Private Payer Reimbursement Research Articles

Case Volume Justification of 3D-Navigated Spinal Procedures: A Cost-Benefit Analysis.

3D image-guidance platforms have transformed spinal surgery by enhancing visualization, increasing precision, and improving patient outcomes. However, with high procurement, operational, and maintenance costs relative to the standard of care, the benefits of acquiring these platforms must be thoroughly assessed. This study aims to develop a model that weighs the cost of a typical 3D navigation platform against its clinical benefits to determine the facility case volume required to justify its purchase. Using Medtronic's StealthStation and O-Arm as a market example, we calculated the break-even case volume by dividing the cost of the platform by the difference in gross margins between 3D navigation and the standard of care. Total gross margins earned from first-time and revision surgeries were calculated based on each payer's reimbursement rate and covered case volume, as well as each technology's revision rate. Values reported in literature and by Centers for Medicare and Medicaid Services databases were plugged into the model to calculate variables. At a 0% reimbursement rate from private payers for revision surgeries, an annual case volume of 158 spinal surgeries would be required to justify the per-year 3D navigation cost; at 100% private payer reimbursement, 352 surgeries would be required. Given these volumes, 61% of all US inpatient facilities cannot justify 3D navigation at 0% reimbursement, and 86% cannot justify it at 100% reimbursement. Accordingly, greater pricing flexibility, such as per-procedure models, is required for 3D navigation systems to standardize clinical outcomes across medical centers.

Cost-Effectiveness of Intraoperative CT Scanning in Cochlear Implantation in Fee-for-Service and Bundled Payment Models.

Electrode array tip fold-over is a complication of cochlear implant surgery that results in poor hearing outcomes and often leads to revision surgery. However, tip fold-over can be corrected immediately if identified through intraoperative computed tomography, which also potentially provides information about final intracochlear positioning. Our objective was to provide the first economic analysis of intraoperative computed tomography by generating models in fee-for-service and bundled payment reimbursement structures of payer and institutional cost-effectiveness of this technology used in cochlear implantation over 1, 5, and 10-year time periods. Cost data specific to a commerically available intraoperative computed tomography machine was obtained from the manufacturer, Xoran Technologies. Institutional tip fold-over rate was obtained from already published data. Medicare reimbursement rate for cochlear implantation was obtained from institutional accountants. Private payer reimbursement for and cost of revision cochlear implantation were estimated based on available data. At large volume centers, cost-effectiveness of this technology is possible in both fee-for-service and bundled payment reimbursement structures at various time points dependent on payer mix. Even low volume cochlear implantation centers (<150 per year) can financially benefit from intraoperative computed tomography in bundled payment models at 5- and 10-year periods regardless of payer mix. This model demonstrates key factors at play in determining cost-effectiveness of this technology including institutional factors and payer type and suggests this technology can align incentives both to improve patient care and outcomes with institutional and payer financial well-being.

Private Payer Reimbursement Policy and Live‐Video Utilization for Outpatient Mental Health Care Among the Privately Insured

