U.S. Reimbursement Fundamentals | LSI USA '25

Tonya Dowd  0:05  
All right. Good morning everyone. Thanks for coming to everybody's favorite topic reimbursement, right? Everybody loves the topic reimbursement. It's great to have you all here. As Suaie mentioned, I'm Tonya Dowd. I'm Executive Vice President of reimbursement, health economics and market access at PRIA Healthcare, we are a full service reimbursement and market access consulting firm really focused on the US and based in the US. I've spent my entire career, about 30 years in reimbursement and market access, so I might be a glutton for punishment, or I just might love the complexity of our system here in the US, but we're here to help you really decipher that and kind of uncode it, so to speak. So really great to have you all here. I am here with Charlie Alvarez, and we're going to tag team this today. I'm going to go over just kind of the fundamentals and high level of reimbursement in the US, and Charlie's going to go through kind of details around the contracting piece on the buy and Bill and subscription model. So you'll get a lot out of today. So I like to start out with a little quiz, FDA approval or clearance is all you need for the opportunity to achieve commercial success in the US? False, right? Okay, great, if a reimbursement code exists that describes your product or service or device, you're good to go, and there's nothing else you have to worry about. False, okay, collectively, great, great. We're doing. We're doing great. The market access strategy isn't needed at the early stages at all. It's more of an issue around the commercialization phase after regulatory false, don't be shy. False. Anybody say true? No, okay, good. That's good. And the last, last, but not least, I don't need to worry about reimbursement and the plan, because I'm going to be acquired and somebody else have to deal with it, somebody else's problem. Okay, good, good. So I'm assuming the laughter is false, right? Thank you. Great, great. So you all passed throughout this presentation, we're gonna get into the reason why all of these statements are absolutely 100% false. Okay, so what I always ask question, I always ask the first question of my clients, and if we think about reimbursement, it's not over here on an island in Hawaii, right? When everything else is happening in London, right? It is the fundamental foundation to your commercialization plan, if you remember nothing else from that, that that really is what it is. How is the technology, your device, your product, that you want to have access for patients who can benefit from and how is it going to be paid for? And how are patients going to have access to it? So I always ask, you know, what is the strategic, strategic intent of your product? And a lot of lot of clients I work with don't really know how to answer these questions. Are you trying to redefine the standard of care? Are you reducing the overall cost of care to whom? Are you trying to improve clinical outcomes, again, for whom and what patient population? Is it it, you know, is it a competitive response? You're doing it because you're responding to, you know, competitive issue in the marketplace. Where does it fit in the treatment continuum for the providers who are going to be using your product? How disruptive is it going to be? And this is a really important one, because I think there's an assumption largely that the device that manufacturers are developing or innovators are developing, everybody's going to run to it just because, and that's not the case. So really understanding the incentives and disincentives for the stakeholders who are going to be using your device and technology is really important. What is the unmet need? Is there an unmet need? Does the standard of care currently that it's being used? Is it is it appropriate and is it fine, right? So really understanding what that is and then and then really important. What is the acquisition model? What is the business model? Is it a buy in Bill model where the manufacturer is selling the product to a provider, a hospital, and they're submitting a claim for reimbursement? Or is it a subscription model, where the manufacturer is actually contracting directly with the payer, and Charlie is going to talk about this in detail in the next section. So really, there are two pathways to reimbursement for new medical technologies. The left is, if you you know, if there are existing codes coverage and payment, you're kind of piggybacking off of what's already there. Maybe you have a 510, K clearance, and that's the route you're going to go. Or if you really want a premium price and you need to go right for a new and separate reimbursement pathway, you take the path to the right, and that both of these pathways require evidence, clinical and economic evidence, to support the claims you're going to make for the stakeholders who are going to be using. Your technology. Okay, early planning is critical. I always ask, would it be, would it be advisable to start a merit to start training for a marathon two weeks before the marathon? No, even if you're, even if you're a runner, you would agree that that's not a good strategy. So really, really focusing on, what is the, you know, in the strategic planning process, what is the commercialization, you know, strategy, what is the pricing? Who are the stakeholders? Really understanding the market beyond the total addressable market, we can all get that total addressable market is, you know, 34 billion, whatever it is, but really identifying who the stakeholders are, and what their incentives and disincentives are, and the pricing strategy, reimbursement plan. How are we going to execute this plan? So really thinking about this early on, even in the regulatory and even in the R and D phase, so really early on is important. This is a fallacy. FDA plus CMS does not equal reimbursement and market access. It is not, we are not in the UK where we have NHS, and you know, everything's ready to go once you have regulatory approval. It is very, very different here, and this is a depiction of, really what we're dealing with. You enter into the reimbursement maze, right? You