfortunately equally flawed. Hospitals derive payment based on fixed amounts for each hospital stay called diagnosis-related groups (DRGs). Hospitals that spend less than the DRG payment to treat a patient make a profit whereas those that spend more will lose money.


 Why Reimbursement Matters

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It matters for medical companies.
Many companies that work hard to receive approval from the US Food and Drug Administration (FDA) fail to consider reimbursement during the early stages of product development. If not pursued simultaneously, reimbursement is often not achieved until at least five years later. Procedure codes are also assigned long after FDA approval. Reimbursement outcomes differ for established, older companies versus those trying to enter the market. Few startup companies can afford to invest millions of dollars in developing a new treatment and then convince physicians to use it without compensation for several years until payers believe that it is valuable and worthy of reimbursement.

Read more for medical companies:

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It matters for healthcare providers.
Physicians aim to provide the best treatment option based on the disease and each individual patient’s circumstances. Having options is essential to this process. The treatment of choice should be based on what a physician and patient together decide is best, not on whether or not the physician receives payment or the patient can pay for it.

Read more for healthcare providers:

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It matters for patients.
When novel medical procedures are not reimbursed, patients are unlikely to have access to them. New treatments are simply unaffordable for some patients without their insurance paying for all or most of the procedure. Some creative patients have used crowd-sourced funding or petitioned their insurance company for approval, but this is not possible for everyone.

Read more for patients:

 

For Companies

Reimbursement Pricing 101: How Treatment Costs are Determined for Clinical Procedures in the US
Treatment costs are ultimately based on the amount charged for a procedure at each specific facility, but the process by which these costs are determined is not as straightforward as it seems.
READ MORE >


An Introduction to Medical Reimbursement Coding
The process of obtaining billing codes in the US for medical procedures such as focused ultrasound is complex. Different types of codes are needed to obtain reimbursement.
READ MORE >

Focused Ultrasound Reimbursement Landscape in the US
The reimbursement status for focused ultrasound-related procedures in the US varies among the different indications.
LEARN THE CURRENT STATUS >


Focused Ultrasound Reimbursement Landscape in Europe
Throughout Europe, the process of introducing and reimbursing for new therapies reflects the organization of each country’s healthcare system.
READ MORE >

Advice for Companies: What I Know Now That I Wish I Knew Then
By Mark Carol, MD
Dr. Mark Carol has spent 35 years in the medical technology industry. He shares valuable insights into a few of its common pitfalls.
READ MORE >


Foundation’s Partnerships Aim to Achieve Reimbursement
The Foundation has collaborated with leading advocacy organizations to help move the needle on reimbursement for novel therapies like focused ultrasound.
READ MORE >


FDA Pathways to Expedite Patient Access to Innovative Medical Device Therapies
Several new FDA pathways are addressing the significant gap between approval of a novel therapy and widespread reimbursement.
READ MORE >


CMS Releases Proposed Rule Eliminating Gap between FDA Approval and Medicare Coverage: Comments Welcome
The Centers for Medicare and Medicaid Services issued a draft rule that, if finalized, would allow four years of Medicare coverage upon FDA authorization of breakthrough devices.
READ MORE >


University of Virginia Masters Student Completes Capstone Project on Focused Ultrasound Reimbursement
LeAnn Golding, MA, a recent graduate from the University of Virginia’s Frank Batten School of Leadership and Public Policy, assessed the potential impact of various policy options on reimbursement delays.
READ MORE >


Professional Society Guidelines: Not to be Overlooked Along the Road to Commercial Success
An evidence-based medical system oftentimes relies on physician specialty society recommendations. What does this mean for trial design and data publication?
READ MORE >


Achieving the Triple Aim of Advances in Healthcare: The Role of Economic Data in Advocating for Reimbursement
Focused ultrasound has the potential to meet all requirements for a “Triple Aim,” as exemplified in the use cases of treating prostate cancer and essential tremor.
READ MORE >


How to Get Treatment Reimbursed
Insightec’s Vice President of Reimbursement, Dee Kolanek, provides an excellent overview of the complexities of the reimbursement ecosystem for disruptive medical technologies.
READ THE ARTICLE ON MEDCITY NEWS >


FUS Partners Advises on Reimbursement
One central goal of the Foundation’s newly expanded FUS Partners program is to help advise the focused ultrasound ecosystem on reimbursement issues and strategies.
READ MORE >

For Providers and Physicians

Provider Perspective: Dr. Stephen Scionti Discusses Achieving Reimbursement for Prostate Patients
Dr. Stephen Scionti treats hundreds of men a year with focused ultrasound. Here he discusses the successes and challenges he has experienced in his commitment to pursuing reimbursement for his patients.
READ MORE >

Reimbursement Pricing 101: How Treatment Costs are Determined for Clinical Procedures in the US
Treatment costs are ultimately based on the amount charged for a procedure at each specific facility, but the process by which these costs are determined is not as straightforward as it seems.
READ MORE >


An Introduction to Medical Reimbursement Coding
The process of obtaining billing codes in the US for medical procedures such as focused ultrasound is complex. Different types of codes are needed to obtain reimbursement.
READ MORE >

Focused Ultrasound Reimbursement Landscape in the US
The reimbursement status for focused ultrasound-related procedures in the US varies among the different indications.
LEARN THE CURRENT STATUS >


Focused Ultrasound Reimbursement Landscape in Europe
Throughout Europe, the process of introducing and reimbursing for new therapies reflects the organization of each country’s healthcare system.
READ MORE >

For Patients

What is Reimbursement?
In medical care, reimbursement is the process of paying for a procedure after the treatment has taken place. Payers include private insurance companies, self-funded health plans, and government entities, such as Medicare, Medicaid, and the Veteran’s Health Administration (VA).
LEARN MORE >


Reimbursement from the Patient Perspective: Challenges and Lessons Learned
When it comes to paying for innovative treatments, these two patients show that persistence pays off. Beverly crowd-funded her essential tremor treatment and raised $25,000. Perry advocated on behalf of her father for private insurance coverage.
SEE THEIR STORIES >


Provider Perspective: Dr. Stephen Scionti Discusses Achieving Reimbursement for Prostate Patients
Dr. Stephen Scionti treats hundreds of men a year with focused ultrasound. Here he discusses the successes and challenges he has experienced in his commitment to pursuing reimbursement for his patients.
READ MORE >





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