Developing a Strategic Reimbursement Plan

1. Developing a Strategic Reimbursement Plan Second Annual Medical Device Regulatory, Reimbursement and Compliance Conference Jill Rathbun Galileo Consulting Group, Inc. March 29, 2007

2. Reimbursement: A “Three-Legged Stool” Coding Reimbursement Coverage Payment

3. Coding • CPT – 4 • Standard within healthcare industry • In 2000, CPT set as national standard under HIPAA of 1996 to report physician procedures and services • CPT codes must be used for electronic transactions • Inclusion in CPT does not necessarily mean insurance coverage • About 7500 CPT codes included in Medicare’s Physician Fee Schedule • Need Clinical Vignette of the steps in the procedures where the device is used

4. Coding • Categories of CPT Codes: • Category I Codes -Describe a service or procedure identified by a five –digit code and a descriptor • Category II Codes – Performance Measurement • Category III Codes – Emerging Technology

5. HCPCS Codes • The Federal Government develops and maintains HCPCS Level II Codes • Any supplier or manufacturer can submit a request for coding modifications • Deadline is once a year, January 3rd or the first business day in January.

6. Payment • Questions to ask: • Sight of Service • Physician Office • Hospital Outpatient • Hospital Inpatient • SNF • Home • Supply or separately payable device • Included in procedure payment • Additional payment above procedure • Health Care Personnel Involved • Previous Pricing of other devices in same class – who is typical

7. Payment • Practice Expense RVUs • APC • Separately Payable • Cost or Cost plus • Capitation • DRG • Home Health Rates • SNF Rates • PT/OT Cap

8. Coverage • Medicare • General Medical Reasonableness • National Coverage Determination • Local Coverage Determination • Medicaid • Private Insurance • Coverage Limits

9. Things to Think About • Risk/Reward of Reimbursement • Investment of Resources and Time to Achieve End • Partners • Impact on Sales Strategy and Adoption

10. Working with Medical Societies • Identifying specialties that will use the device • Understanding who the leaders are in each society and the internal relationships and personalities • Where Societies Can Help You: • CPT Code Applications • Consensus Statements • CAC Members • Private Insurance

11. Questions? • Contact Information: • Jill Rathbun, Galileo Consulting Group, Inc. • 703-486-4200 • Jill_Rathbun@Galileogrp.com