Reimbursement for Providers and their Organizations in the US

Why Reimbursement Matters

Physicians want to provide the very best care for their patients. Most healthcare providers work with their patients to decide the treatment option that is best for them, their disease, and their life circumstances. Having access to all effective treatment choices is essential to this process. Unfortunately, physicians are sometimes restricted in the treatment alternatives they can offer due to a lack of reimbursement.

The Basics of Reimbursement

The concept of “reimbursement” is multifaceted, encompassing several components, including coding, payment levels and coverage. All elements of reimbursement are predicated on regulatory approval. These concepts are described below.

Regulatory Approval
Before a medical procedure can be used on a day-to-day basis by physician, the technology underlying that procedure – in the case of focused ultrasound: the FUS device – must first obtain regulatory approval from the US Food and Drug Administration. Approval is based on clinical data demonstrating that the technology is safe and effective.

Coding
As practitioners and their support staff know well, there is no good mechanism for reimbursement of a procedure without a billing code; one that is matched appropriately to the correct diagnosis code.

Billing codes are assigned by either the Centers for Medicare and Medicaid Services (CMS) or the American Medical Association (AMA). Codes assigned by CMS are called HCPCS codes and are generally used to reimburse for equipment costs. Those assigned by the AMA are specifically referred to, and copyrighted, as CPT© codes. These codes encompass both the facility and physician components of payment. There is also a relevant subset of CPT codes, referred to as Category III codes.

There are some differences to note between these. HCPCS and Category III CPT codes cannot be used to bill for the physician component of a procedure; only the facility component.

Payment Levels
Once a code is designated for a procedure, the payment level assigned to that code must be established. This step is performed by CMS or private insurance companies (payors) and is based on the average of the internal costs incurred by all treatment centers in that country. Because of this, it is imperative that provider organizations of all size accurately report their true costs of performing a procedure when they submit their cost reports. Failure to do so fully and accurately can lead to a reduction in future reimbursement levels.

The establishment of a payment level does not actually guarantee that a treatment center will be reimbursed; it only determines how much they will be paid if coverage is granted.

Coverage
The final step in the reimbursement process is the granting of insurance coverage, known as ‘positive coverage determination’. This is the decision by the insurer – either government or private – about whether or not they will indeed reimburse treatment centers for a given procedure at the established payment level. Factors used when determining coverage include safety, efficacy, patient outcomes, utilization (how often the procedure is being performed) and cost-effectiveness. It is not unheard of for a procedure to successfully pass through the coding and payment level stages, only to be denied coverage.

What to Expect

It is critical to match the billing code with the appropriate diagnosis code. Not doing so will result in a delay or even rejection of the claim. As mentioned previously, it is also important to ensure that all costs incurred during a procedure are reflected in the cost report submitted to insurers. Otherwise, they will make future decisions about payment levels that are not based on the full financial burden to the facility of performing the procedure, and reimbursement rates will be diminished in the future.

When billing with HCPCS codes (e.g. C9734 for bone metastases) or Category III codes (e.g. 0398T for essential tremor or 0686T for Liver Metastases), you will need to submit a separate claim – likely using a surrogate code – for the physician component of a procedure, because these codes are only intended for the facility component. When using a CPT code (e.g. 55880 for prostate cancer), both components are embedded in the one code.

The Foundation’s Efforts

The Foundation uses its position as a trusted, independent, unbiased third party to forge collaborations with industry, researchers, clinicians, government, advocacy organizations, patients and other stakeholders, to break down barriers to regulatory approval and reimbursement for new clinical applications of focused ultrasound.

The Foundation establishes collaborations with key stakeholders in order to raise awareness of the barriers to reimbursement and to start to break down these barriers.

We are also partnering with industry representatives and clinicians to design and implement patient registries to track long-term treatment results that insurance carriers can use to evaluate the efficacy of focused ultrasound treatments.

Furthermore, the Foundation sponsors a CMS (OPPS) Reimbursement Education Program that is designed to help clinical treatment sites optimize their billings, in order to ensure appropriate reimbursement in the future.