When Claims Reimbursement Doesn’t Cover Healthcare Innovation

August 22, 2018 - Implementing healthcare innovations that improve care quality is key to boosting patient experience and care quality, but what happens when claims reimbursement doesn’t cover the use of the latest and greatest services?

This is the case at Nemours Children’s Health System. Radiologists at the health system are using 3D printing technology to create models of patients, so surgeons can practice complex procedures and providers can explain a child’s disease progression.

With the technology, a surgeon can hold an exact replica of a child’s heart, walk through the complex surgery, and test different catheters before even cutting open the patient. Parents can hold a model to really understand the procedure about to happen or how their child’s condition will impact his life.

Radiologists at the Florida-based hospital system are leveraging 3D printing technology to inform their providers and patients because they feel it is the right thing to do. The models are boosting surgeon confidence and outcomes, as well as reassuring parents that they brought their sick child to the best place for care.

But the children’s health system is doing this all for free. Payers are not reimbursing the children’s health system for doing right by their patients, investing in innovation, and improving patient outcomes.

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“All of that comes with a significant price tag. Most of these are done for complex surgical procedures and at the end of the day, we don't get any additional revenue for doing any of this,” Craig Johnson, MD, Enterprise Director of Interventional Radiology at Nemours Children’s Health System recently told RevCycleIntelligence.com.

Besides innovative 3D printing, there are a lot of routine services that the radiology department does that don’t get reimbursed, added Johnson’s colleague, Daniel Podberesky, MD, Radiologist-in-Chief.

“For example, all the elastography that we do, both ultrasound and MR are all basically done for free,” he said. “Currently, there is no reimbursable code for elastography even though we use it frequently for the liver and thyroid. And there's going to be more applications for it coming.”

A lack of billing codes for imaging techniques is commonplace, the pediatric radiologists stressed. And the more innovative the technique is, the less likely hospitals will get paid for implementing the service that improves care for their patients.

“What ends up happening is that the evidence-based literature starts coming out and it picks up steam,” Podberesky explained. “Then, it becomes accepted clinical practice. There's a delay of about three to five years before the insurance companies even begin to catch up with reimbursing for practice that has already become part of the standard diagnostic imaging work-up, both in children and adults.”

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Providers outside of radiology also face similar coding and billing challenges. A 2017 study should that Current Procedural Terminology (CPT) codes did not account for all the provided by primary care physicians in about 60.3 percent of visits.

The payment lag creates massive financial pressures, particularly for pediatric providers, Podberesky emphasized.

Children’s hospitals like Nemours face unique patient cases compared to their general acute care counterparts, and billing codes do not always account for that.

“All of these codes don't have any ages attached to them,” Johnson elaborated. “So, you do this procedure and you have the CPT code. But when you have a 45-year-old who just had a hole poked into their artery, they can typically sit there for six hours with the sand bag on them. And if they're bleeding, they can put pressure on it.”

“Well, if you have a 4-year-old and the 4-year-old is supposed to stay still and not move for six hours, then that’s a whole different level of care that's necessary for the exact same procedure,” he continued. “It also changes the amount of sedation and whether you have an ICU stay versus sitting in a PAC-U where you don't need to be monitored as closely.”

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Pediatrics is a whole different level of care, he reiterated. But billing codes and reimbursement do not consider the additional time and resources needed to administer that level of care.

Instead, providers must rely on donor support and private grant funds to invest in healthcare innovations that improve care quality and patient experience.

The lack of sustainable funding makes creating a business case difficult for providers. But getting care-enhancing services and technologies implemented is a top priority for Johnson and Podberesky.

Making the healthcare innovation business case

Payers may not be up to speed when it comes to healthcare innovations. But parents and patients certainly are.

Healthcare is becoming more of a consumer experience. Patients are rating and writing about their hospital or provider experience online as if they visited a restaurant or hotel. Ensuring patients receive a high-quality experience, as well as high-quality care, is paramount.

Bringing the latest and greatest technologies to patients and their parents is one way Nemours makes sure consumers have an excellent experience with their care.

