The healthcare reimbursement system currently operational in the US has become a cumbersome, at times nonsensical, mechanism for calculation of compensation to healthcare providers for services rendered. It’s known as “Coverage, Coding, and Payment”. It’s a process that has developed over more than 50 years and only with the implementation of the Patient Protection and Affordable Care Act (a.k.a. PPACA or Obamacare) has it even made a claim to attempt to control or reduce real costs. Prior to that the system was about establishing consistency in reporting, tracking diseases, entitlement provision, and claim adjudication.

Having worked in the business of healthcare for almost thirty years and participating in processes with the Center for Medicare & Medicaid Services (CMS) and the American Medical Association (AMA) during that time, I believe I have a good handle on how the various programs have evolved. Why is that important? Because, dear friends, reporting of healthcare services is generally based on the intention, not the actual provision. Payment for those services is largely a factor of cost and time, not effectiveness and efficiency. It matters.

Last week, TRG began a 3-Part series on building a successful field Reimbursement team. Part 1 focused on identification of key elements in the establishment of the team and structuring its leadership and management (https://www.linkedin.com/pulse/article/20141205162301-24726838-building-a-successful-reimbursement-team-part-1-of-3?trk=prof-post). Part 2 will focus on Goals & Deliverables of a successful field Reimbursement team. However, when more specific discussion is needed, I have provided names of recommended service providers for follow-up.

Goals and deliverables of the team will vary according to the classification of the type of product supported:

Pharmaceutical – Group I

• Regulatory Pathway* – CDER
• Coverage Pathway – Formulary
• Product Coding – Does Not Apply
• Service Coding – Does Not Apply

Biologic – Group II

• Regulatory Pathway – CBER
• Coverage Pathway – Medical Policy
• Product Coding – HCPCS
• Service Coding – CPT

Medical Device – Group II

• Regulatory Pathway – CDRH
• Coverage Pathway – Medical Policy
• Product Coding – HCPCS
• Service Coding – CPT

*For a complete FDA Organizational Overview, please see http://www.fda.gov/AboutFDA/CentersOffices/OrganizationCharts/ucm393155.htm.

In the discussion of Reimbursement Goals & Deliverables (G&D), its easy to see that Biologics and Medical Device needs are comparable, while Pharma G&D do not overlap. Manufacturers would do well to remember this when they’re staffing their Reimbursement team….or at least allow for time for cross-training. For regulatory assistance with a strong understanding of the impact to reimbursement elements, we recommend Marie Marlow and her group at M Squared Associates (www.msquaredassociates.com).

For both Groups, the Reimbursement Goals can be clearly stated and understood:

1. Coverage: Common, predictable insurance benefit for product and services related to product.
2. Coding: Recognized, specific coding for product, professional services related to product, and technical services related to the provision of product.
3. Payment: Level of payment to physician sufficient to support time and displaced service payment history; Level of payment to facility relative to the projected payment from Insurance Company.

It’s the deliverables part where many manufacturers lose their way. When TRG is working with a new client and helping to develop their plan, we spend a great deal of time educating the executive staff and corporate investors about the existing reimbursement processes and structures. It’s a process that needs to be respected because they need to be successfully navigated in order to achieve the Goals.

I’ve been on the receiving end of many discussions detailing the failures of the US healthcare system, why it doesn’t work, how its not incentivizing the desirable behavior, and frustration with patients’ lack of control and understanding over their own care. Generally speaking, these things are all true. Unfortunately, too many times the next part of the discussion is about how this manufacturer is going to blaze their own path to reimbursement and force understanding upon the various stakeholders that represent barriers to this manufacturer’s success.

If the product manages to hang on long enough, the new management will generally attempt new tactics. The Reimbursement processes have long memories. These decision-makers remember who has followed the rules, and which manufacturers were overly creative or intrusive in their efforts. Problematic or complicated re-starts weigh heavily on field Reimbursement teams. Do not be your own worst enemy. Hire the right person to run your Reimbursement program. Give that person the tools, resources, and latitude to execute your approved plan.

If the Reimbursement strategic and tactical plans are solid, field Reimbursement team is well developed, well run, and well…lucky, the Goals (Coverage, Coding, and Payment) may be achieved in about 5 years from launch. That’s the ideal. Anything under 10 years from launch is still deserving of a hearty handshake and a pat on the back. I’ve never seen all three Goals delivered in less than 5 years.

There are times when investors may require development of a Reimbursement Plan and projections of Reimbursement elements in advance of implementation or actual launch preparation needs. When this happens, I encourage contact with Maren Anderson, MDA consulting (www.mdaconsultinginc.com). MDA is also the perfect resource for smaller organizations looking to outsource coordination of their entire reimbursement program.

In working toward your Reimbursement Goals, manufacturers need to be able to measure progress and develop tactical initiatives. The Deliverables of a successful field Reimbursement team should include:

Group I –

1. Economic analysis supporting pricing values and structure.
2. Formulary placement, as measured by Covered Lives
3. Patient Access Programs to support day to day prescribing (www.inventivhealth.com does a good job with these programs in the area of Pharma, specifically).

Group II –

1. Coding assignment for product & tech services via CMS.
2. Coding assignment for related pro services via AMA.
3. Economic analysis supported pricing and mapping assignment.
4. Policy with targeted 50% of top 100 plans (see Judy Dean with Payer Strategies Group, ph. 352-678-3315). Measure Plans, not Covered Lives.
5. Support actual Sales events via variety of programs (detailed discussion with many elements, contact TRG to schedule a call, info@trgltd.com).
6. Maintain coding position(s) through various annual updates and rules. Participate in the process, when appropriate.
7. Maintain presence within the formal reimbursement processes for awareness of competition and prospective program changes.

If you’d like to discuss the content of this series in more detail, TRG (www.trgltd.com) can walk you through these considerations and help you flesh out your processes and specific needs. We will provide considerations for budget development and staff metrics in Part 3 of 3, next week.

This post was first featured on LinkedIn

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