Telehealth has the potential to improve access to care for patients with mental health conditions, but utilization remains low. To increase telehealth utilization, states have enacted private payer laws. While these laws appear to be associated with increased telehealth utilization, the details vary considerably from state to state. We, therefore, use longitudinal data and a codification of state telehealth private payer laws to study which aspects of the laws appear to drive the increase in utilization rates in privately insured patients with mental health disorders.We used state‐fixed effects models to estimate how policies affect live‐video utilization. We used as the dependent variable the rate of live‐video utilization per 1000 enrollees with any mental health diagnosis by state and year. Our independent variable of interest included four potential law characteristics. (a) “Full reimbursement parity”—whether telehealth services must be reimbursed at the same or equivalent rate as non‐telehealth services. (b) “Terms and conditions”—whether the law stipulates that private payers should pay and/or cover telehealth benefits based on the terms and conditions clauses of the contracts with the provider. (c) “Health services restrictions”—whether the policy explicitly states that no restrictions should apply to telehealth services or does not specify any services restrictions. (d) “Rural restriction”—whether the policy limits telehealth to rural areas only. We combined these characteristics to compare the telehealth utilization rates relative to states without telehealth private payer laws. Our models also included control variables to account for the patients’ demographic characteristics, type of insurance, comorbidities, and type of provider.We analyzed 2012‐2016 Outpatient Truven Health MarketScan® Commercial Claims and Encounters data. This data set includes health coverage and outpatient services information from about 25 million employer‐sponsored plan enrollees. Our study sample includes about 5 million enrollees per year with any mental health diagnosis and younger than 65.In 2016, the telehealth utilization rates ranged from 0.12 to 12.4 per 1000 enrollees with mental health diagnosis. For most states, telehealth utilization rates increased from 2012 to 2016. In the state‐fixed effects models, states without policies had similar telehealth utilization rates compared to states with policies. However, relative to states without telehealth policies, in states with the law plus “full reimbursement parity” utilization rates increased by 2.9 per every 1000 enrollees with a mental health condition.The growth in telehealth utilization varies by state. Having telehealth private payer laws does not necessarily relate to increased utilization rates. However, explicitly requiring full reimbursement parity for telehealth services relative to non‐telehealth services lead to higher utilization rates.The evaluation of telehealth private payer policies should account for the effects of the laws’ reimbursement and restrictions statutes on the telehealth utilization rates. The findings of this study could inform policy debates on regulation intended to promote telehealth utilization for patients needing mental health care.

PND28 A BUDGET IMPACT ANALYSIS OF CENOBAMATE FOR THE TREATMENT OF REFRACTORY PARTIAL-ONSET EPILEPSY

To estimate health outcomes and financial impact to a private healthcare payer of adoption of cenobamate into clinical practice for patients with refractory partial-onset epilepsy. We developed a 1-year budget impact model from the U.S. private payer perspective, which included a cohort of adult refractory partial epilepsy patients taking adjunctive lacosamide, perampanel, brivaracetam, eslicarbazepine acetate, or cenobamate as they experience clinical events and accrue health resource use and costs. The model explicitly incorporates costs of provider and emergency room visits along with inpatient hospitalizations as a function of estimates of seizure reduction garnered from the drugs’ Phase III trials. Costs were estimated from the 2018 Medicare Fee Schedule, which were inflated to represent private payer reimbursement. Base case model assumed a hypothetical private health plan with 1,000,000 covered lives, with 77% adults (18+ years). After applying prevalence estimates, the final population represented 0.2% of total covered lives. Base case results suggest that, after introduction of cenobamate, at 17% uptake, the plan is exposed to 281 fewer provider visits, 49 fewer ER visits, and 55 fewer hospitalizations. Use of cenobamate led to cost savings of over $827,000, representing a $0.07 per-member per-month reduction in total plan costs. We conducted a one-way sensitivity analyses series to test the impact of key assumptions on plan savings after introduction of cenobamate. While the magnitude of cost savings varied, particularly as the uptake assumption was varied, the results directionality remained consistent, indicating improved effectiveness and economic efficiency upon introduction of cenobamate. The results of this model demonstrate use of cenobamate in patients with refractory partial-onset epilepsy leads to reductions in healthcare resource use, driven by better clinical outcomes based on results published in the literature. Consequently, payers can expect moderate cost savings over a one-year time horizon.

Cost-Effectiveness Analysis of Needle Arthroscopy Versus Magnetic Resonance Imaging in the Diagnosis and Treatment of Meniscal Tears of the Knee

To determine whether needle arthroscopy (NA) compared with magnetic resonance imaging (MRI) in the diagnosis and treatment of meniscal tears is cost-effective when evaluated over a 2-year period via patient-reported outcomes. The hypothesis is that improved diagnostic accuracy with NA would lead to less costly care and similar outcomes. A Markov model/decision tree analysis was performed using TreeAge Pro 2017 software. Patients were evaluated for degenerative and traumatic damage to the lateral/medial meniscus. Assumed sensitivities and specificities were derived from the medical literature. The direct costs for care were derived from the 2017 Medicare fee schedule and from private payer reimbursement rates. Costs for care included procedures performed for false-positive findings and for care for false-negative findings. Effectiveness was examined using the global knee injury and osteoarthritis outcome score (KOOS). Patients were evaluated over 2years for costs and outcomes, including complications. Dominance and incremental cost-effectiveness were evaluated, and 1- to 2-way sensitivity analysis was performed to determine those variables that had the greatest effect. The consolidated economics evaluation and reporting standards checklist for reporting economic evaluations was used. NA was less costly and had similar KOOS versus MRI for both the medial/lateral meniscus with private pay. Costs were less for both Medicare and private pay for medial meniscus, $780 to $1,862, and lateral meniscus, $314 to $1,256, respectively. Based on the reported MRI incidence of false positives with the medial meniscus and false negatives with the lateral meniscus and based on assumed standards of care, more costly care is provided when using MRI compared with NA. Outcomes were similar with NA compared with MRI. Level II, economic and decision analysis.

