You Can Finally Get Reimbursed. Right?

Happy Thursday everyone! I took a few weeks off because we are deeeeeep into raising Vol. 1 Ventures’ first fund. When I left my own startup I vowed to never raise money again because it was such a hellish experience. Alas, when you start a fund (and are not independently wealthy) you also have to raise money from limited partners. I can confirm that the fundraising process for funds is just as long and hard as it is for founders. For me, it’s important that I bring on the best folks as limited partners so that our founders benefit as much as possible. We get a lot of inbound from folks thinking about becoming an LP so feel free to email me ([email protected]) if you’d like to chat about opportunities.

Now onto the final part of our reimbursement explanation for everyone…

Part 3: The final countdown to REIMBURSEMENT!!!

(If you’d like a quick review check out Part 1 and 2 of our series on reimbursement take a look below…)

So after you’ve talked to the FDA you’re ready to get paid right? Bless your hearts…Wrong. Now we get to deal with committees and it’s time to put your numbers hat on!

If the reimbursement conversation is around Medicare the RUC is someone you should know.

When Medicare transitioned to a physician payment system based on the resource-based relative value scale (RBRVS) the AMA formulated a multispecialty committee. This committee, known as the AMA/Specialty Society RVS Update Committee (RUC), provides medicine a voice in shaping Medicare relative values.

The RUC is a unique multispecialty committee dedicated to describing the resources required to provide physician services which the Centers for Medicare & Medicaid Services (CMS) considers in developing Relative Value Units (RVUs). Although the RUC provides recommendations, CMS makes all final decisions about what Medicare payments will be. As we see more movement to value-based payments in healthcare this committee will be more important for folks to navigate.

Most important though is the Healthcare Common Procedure Coding System (HCPCS) which is used by payors to determine how much they will reimburse healthcare providers for medical services. The committee responsible for recommending changes and updates to the HCPCS is called the HCPCS Level II Coding Panel. This panel is comprised of representatives from various sectors of the healthcare industry, including physicians, suppliers, manufacturers, and other healthcare professionals. The panel meets regularly to review and update the HCPCS codes, and their recommendations are subject to approval by the Centers for Medicare and Medicaid Services (CMS).

The Healthcare Common Procedure Coding System (HCPCS) is produced by the Centers for Medicare and Medicaid Services (CMS). HCPCS is a collection of standardized codes that represent medical procedures, supplies, products, and services. The codes are used to facilitate the processing of health insurance claims by Medicare and other insurers. HCPCS is divided into two subsystems, Level I and Level II. Level I is comprised of Current Procedural Terminology® codes (HCPT). HCPT codes consist of five numeric digits. (For more information about HCPT, see the HCPT source synopsis.) Level II HCPCS codes identify products, supplies, and services not included in CPT. Level II codes consist of a letter followed by four numeric digits. Current Dental Terminology codes are included in the Level II codes as HCDT. (For more information about HCDT, see the HCDT source synopsis.)

Finally, the AMA CPT Editorial Panel is responsible for maintaining and updating the Current Procedural Terminology (CPT) code set. The CPT code set is used by healthcare providers to report medical services and procedures to payors for reimbursement. The panel is made up of representatives from various sectors of the healthcare industry, including physicians, suppliers, manufacturers, and other healthcare professionals. The panel meets regularly to review and update the CPT codes, and their recommendations are subject to approval by the American Medical Association (AMA) Board of Trustees. The Panel is representative of all medical professionals, with 12 of its 21 members appointed by the national medical specialty societies.

Finally, once you have a code you are able to properly negotiate a contract with payors. (N.B. If you are lucky enough to have a code already you can skip to this part but beware that this means you most likely will later have to go through the process of getting a proprietary code for your product when payors want to pay less or deny claims.)

Contracting with payors is an important part of the reimbursement process. Healthcare providers must negotiate contracts with payors in order to establish reimbursement rates for their services. These contracts can be complex and may involve negotiations over the types of services covered, the amount of reimbursement for each service, and other factors such as patient volume and quality metrics. Once a contract is in place, healthcare providers can bill the payor for their services using the appropriate medical codes, and the payor will reimburse them according to the terms of the contract. It's important for healthcare providers to have a strong understanding of the reimbursement process and to negotiate contracts that are fair and appropriate for their practice. Usually, however, medical coders are hired by hospital systems and large practices so that physicians don’t need to spend more time dealing with reimbursement versus seeing their patients.

Pwew! Okay y’all! We did it! Now you just have to get that payor contract and you are ready to go.

(And in case you are wondering…yes, this whole shebang has a negative impact on getting new healthcare innovation to market and it directly impacts how care is delivered and the quality of said care.)