This interdisciplinary course focuses on sustainable innovation, introducing entrepreneurial students to the realities of problem identification and solution design within the complex world of healthcare.
Reimbursement Basics
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來自 Duke University 的課程
Healthcare Innovation and Entrepreneurship
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從本節課中
Designing an Innovation
What approaches work best for design creation? Is "Brainstorming" an actual process? How do you select the "best fit" design from competing choices? How do you assess the operating environment? Is regulation always bad? Do you have a reimbursement plan?
與講師見面
Marilyn M. Lombardi, Ph.D.Associate Clinical Professor
School of Nursing
Bob Barnes, PhDInstructor
Biomedical Engineering
Ladies and gentlemen, this is Bob Barnes. On behalf of Marilyn Lombardi, thank you
for very much for returning. we're at the last of our sessions on, on
design and creativity. And hopefully they've been useful.
And Reimbursement Basics is just what it is, it's going to be basics.
we're designing an innovation, it's our fifth week.
And as I said, Reimbursement Basics. In other words, how do you get paid back?
Well, so far we've talked about a number of items.
We'll talk a little about patentability. We've talked about legal issues.
We've talked about intellectual property. We've talked about the Food and Drug
Administration. And now what we're going do is we're
going to talk about reimbursement, and this is really is essential.
Good news and bad news about reimbursement.
Everybody knows that it's something that's important, and it has to be looked
at at some point. But unfortunately, many entrepreneurs and
innovators put this idea off until the very last.
Because, essentially, they believe that reimbursement is cons, is simple.
And conceptually, it is. The doctor or the caregiver performs a
procedure. If they do it in a hospital or facility,
the physician submits a claim to a third-party provider, typically.
Third-party being an insurance company or Medicare, Medicaid, or a preferred
preferred provider organization of some sort.
The facility, the hospital submits a claim, and the insurer pays the claim.
Isn't that wonderful. It's easy, and everybody's happy.
Unfortunately, it's not really quite that simple.
If you have a new device, and there's no customary procedure terminology, no CPT
code for it, or reimbursement code for it.
And the codes change. You know international codes, they're
codes that are used for hospital reimbursement.
Codes associated with ambulatory care. Codes assoc-uh, associated with, with the
physician's work itself. So the first question you ask, in many
cases, as an entrepreneur innovator is, does a code exist?
And if one does exist, then you, yes, you, are going to have to pursue the
development of such a code, so that your device, your product, your service can be
reimbursed or paid for by whoever the provider might be.
Now, if there's a code, oh, and by the way, if there is no code, and the
individual is willing to pay the full price, there's really no problem.
Except that the market for that might be very, very small.
If there's a code, then typically we ask, will Medicare or Medicaid pay for it, and
the answer's yes. Or will your health maintenance
organization pay for it, or your preferred provider organization pay for
it, and the answer is yes. Then, to the right, you'd see the same
physician and facility branch for each of these, I just didn't share, show them.
And and if there's and if there's a code for the physician, then they'll get paid.
If there's not, then they won't get paid. And if they won't get paid, they probably
won't want to use your device, your procedure, your diagnostic.
And the same is true for the facility. Now, one of the ways that you might
want to take a, take a look at this is to ask if for your particular device, if
there is a predicate device, or there's a predicate procedure, they could take
advantage of an existing reimbursement code.
Then you may want to "back calculate" what your profit might be, or your
earnings might be, from the developed, pardon me, from the development and
delivery of your device, your process, or your procedure.
And a good way of doing this is you use the rule of 50%.
And you'll see here, if, for example, we have a disposable device, like a
catheter, or a disposable device, like a syringe or a disposable device like any
number that you might see in the hospital.
That it's, reimbursement is $20, then you can typically expect that the physician
will, and this is under a CPT code, not in terms of a, of a a diagnostical aid
group, the DRG. The physician will probably get paid up
to $10. The distributor of the device, if you're
working through a distributor, will probably get paid about half of that.
The manufacturer will probably get paid about half of that.
Which leaves about $2.50 in terms of earnings.
The reason that earnings or that profit is important, is that this is going to
drive the number of these units you have to sell.
You have to sell or deliver over time, in order to be able to repay the investment
that's been made by your venture capitalist, and/or to deliver a return
that has attracted them to invest in your product or service to begin with.
You see how marketing might be related in this in terms of willingness to pay,
ability to pay, size of the market, size of the addressable market.
Well, this is all simple, right, cause did you hear me say these things like CPT
code? you probably heard me say something like
DRG, dis, Diagnostic Related Group. CMS, CPT, Center for Medicare and
Medicaid Services, Common Procedure Terminology, standardized code for
in-patient settings, HCPS, Healthcare Common Procedure Coding System, AMA
American Medical Association. I'm not going to go through all these.
You can take a look at them on your own. Local Coverage Determination.
Does that name for a particular CPT, is there a chance that if it was a code paid
$20 in North Carolina, that in Chicago it might pay $25, and the answer to that is
yes. Why?
Because different costs of living, different costs of doing business may
change. So there are indeed local coverage
determinations and modifications, and national coverage determination.
And there's some things that are covered across the nation at one price, and then
local coverage could be more or less than that, okay.
Here's some wars, some wars, some more acronyms.
Ambulatory surgical center, Blue Cross Blue Shield, Health Maintenance
Organization, PPO, Preferred, Preferred Provider Organization, et cetera.
I'm not going to go through all of these. Take a look at your reading assignment,
or at least the references that we have. Now, to the core.
The true basics of reimbursement. The first thing as an entrepreneur or
innovator you want to ask is, is this disease and the potential treatment that
I am offering, is it covered by Medicare? By preferred provider organizations?
Health maintenance organizations? Or insurance companies, such as BlueCross
Blue Shield, Aetna, Cigna, et cetera, in the United States.
If it's not covered, it doesn't matter whether there's a CPT code for it or not,
because if it's not covered, you're not going to get paid.
Oh. You mean Medicare could have a CPT code
for something, and the insurance company might not cover it?
And the answer to that is yes. Coding.
Does a code exist or does a code have to be developed?
If the answer to those things are true, then the question is payment.
Is there a possibility that your particular disposable device, or
particular procedure that takes advantage of that device, could indeed be covered
and have a code. But Medicare, Blue Cross Blue Shield,
Aetna, Signa, your MCO, your perferd, preferred provider might pay different
amounts. And the answer to that is yes.
So, remember that 50% rule we presented a few minutes ago?
That starting out $20 might be $50 in some cases, it might be $10 in others.
You need to investigate. This will begin to tell you, if the code
doesn't exist, if the coverage doesn't exist, how long you may have to wait
before you can actually begin to offer the device and expect reimbursement.
Or offer the process procedure and expect reimbursement.
It'll also give you some idea of the volumes, and how much you can expect to
be paid. I think that covers reimbursement in its
most basic form. Thank you for listening.
I look forward to talking with you soon. Good day.