Current Status of Clinical Laboratory Reimbursement

1. Rick Panning, MBA, MLS(ASCP)CM[⇑][1] 1. Chair, ASCLS Government Affairs Committee , Director of Business Development for Shared Clinical Services, Fairview Health Services, Minneapolis, MN 1. Address for Correspondence: Rick Panning, MBA, MLS(ASCP)CM , 4894 Meadow Lane, Shoreview, MN 55126, 651-280-5909, panning4{at}comcast.net. 1. Define the basic difference between retrospective reimbursement and prospective payment as it applies to laboratory services. Describe the impact this has had on the laboratory. 2. Describe how ACA has specifically impacted laboratory reimbursement in at least two ways. 3. Identify current potential threats to laboratory reimbursement. Introduction In general, reimbursement for laboratory services in this country comes from two third-party payer sources - government and private sector. This third-party payment allows patients to access laboratory services from hospitals, physician offices, long-term care and other post acute providers and private laboratories. There are many components to this complex reimbursement system, including how and when tests are covered (coverage decisions), procedure and diagnosis codes (identifying what was actually ordered and performed) and payment methodologies. While levels of reimbursement are intended to reflect the value and the cost of the service being provided, over time the level of payment has been continually reduced to meet financial goals of the government or the healthcare system. Government payers primarily reflect Medicare on the federal level and Medicaid (Medical Assistance) on the state level. The Medicare program is the most influential reimbursement system since it often impacts state programs and private payer reimbursement policies and payment levels. All public payers and approximately 67% of private payers use Medicare's payment methodologies as the basis for their own and as tools for negotiating discounts with providers.1 In our current fiscal environment, with pressures on the federal budget and concerns about the long term viability of Medicare, we have seen a change in which the Medicare program is beginning to look at private payer reimbursement levels as an opportunity to reduce its financial responsibility for laboratory reimbursement. The steady reduction in payment levels from Medicare and other payers are resulting in a negative impact on… ABBREVIATIONS: ACA – Accountable Care Act; APC – Ambulatory Patient Classification; CAH – Critical Access Hospital; CLFS – Clinical Laboratory Fee Schedule; CMS – Centers for Medicare and Medicaid Services; CPI – Consumer Price Index; DRG – Diagnosis Related Group; FEHB – Federal Employee Health Benefits; IOM – Institute of Medicine; MolDX – Molecular Diagnostics; MS-DRG – Medical Severity Diagnosis Related Group; NLA – National Limitation Amount; OIG – Office of Inspector General; OPPS – Outpatient Prospective Payment System; PPS – Prospective Payment System; SGR – Sustainable Growth Rate. 1. Define the basic difference between retrospective reimbursement and prospective payment as it applies to laboratory services. Describe the impact this has had on the laboratory. 2. Describe how ACA has specifically impacted laboratory reimbursement in at least two ways. 3. Identify current potential threats to laboratory reimbursement. [1]: #corresp-1

