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.
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.
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.
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.
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.
A key aim of the Foundation’s Regulatory Affairs Program is to facilitate dialog with US Food and Drug Administration (FDA) officials—both scientific and clinical regulatory staff—and provide them with information to contribute to the advancement of focused ultrasound clinical studies and also to facilitate development of technical standards for focused ultrasound treatments. The Foundation also supports researchers in developing clinical study protocols that adhere to FDA standards and/or connecting them with regulatory experts for appropriate guidance.
The collaborative relationship between the Foundation and FDA has helped to contribute to the advancement of focused ultrasound therapy. A major milestone was achieved in 2011 when the FDA for the first time officially recognized the field of focused ultrasound and its potential as “a leading-edge technology to perform surgery without incisions,” and as a way to “reduce the number of invasive surgeries that patients need.”
Currently, there is limited reimbursement for focused ultrasound therapy. Until government and private payers are willing to cover focused ultrasound therapy, patients will not have widespread and equitable access to this noninvasive treatment alternative.
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.
The Foundation encourages all companies and researchers to consider reimbursement when designing new clinical trials; when appropriate the Foundation will advise or offer feedback on the study design. It is critical to ensure that the clinical trial design will not only demonstrate safety and efficacy, but also will meet insurers’ requirements for superior long-term benefits, quality of life, and cost-effectiveness.
The Foundation has been fortunate to collaborate with leading advocacy organizations including the Medical Imaging & Technology Alliance (MITA) and the Advanced Medical Technology Association (AdvaMed) who have the expertise and relationships to help move the needle on reimbursement for novel medical device therapies like focused ultrasound. Through these partnerships we raise awareness of focused ultrasound therapy among policymakers, payers, and medical specialty societies and drive policies to reduce barriers to commercialization and patient access.
Learn more about our advocacy efforts >
See a white paper from our March 2020 Reimbursement Workshop >
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.