US Reimbursement Codes for Medical Devices

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US Reimbursement Codes for Medical Devices

A Primer on the US Reimbursement System for Medical Devices

The main success criteria for medical device companies after earning FDA regulatory clearance is securing positive coverage decisions from payers. While regulatory approval is sufficient to get a product to market, it has no bearing on product adoption. The availability of reimbursement has a direct impact on therapy adoption – it can “make or break” a product1. This primer provides an overview of US reimbursement codes and when they are used to help determine coverage and payment for medical devices.

Often medical device companies underestimate the barriers associated with securing payer coverage. If providers are not paid adequately, they will be reluctant to offer a new therapy, negatively impacting the market potential. Companies need to research the delivery chain for their products and develop an integrated reimbursement strategy that identifies a path to clinical adoption and broad payer coverage.

The US healthcare system involves multiple government and private payers – the reimbursement processes differ by payer type. The most important players in coverage decisions are Medicare (which accounts for 21 percent of national healthcare expenditure) and large commercial insurers. Reimbursement describes how commercial insurance plans (or the government) pay for items or services provided by medical professionals. It can be broken down into three major components: coding, coverage and payment.

In the US, physicians and healthcare facilities are billed and paid separately. A portion of procedures is often paid directly by those receiving the treatment. Physicians bill for the procedures they perform at different rates depending on whether the procedure is performed in a facility setting (e.g. hospital) or a non-facility setting (e.g. office or clinic). Physician rates for work performed in facilities are generally lower than physician rates for work performed in non-facility settings, because the facility provides support and infrastructure for the procedure which is billed separately.

US Reimbursement Codes 101

A Primer on the US Reimbursement System for Medical Devices