Private Payer Telehealth Reimbursement in the United States

Significant information is available about government-reimbursed telehealth services such as Medicare and Medicaid across the United States. Although currently 20 states mandate reimbursement for telehealth services and some private insurers have voluntarily covered those services in other states, relatively little is known about telehealth provider experiences with reimbursement from private insurance payers. To investigate this, the American Telemedicine Association's (ATA's) Telemental Health Special Interest Group (SIG), the Policy Group, and the Business and Finance SIG, with the help of ATA staff, conducted a national private payer reimbursement online survey in 2012 using Survey Monkey™ (Palo Alto, CA) ( www.surveymonkey.com/ ). Survey responses were received from respondents in 46 of the 50 states. The survey found that telehealth services are being reimbursed by private payers but that progress in reimbursement has been relatively slow compared with earlier surveys. Key findings from this study were that government payers as well as several major private payers are highly influential in payment policies for telehealth private payers, that private payers have administrative rules regarding telehealth reimbursement that are barriers to services and reimbursement, and that some providers would benefit from being better informed about billing and coding for telehealth services and how to advocate for telehealth services reimbursement.

Telehealth Among US Hospitals: Several Factors, Including State Reimbursement And Licensure Policies, Influence Adoption

Telehealth is widely believed to hold great potential to improve access to, and increase the value of, health care. Gaining a better understanding of why some hospitals adopt telehealth technologies while others do not is critically important. We examined factors associated with telehealth adoption among US hospitals. Data from the Information Technology Supplement to the American Hospital Association's 2012 annual survey of acute care hospitals show that 42 percent of US hospitals have telehealth capabilities. Hospitals more likely to have telehealth capabilities are teaching hospitals, those equipped with additional advanced medical technology, those that are members of a larger system, and those that are nonprofit institutions. Rates of hospital telehealth adoption by state vary substantially and are associated with differences in state policy. Policies that promote private payer reimbursement for telehealth are associated with greater likelihood of telehealth adoption, while policies that require out-of-state providers to have a special license to provide telehealth services reduce the likelihood of adoption. Our findings suggest steps that policy makers can take to achieve greater adoption of telehealth by hospitals.

Proton Facility Economics: The Importance of “Simple” Treatments

Given the cost and debt incurred to build a modern proton facility, impetus exists to minimize treatment of patients with complex setups because of their slower throughput. The aim of this study was to determine how many "simple" cases are necessary given different patient loads simply to recoup construction costs and debt service, without beginning to cover salaries, utilities, beam costs, and so on. Simple cases are ones that can be performed quickly because of an easy setup for the patient or because the patient is to receive treatment to just one or two fields. A "standard" construction cost and debt for 1, 3, and 4 gantry facilities were calculated from public documents of facilities built in the United States, with 100% of the construction funded through standard 15-year financing at 5% interest. Clinical best case (that each room was completely scheduled with patients over a 14-hour workday) was assumed, and a statistical analysis was modeled with debt, case mix, and payer mix moving independently. Treatment times and reimbursement data from the investigators' facility for varying complexities of patients were extrapolated for varying numbers treated daily. Revenue assumptions of $X per treatment were assumed both for pediatric cases (a mix of Medicaid and private payer) and state Medicare simple case rates. Private payer reimbursement averages $1.75X per treatment. The number of simple patients required daily to cover construction and debt service costs was then derived. A single gantry treating only complex or pediatric patients would need to apply 85% of its treatment slots simply to service debt. However, that same room could cover its debt treating 4 hours of simple patients, thus opening more slots for complex and pediatric patients. A 3-gantry facility treating only complex and pediatric cases would not have enough treatment slots to recoup construction and debt service costs at all. For a 4-gantry center, focusing on complex and pediatric cases alone, there would not be enough treatment slots to cover even 60% of debt service. Personnel and recurring costs and profit further reduce the business case for performing more complex patients. Debt is not variable with capacity. Absent philanthropy, financing a modern proton center requires treating a case load emphasizing simple patients even before operating costs and any profit are achieved.

BPH Procedural Treatment: The Case for Value-Based Pay for Performance

The concept of “pay for performance” (P4P) applied to the practice of medicine has become a major foundation in current public and private payer reimbursement strategies for both institutional and individual physician providers. “Pay for performance” programs represent a substantial shift from traditional service-based reimbursement to a system of performance-based provider payment using financial incentives to drive improvements in the quality of care. P4P strategies currently embody rudimentary structure and process (as opposed to outcomes) metrics which set relatively low-performance thresholds. P4P strategies that align reimbursement allocation with “free market” type shifts in cognitive and procedural care using evidence-based data and positive reinforcement are more likely to produce large-scale improvements in quality and cost efficiency with respect to clinical urologic care. This paper reviews current paradigms and, using BPH procedural therapy outcomes, cost, and reimbursement data, makes the case for a fundamental change in perspective to value-based pay for performance as a reimbursement system with the potential to align the interests of patients, physicians, and payers and to improve global clinical outcomes while preserving free choice of clinically efficacious treatments.

