The emergence of wearable devices for remote patient monitoring is rapidly helping physicians improve patient care along with having the potential to dramatically lower healthcare costs. According to Goldman Sachs, remote patient monitoring provides the potential for 200 billion dollar annual savings in healthcare costs, targeting the fields of heart disease, COPD/Asthma and diabetes alone.1
The FDA continues to approve new, innovative monitoring devices while the Centers for Medicare & Medicaid Services (CMS) increasingly supports clinicians who leverage remote monitoring tools, such as wearables and smart devices. The timing appears right for the adoption of these devices to take off, with dozens of companies ranging from start-ups to large, well established medical device manufacturers seeking to capitalize on this trend.2
But how will physician adoption of these devices pan out among competitors in the same space? And, how will the device and IDTF companies get paid? The answers to these questions will help determine the market success for these types of products.
Our AVP of Product Marketing recently attended a Wearable Medical Device conference in Santa Clara, California. Based on the content of the conference and the discussions during the breakout sessions it was clear that Medical Device companies and manufacturers are on top of the regulatory and technical requirements. However, these companies have a forward-looking gap as it relates to their overall strategy that will impact not just the adoption rate of their innovative solutions but potentially can put the company finances on life support. One of the key success criteria for medical device adoption is to have a clear reimbursement strategy across the healthcare ecosystem from patient to cash collections.
Coverage for these innovative products and the related diagnostic benefits they provide tends to lag behind the technology, and obtaining payment can be challenging, with complex and evolving payor requirements. Generally speaking, there are two billing models used by remote patient monitoring companies:
The first model entails directly billing the provider for the device or service, typically a hospital or physician practice, with this model, the device company takes little risk. It is the provider’s responsibility to submit the insurance claims for the device testing, as well as for services for administering the device, and collecting from the payor(s). If the provider has trouble getting reimbursed or fails to collect, there is a good probability the charge gets written off. Due to the relative low-cost compared against other hospital charges, it’s many times simply too burdensome and costly to resubmit or appeal a denied claim. Ultimately, if the hospital or the physician is not getting reimbursed or it is difficult to get reimbursed to their satisfaction, they may be hesitant to prescribe the device going forward, and adoption suffers.
For this reason, many remote patient monitoring companies have moved to an alternative second model, whereby the third-party payor and/or the patient is billed directly. With this model, the responsibility for billing, reimbursement collections, and revenue cycle management are with the device company. Relieving the provider of this burden dramatically improves the physician experience and the value of the monitoring device itself. All other factors being equal, physicians are more inclined to adopt the most appropriate treatment for the patient using this model.
How will the device company get paid? This is where XIFIN can help. It turns out that the billing challenges faced by remote monitoring and testing device companies are very similar to those encountered by medical laboratories. In both cases, the company is providing diagnostic information used by physicians for treatment decisions. Getting properly paid for these diagnostic services is not always straight forward, and requires unique systems and processes vastly different from those used for hospital and physician revenue cycle operations. These include continually understanding exactly what information payors need for reimbursement at the time of service, and facilitating the acquisition and submission of any certifications or other attachments that may be required. They include automated processes for submissions and error correction, with real-time financial visibility and monitoring. Finally, these systems and processes include a comprehensive appeals methodology, using payor analytics and detailed tracking, to increase appeals success rates. As this happens, the device companies become much better positioned to negotiate coverage, making it easier for the physician to prescribe the what they feel is the best treatment for the patient, and adoption thrives.
XIFIN has firsthand experience on the positive impact a reimbursement strategy can deliver for leading edge diagnostic and monitoring medical devices. Don’t have a well vetted adoption and reimbursement strategy for your medical device? Let’s talk, we can help.