“What we found is that the families are really speaking up a lot on how important this was for understanding the disease progress their children had,” Johnson said. “They also better understood the risks and benefits because they could see and hold an exact replica of the tumor in their hands. And afterwards, they felt we had better technology, a better team, and a higher end, multi-disciplinary group taking caring of their child.”

Patient experience and satisfaction is a key factor for C-suite executives. Providing high-quality experiences to patients through innovative technology may not be reimbursable but it does attract patients.

“A lot of times the services lead to free marketing because parents start blogging about their experiences and what they had,” he stated. “They explain how the other consults at the other institutions they went to did not have this technology, and that made a difference to them.”

Failing to offer the latest healthcare innovations could also harm the hospital’s bottom line more than the lack of reimbursement, Podberesky added.

“If you don't use those techniques at your institution, then you are behind,” he said. “You are not going to be a place that is going to pop up when a parent does a Google search looking for an academic institution that uses the latest and greatest techniques. It becomes a competitive advantage to offer those services.”

“If you don't offer those services, then you are going to lose business,” he added.

Offering innovative services, such as 3D printing technology, becomes a major point in the business case. C-suite executives who get the final say on department budgets need to see that healthcare innovations will not hurt the hospital’s bottom line. And a boost to patient satisfaction and experience should help providers convince executives that a service like 3D printing is worth the price tag and lack of reimbursement.

Improvements in efficiency and outcomes are also sandbag points in the business case for implementing healthcare innovations, the radiologists agreed.

“The big thing going forward for technologies like 3D printing, and even with starting it, is to prove the improved outcomes,” Johnson said. “You need to prove the decreased OR time and increased efficiencies, especially with the selection of surgical supplies and equipment based on being able to plan on where you're going and what you need to use.”

Increasing operating room efficiency translates to more cases, less staff overtime, and shorter wait times – all factors that can increase a hospital’s revenue.

Proving a new technology or service can improve patient outcomes is also critical when making the business case, especially at an organization transitioning or engaging in value-based purchasing models that reward or penalize providers based on outcomes.

“What we've heard from all the surgeons that we interviewed before and after implementation of 3D printing technology is that there is increased surgical confidence going into the procedure knowing exactly how they need to position the patient, where they're going to be doing the incision, and so on,” he stated.

“They feel that it's going to lead to and has led to decreased complication rates. What they've said is that for these types of complex cases, they've seen less side effects, less complications because they know the anatomy upfront.”

While implementing non-reimbursable services and technologies can boost the bottom line through patient volume and increased efficiencies, getting a steady stream of revenue from the services is still key to sustaining the use of the innovative services.

Getting reimbursement for healthcare innovations, improved care

Providers tend to a significant lag between when an innovative service becomes a clinical standard and payers actually pay for the use of that service. But providers can help to speed up the reimbursement timeline by opening communication lines with their payers and policymakers, Johnson and Podberesky stated.

“We actually took a ‘field trip’ up to Tallahassee a couple years ago to have some conversations with some of our leaders in government,” Podberesky said. “Craig’s been in contact with some of the medical directors at the insurance companies.”

During their discussions with policymakers and insurance leaders, Johnson lobbied for proper reimbursement and billing codes for Nemours innovative services.

“We put together some videos discussing patient examples and the benefits of newer, minimally invasive approaches for legs compared to amputations,” Johnson stated. “There are a number of diseases that I take care of and the standard of care when I came here six years ago was to amputate. Now I'm glad to say that out of the hundreds I've seen with this disorder, we've had zero amputations.”

The presentations give payers the opportunity to hear about the innovative services from their providers and see why the service should be added to their claims reimbursement list.

Working with a healthcare association can also help providers demonstrate the value of innovative services and technologies to payers, the radiologists stated.

“One of our national societies, the Radiological Society of North America, actually has a work group and we're actively petitioning to actually get proper reimbursement like we did years ago in the imaging world to get codes approved for 3D rendering on the computer screen,” Johnson said.

But the journey is not over yet, he pointed out. Their efforts to earn revenue for their innovative services do not always result in immediate reimbursement.

“Sometimes we get paid, sometimes we don't. Sometimes we receive a limited code for a huge amount of work and sometimes we don't,” Johnson said. But the providers promised to continue with the ongoing reimbursement battle to ensure their patients receive the best care available.