Private Payer Reimbursement for Telemedicine Services in The United States

Telemedicine has garnered significant attention over the past decade as a solution to cost and access challenges facing healthcare. Yet, utilization rates have not reached their full potential. One major barrier to the adoption of telemedicine cited in the literature is the lack of universal reimbursement from private payers. The purpose of this investigation was to capture a current picture of private reimbursement for telemedicine services in the United States. This investigation was a follow-up to a 2003 survey conducted by the American Telemedicine Association (ATA) and AMD Telemedicine. Representatives from 116 telemedicine programs were contacted between September and November 2005 via telephone and/or e-mail to participate in this survey. Of those contacted, we received responses from 64 organizations, a 55% response rate. To provide answers to our research questions, descriptive statistics were used for data analysis. Data indicate that the United States is progressing toward expanded private reimbursement for telemedicine services with 58% of responding organizations who provide potentially billable telemedicine services receiving private reimbursement (up 5% from 2003). In addition, it was found that 81% of those who receive private pay reported no differences between reimbursement for telemedicine services as compared to traditional faceto-face consults. Finally, of those who receive private pay, data indicated that telemedicine programs are submitting on average approximately 40% of consults for private reimbursement. While this investigation does suggest that we are making small improvements in private payer reimbursement, the change appears to lag behind a pace needed to optimize telemedicine deployment.

State Medicaid and private payer reimbursement for telemedicine: An overview

Individual states in the USA were given the option of paying for telemedicine services with Medicaid (i.e. federal health-care funds administered by the state) in 1998, when the Health Care Financing Administration (HCFA) published final rules for Medicare payment for teleconsultations in health professional shortage areas (HPSAs). It was left to telemedicine practitioners in each state to negotiate the scope of the services covered with the state Medicaid office. Three reports of data gathered by 2002-03 surveys on state reimbursement policies have been reviewed, with additional information from a brief informal 2005 survey conducted by the author. In the seven years since 1998, 34 states have added coverage of telemedicine services to their Medicaid programmes, although there are wide variations in service coverage, payment policies, and geographical and other restrictions. There is less published information on private payer reimbursement. One survey performed by AMD Telemedicine (AMD) and the American Telemedicine Association (ATA) showed that over half of the 72 telemedicine programmes in 25 states delivering billable services were being reimbursed by private payers. In 1999, 43% of responding telemedicine networks saw reimbursement as a barrier to long-term sustainability, while in 2004 only 22% did so. It appears that some progress has been made in Medicaid and private payer reimbursement for telemedicine.

Reimbursement for Preventive Counseling Services.

The ASCO Cancer Prevention Committee (CAPC) defines cancer prevention as, “a reduction in the risk of developing clinically evident cancer, whether first or second primary cancer, or of developing intraepithelial neoplasia (IEN), a frequent cancer precursor.”1 A recent survey of ASCO members in the United States indicated that despite the significance placed on cancer prevention, the most significant barrier to integration into clinical practice is insufficient reimbursement.2 Therefore, understanding the payment environment for cancer prevention counseling services is a critical step for oncologists to integrate cancer prevention into clinical practice. To provide practical information regarding the types of cancer prevention counseling services that are covered by payers and how these services should be billed, ASCO commissioned Avalere Health, LLC, to conduct a study of Medicare and private payer reimbursement policies. The research focused on prevention scenarios that typically occur during patient encounters, including counseling for smoking cessation, breast cancer or colorectal cancer screening and chemoprevention in high-risk populations, genetics, and the prevention of secondary cancers in cancer survivors.

Advocacy: ASE working for you.

Advocacy: ASE working for you.

Changing the health care workforce: lessons from foundation-sponsored programs.

Changing the health care workforce: lessons from foundation-sponsored programs.