Reimbursement Overview
Edit on GitHubOverview of Reimbursement Process
The reimbursement process follows three important criterion: billing code, coverage, and payment. After a medical encounter, the provider identifies the appropriate billing codes and submit it in a claim to the payer for evaluation. Once the payer receives the claim, it must evaluate whether the service have appropriate coverage. If the coverage is allowed, the billing codes is translated to a specified payment to the provider and physician.
The types of the billing codes and payment policy also depends on a wide variety of factors, most notably by where the medical encounters happened (i.e. inpatient vs outpatient) and whether the payment is for a procedure, physician services, or facility fee.
| Provider | Setting | Diagnosis Code | Procedural Code | Payment |
|---|---|---|---|---|
| Hospital | Inpatient | ICD-10-CM | ICD-10-PCS | MS-DRG for hospital stay + MPFS for physicians |
| Hospital | Outpatient | ICD-10-CM | HCPCS Level I (AMA) | APC |
| Ambulatory Centers | Outpatient | ICD-10-CM | HCPCS Level I (AMA) | ASC Fee Schedule |
| Physicians | Facility or Office | ICD-10-CM | HCPCS Level I (AMA) | MPFS for physician |
*HCPCS Level I (AMA) codes are also known as CPT code. HCPCS Level II (CMS) codes are for products, supplies, and services used or provided outside of a physician’s office that are not already included in the CPT code.
Billing & Coding
In Development.
Coverage
In Development.
Payment
In Development.
Expanding Reimbursement for New Technology
It is imperative taht innovator identify relevant coverage and building codes to support a novel innovation or medical product. Oftentimes, understanding the existing payment infrastructure for payment as well as the restrictions and incentives that the current system provides is crucial for the business model development. In the US, the largest public insurance program is Medicare and Medicaid, which is regulated by the Center for Medicare and Medicaid Services. However, a fragment system both public and private insurance programs co-exists with the federal CMMS program.
Step 1: Assess the Reimbursement Landscape
Resource: CMS Innovator’s Guide
Step 2: Develop Pivotal Clinical Trial Evidence
In Development
Step 3: Expand Existing or Pursue New Coding
ICD-10 Codes
ICD-10 Codes for hospital inpatient claims are managed by a shared committee between the National Center for Health Statistics and CMS called the C&M Committee (ICD-10 Coordination and Maintenance Committee). Innovators can submit proposal for ICD-10 modifications u to two months prior to the scheduled meeting. Proposals for code modification should include:
- background information on the procedure, patient population, outcomes, and any complications
- description of the code modification being requested
- rationale for why the modification is needed, including clinical relevancy
- supporting clinical references and literature
If the code modification proposal is accepted, C&M Committee would generally assign a coding specialist to each selected proposal. The coding specialist will schedule a meeting with to discuss the proposal and prepare a background paper, including recommendations on the suggested modification.
Action: C&M Committee ICD-10 Modification Proposal
HCPCS Level I
HCPCS Level I, also known as CPT, codes for hospital outpatient and physician claims are managed by the American Medical Association (AMA).
Action: AMA CPT Code Process
HCPCS Level II
HCPCS Level II codes for outpatient products and supplies claims are managed by CMS.
Action: CMS HCPCS Level II Coding Application
Step 4: Coverage Decision
In Development.
Coverage Extension: LCD vs NCD
In Development
FDA/CMS Parallel Review Program
FDA and CMS finalized the Parallel Review Program in 2016, which established simultaneously review by FDA and CMS for the submitted clinical data to help decrease the time between FDA's approval of a premarket application and the subsequent CMS national coverage determination. Parallel Review has two stages:
- FDA and CMS will meet with the innovator to provide feedback on the proposed pivotal clinical trial
- FDA and CMS concurrently review in parallel the clinical trial results submitted
FDA and CMS will independently review the clinical data to determine whether it meets their respective agency's standards and communicate with the manufacturer during their respective reviews.
Action: How to Apply for the CMS/FDA Parallel Review Program
Step 5: Payment
In Development
Action: CMS NTAP (New Technology Add-on Program) Application
Action: CMS Ambulatory Payment Classification System Application: In Development
Action: AMA Specialty Society Relative Value Scale Update Committee: In Development
Continual Support for Reimbursement Strategy
In Development
Version History
- 07.22.2019 Added Subsection on Coding, Coverage, and Payment.
- 01.30.2019 Initial Revision.