Good Outcomes and Good Business

Isn’’t it great when a remarkable emerging technology is awarded with aggressive reimbursement?  I’’m very excited because just a couple of months ago, I wrote on the excellent potential of a bronchial valve.  Now, CMS has awarded the Spiration IBV, a one-way valve implanted with a bronchoscope, a new technology add-on payment.

I spoke with David Feller-Kopman, M.D., F.C.C.P., director of bronchoscopy and interventional pulmonology, associate professor of medicine at Johns Hopkins Hospital in Baltimore, MD.  He explained, “The IBV valve has shown to be very effective in the treatment of air leaks after surgery.  The technology also has other applications in stopping air leaks that can result from serious diseases of the lung and contribute to significant morbidity and mortality.”

Add-on payments were first implemented under the Benefits Improvement and Protection Act of 2000 with the goal of helping providers pay for promising new technologies used in an inpatient environment. Under this payment method, the add-on for a new technology is equal to the full DRG payment plus the lesser of 50% of the cost of the new medical services/technology or 50% of the amount by which the total covered costs of the case exceed the DRG payment.

According to CMS, IBV technology will primarily be used with DRGs 163, 164, and 165 codes (major chest procedures), which have Medicare reimbursement rates ranging from $9,000 to over $26,000.  In addition, the technology will also be reimbursed under DRGs 199, 200, and 201 (pneumothorax).  These procedures have Medicare reimbursement rates ranging from $3,500 to over $9,500.  With the new add-on payment, these DRG codes could see an additional reimbursement of up to $3,437.50 per case.

Considering that we have seen the IBV implant offered for between $2,750 and $3,000, the additional $3,437.50 payment is good news.  This add-on payment combined with the technology’s ability to lower a patient’s length of stay while improving outcomes makes this technology excellent for both the patient and the hospital.

James Laskaris, EE, BME
James Laskaris, EE, BME, Clinical Analyst — Mr. James Laskaris is a senior emerging technology analyst at MD Buyline and has been with the company since 1994. With over 30 years of experience in the healthcare field, Mr. Laskaris is the primary analyst of high-end OR technology. He also covers issues related to the legislative and reimbursement effect on healthcare and authors a bimonthly “Issues that Matter” publication. Mr. Laskaris received his biomedical engineering degree from Southern Illinois University. His work has been published in hfm Magazine, Radiology Manager and Healthcare Purchasing News.