Many new technologies are readily available on the market, including cardiac CT, CT computer-aided detection (CAD), MRI CAD, and virtual colonoscopy. How can radiology administrators best understand a new technology's reimbursement status (so crucial to the technology's success) as they make capital purchase decisions?
Vendors should be expected to develop and communicate a cohesive reimbursement strategy to their customers as part of the negotiations for a new piece of equipment. Since it's rare for any new technology to be paid for before the provider initiates a claim, it's the vendor and the facility working in concert that results in successful reimbursement.
The following five questions will help facilities determine whether a vendor has a competent and viable reimbursement plan.
- What is the unique identifying code for the technology?
- What are the published values?
- Are there publications that discuss reimbursement issues?
- Is there vendor support for reimbursement?
- Is there marketing support for the new technology?
Identifying codes
A unique identifying code allows the provider to communicate to the payor the procedure for which payment is being requested, and is necessary for claim submission and processing. The preferred method of submitting claims is electronically, and it's important that the corresponding electronic systems have the same datasets for efficient processing. In the absence of a complete dataset, the claim can't be processed and gets stuck in a review process.
CPT I code: The preferred code for new technology, it comes with corresponding values from the American Medical Association's (AMA) Relative Value Scale Update Committee (RUC). It should be noted that no guarantees are associated with reimbursement for a CPT I code.
CPT III code: This code is used primarily to track utilization for new procedures and so does not obtain corresponding values from the AMA's RUC. This limitation can be overcome via the publication of a non-Medicare Resource-Based Relative Value Scale (RBRVS). A CPT III code is not an alternative to a CPT I: CPT III codes expire in five years, therefore requiring the transition to a CPT I code.
Healthcare Common Procedure Coding System (HCPCS) code: This is a Medicare-specific code that may or may not be accepted by private payors. A HCPCS code does demonstrate acceptance and payment of the technology by Medicare. Most private payors claim that they use Medicare as their standard for covered benefits, but this is not always the case.
Alternative CPT I code: Some vendors may suggest that a facility use an alternative CPT I code that is similar to their new technology. In this case, the vendor should provide a letter from the AMA stating the acceptance of an existing code for billing the new technology.
Published values
Published values are also necessary for the electronic claim submission by the provider, as well as the processing of the claim by the payor. The primary concern for the provider is, "How much can I charge?" The answer to this question is often based on the RBRVS assigned to the unique identifying code for the procedure. The payor will ask, "How much will I reimburse?" This also is often based on the published RBRVS for the procedure performed.
RBRVS: This scale is a scientific means of determining costs for procedures. The relative value of each service is the sum of relative value units (RVUs) representing physician work, practice expenses, and cost of malpractice insurance. It is estimated that 70% of all payors utilize RBRVS in their reimbursement strategies.
Non-Medicare RBRVS: The U.S. Centers for Medicare and Medicaid Services (CMS) develops the RBRVS for the Medicare Physician Fee Schedule (MPFS). The MPFS, however, is not a complete schedule: Medicare does not pay for some services and does not assign RVUs. The evaluation of these noncovered services provides a logical way to value services performed using one relative value scale.
Relative values for physicians (RVP): The RVP was established to help physicians defend and negotiate fees for medical and surgical procedures. It contains values widely used by insurance companies and provides values for all procedures, not just those utilized by Medicare. The RVP is a relative measure of what physicians are charging for a particular service.
Publications that support the technology
A vendor should be able to reference published articles about a new technology that will boost the credibility of the vendor's reimbursement strategy and message in the eyes of potential providers. Examples of coding publications include Radiology Coding Alert and Cardiology Pink Sheet; general publications include AuntMinnie.com (which allows for the opportunity to gauge the general interest level of a published article by following the "Top E-mailed Articles/Top Printed Articles" links), Imaging Economics, and Radiology Today.
Vendor support for reimbursement
To facilitate the claims process, vendors should provide a reimbursement toolkit so that providers can find quick answers to their reimbursement questions (and since vendors are dependent on the provider to gain reimbursement, it's in a vendor's interest to assist the provider as much as possible). Look for the following resources from a vendor:
A toll-free reimbursement assistance telephone number
An e-mail address providers can use for reimbursement questions
Resources to help providers influence payors: This packet might include a letter template that summarizes the clinical value of the technology; published, peer-reviewed clinical papers that address the technology's clinical significance, its positive effect on patient management, and its effect on treatment cost; and a marketing piece that briefly describes the technology and how it works.
Resources that help providers to communicate the technology's benefits to patients: Patients have the ability to influence payors by appealing denials (in fact, in many instances, calls to customer service are logged and become part of the Healthcare Effectiveness Data and Information Set, or HEIDIS rankings, for the payors). This kind of packet could include a marketing piece that describes the benefit of the technology to the patient and a patient waiver in the event the provider chooses to bill the patient directly for the technology.
Marketing support
A facility should launch a marketing campaign around a new technology for two reasons: to differentiate itself from the competition, and to influence regional payors to reimburse for the technology. A marketing program enhances the chances of a successful reimbursement strategy by increasing the number of people involved in influencing the payor.
Let's take cardiac CT as a case study. It's a new technology that currently has published CPT III codes. Despite the lack of published values to correspond with the CPT III codes, there are reasons to be optimistic about reimbursement for cardiac CT, although vendor pressure will be necessary to ultimately secure reimbursement. Information like a technology's current reimbursement status and reasons to be optimistic about its reimbursement can boost a facility's marketing campaign around that technology.
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Success story
Chest x-ray CAD is also a new technology that has become a successful reimbursement strategy story.
The technology has two fully implemented CPT III codes: 0174T and 0175T. It has obtained published non-Medicare RBRVS and RVP values. Multiple publications discuss chest x-ray CAD, including Radiology Coding Alert, AuntMinnie.com, Health Imaging & IT, Medical Imaging, Radiology Coding Wire, and T3 Review from Sg2.
Chest x-ray CAD vendors offer access to a reimbursement specialist by phone and e-mail, as well as multiple means of marketing support to the providers. The result? A nine-month evaluation of providers' explanation of benefits (EOBs) that documented private payors reimbursing for chest x-ray CAD representing approximately 100 million covered lives.
The current financial crisis in radiology is due to the Deficit Reduction Act of 2005, utilization management, and transparency pricing, and it demands that radiology managers gain a better working understanding of reimbursement, especially for new technologies. A vendor reimbursement strategy and commitment to support the reimbursement process should be a key element in a facility's selection of a new technology and vendor partner.
By Michael Longacre
AuntMinnie.com contributing writer
August 23, 2007
Michael Longacre is a principal with HealthCare Market Strategies, a Yamhill, OR, consulting firm that facilitates the early adoption of new technologies by addressing reimbursement issues.
Related Reading
Deficit Reduction Act Survival Kit, Part 3 -- Growing the business, August 7, 2007
Deficit Reduction Act Survival Kit, Part 2 -- Attaining operating excellence, July 30, 2007
Deficit Reduction Act Survival Kit, Part 1 -- Leading your imaging center, July 23, 2007
DRA takes bite out of GE's Q2 numbers, July 16, 2007
It may get worse before it gets better for diagnostic radiology practices, July 9, 2007
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