Manufacturers: Have You Provided Reimbursement Strategy Education for Your Executives and Sales Representatives?

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This author/consultant frequently reminds manufacturers that the time to develop a reimbursement strategy for a new product or procedure is when the idea is a “drawing on a napkin” and while drafting the Food and Drug Administration (FDA) marketing application.
 
Unfortunately, some manufacturers do not heed this advice and only develop and implement an FDA strategy. Once those manufacturers receive FDA marketing clearance for their products, they quickly learn that payers usually say, “The product has FDA clearance, so why should we cover and pay for it?” That is when my phone often rings and those manufacturers request assistance with developing and implementing a coding, coverage, and payment strategy—NOW.
 
The executives are usually disappointed when I explain that obtaining appropriate codes, coverage, and payment takes time, does not happen instantly, and should have been started well before the FDA submission. Due to this product development oversight, the executives often realize that they may have established unrealistic sales goals for unrealistic places of service. That is how I help them make “lemonade out of lemons” by 1) offering to educate the executives and the sales representatives how to position their products in places of service where reimbursement is a non-issue and, 2) offering to assist them develop and implement a reimbursement strategy for places of service where reimbursement is an issue.
 
Let there be no mistake: many manufacturers do develop their FDA and reimbursement strategies simultaneously and do provide reimbursement education for their executives and sales representatives on an ongoing basis. In fact, this author/consultant has trained over 7000 wound/ulcer management executives and sales representatives. Be assured that the goal for this training is not to teach the executives and sales representatives how to be reimbursement specialists and/or how to provide reimbursement education to their customers. Instead, the goal is to teach them how the payment systems of their target markets align with the current reimbursement status of each of their products.
 
Because I have had the privilege of providing multiple education programs to executives and sales representatives, I have witnessed firsthand the reimbursement misperceptions that are prevalent throughout the industry. Therefore, the remainder of this article shares a small sample of this reimbursement knowledge gap. Hopefully, this information will serve as an inspiration for manufacturers to take the time to provide appropriate ongoing reimbursement education to their executives and sales representatives.

Scenarios:

When manufacturers call me for reimbursement education, they typically report that:

• They do not have an HCPCS code for one or more of their products and/or all sizes of their products.
• The payers are not covering their products.
• The payment rate is not adequate to pay for their products.
• The sales force is not meeting their sales goals and they believe it is because they need a code to bill for the product in every place of service.
• The providers tell them that their product(s) is/are not separately reimbursed in their place of service. 

Facts to Consider:

• Most, but not all, medical devices need a HCPCS code for either claim submission or for tracking purposes.
• HCPCS code applications must be submitted for most but not all medical devices, such as surgical dressings for every size of product.
• If the medical device brand name is changed, a new HCPCS code application must be submitted.
• Payers should be educated about new products and should be provided with published clinical evidence.
• In some places of service, products are paid separately; in other places of service, products are packaged into the payment the provider receives for other services or episodes of care.

Reimbursement Education for Executives and Sales Representatives

To prepare for the custom-designed education programs, I always research:

• The promoted products and their FDA-cleared descriptions and indications.
• The manufacturer’s current reimbursement strategy, if it exists, for each product.
• Each product’s HCPCS code status
• Each product’s Medicare coverage status
• Each product’s Medicare payment status, if separately payable
• The current Medicare payment system for each place of service where the manufacturer wishes to sell the products
• Reimbursement strategy consultation and training, if any, that the executives and sales representatives received in the past
• Reimbursement and terminology misperceptions of the executives and sales representatives
• Reimbursement roadblocks that the sales representatives are experiencing in each place of service.

Once the extensive research is completed, the hard work begins of creating an educational program that will guide 1) the executives to set realistic expectations of their sales representatives and 2) the sales representatives to position each of their products correctly in each place of service. This is not an easy task because I usually have a wide variety of topics to deliver in a manner that will keep all the participants engaged throughout the entire education program.

Then while facilitating the education programs, there are always surprises. For example, I have been surprised that the participants did not know, or had different misperceptions about:

• basic reimbursement acronyms
• the difference between ICD-10-CM, HCPCS, and CPT^® codes
• what Local Coverage Determinations (LCDs) and Local Coding Articles (LCAs) are, and that they exist, for their products
• the payment system of each of their target markets
• the difference between a distributor; durable medical equipment, prosthetic, orthotics, and supplies (DMEPOS) supplier; a third-party biller; and a Medicare Part B biller 
• the difference between a hospital owned outpatient wound/ulcer management provider-based department (PBD), a physician-owned wound clinic, and a mobile physician/qualified healthcare professional group
• the difference between a skilled nursing facility and a non-skilled nursing facility
• the written order and documentation requirements for their products

I suspect if I gave a test pertaining to the above topics to executives and sales representatives throughout the country, many of them may not receive passing scores.

That is why I am so passionate about providing custom-designed reimbursement strategy education programs to executives and sales representatives.
 
At the end of each program, the greatest compliment that I hope to receive is that each executive and each sales representative was able to create a “to-do list” of meaningful steps they can take to accomplish realistic sales goals—and that they are enthusiastic to use the reimbursement strategy knowledge to position their products in each place of service they should currently target.

Summary:

Manufacturers should arrange ongoing reimbursement education for their executives and sales representatives. The goal should be first to learn how to position their products clinically, and second to position their products in alignment with the payment system of the realistic places of service. When this education is not provided, or incorrect information is provided, executives often send sales representatives on “wild goose chases” and/or sales representatives use their creativity rather than reimbursement facts. We all know that creativity can sometimes lead to unintended consequences!
 
Kathleen D. Schaum oversees her own consulting business and is a founding member of the Today’s Wound Clinic editorial advisory board. She can be reached for consultation and questions at kathleendschaum@gmail.com.

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