get FDA clearance or approval, hopefully you've strategized early on during that early phase, and then you enter into the marathon or reimbursement maze. It's important to understand how your regulatory strategy will impact your reimbursement strategy and vice versa. So not all regulatory pathways are created equal. If you have a 510, K clearance. That's not approval. It's just a green light to market your technology, your device, based on something that's already in the market. Well, guess what? What if the predicate you're using has negative coverage, it's not paid for. There are no codes. It's, it's, it's, the payers don't consider it to be medically necessary, right? So understanding how your regulatory strategy impacts your reimbursement is critical. Even for a PMA approval that requires evidence that's still not enough, the evidence bar for FDA is much lower than what you're going to need to commercialize and successfully achieve market adoption and reimbursement. Okay, please remember that understanding who your stakeholders are, and there are multiple stakeholders in this ecosystem, in the US, we have payers, we have health technology assessment groups who look at the data that's publicly available in the published, peer reviewed literature that the payers look to to determine, you know, if this, if a technology, should be covered. You have employers. We have an employer based system here in the US. You have coding authorities. And there are many different types of codes. I'm going to go into that in a second specialty societies. They are very involved in either supporting or not supporting your technology, right? And they have, there's, there's a lot of politics at play. The patients, of course, right? And then the physicians and facilities and hospitals really understand this multitude of stakeholders in the ecosystem and how, how each of them will impact your commercialization strategy and your market adoption plan. So value, I always say value is in the eye of the stakeholder, and everybody perceives really the value differently. Okay? If we look at FDA, a health plan and a hospital system, the FDA is looking at how your device, the device itself, is it safe and is it? Does it have safety and efficacy, just the device, right? And for largely a broad patient population, you want your device to be cleared or approved for a large patient population, right?

Tonya Dowd  8:54  
The payers want to know the impact on the clinical and economic outcomes for the patient that the device is intended for, and they want to know a narrow, the narrow population of the studies that you are going to do, or you have done, and what the impact on the outcomes have been in the published, peer reviewed literature, very, very different perspective, right? And that's what I say. When I say FDA, the bar for evidence is way down here. Payers and for market adoption, it's much higher that the health care systems, the hospital systems, Memorial care is a local system here in California, they want to know, is there adequate reimbursement to bring in the technology? You know, is it going to increase the volume of procedures? That might seem counter intuitive, but the it is really a base. We have a volume based system here. Let's, let's face it, and it's largely fee for service. We talk about value based care. It's not, it's not the norm here in the United States, understanding if there's a cost avoidance or minimal budget impact. So having that economic, economic, you know, economic benefit. For the stake, for the hospital stakeholder is important. Is it enhancing the reputation? Think about the Da Vinci robot, right? Isn't everybody's got a Da Vinci now in all of the hospitals. So it enhanced their reputation. And is there strong physician demand? There is. There's a couple of philosophies here. A lot of people say there's, you know, physicians don't have a lot of say in whether or not something's brought into a hospital, but they but they do, they still do have some influence. So really understanding the different perspectives of three key stakeholders is important in God, we trust all others bring data. Okay, I can't say it enough data, data, data, and not just economics, it's the clinical outcomes. Again. How is your technology impacting clinical outcomes? And then let's monetize those clinical outcomes so we can look at what the value is from the economic standpoint. The value framework This is from we This is an excerpt from the from AdvaMed, and we also use this with med technovator, if anybody's been through that program or is familiar. But looking at the different again, the different stakeholders, as I just mentioned. And what anticipated, you know, what the anticipated impact is, the metrics that can we can use to support that anticipated impact from the value standpoint, and what the evidence generation plan is going to be to show, and, you know, to show and demonstrate that impact really, really important. And it's not all about just having an RCT necessarily real world data is perfectly acceptable. And actually there's a CMS has proposed a rule that allows for the use of real world data in making decisions. So it's coming, you know, it's coming that way, and just having that, you know, an evidence generation plan for the long term is really important, kind of getting into the reimbursement fund fundamentals. Notice, I haven't really even talked about reimbursement yet, right? Because it's all of the other things that I was talking about, which is laser foundation. But if we think about reimbursement in the US, just from a fundamental standpoint, and you've heard this before, it's the coding, it's the coverage, and it's the payment and I would say there's one more, it's the benefit category. What benefit category is your technology going to fall into? Is it a durable medical equipment that's going to be used in the home? Well, you that's going to impact how it's going to be coded, how it's going to be paid for, and how it's going to be covered. So understanding the benefit category is important. And again, going back to coverage, it's a determination by the payer of whether or not your technology is reasonable and necessary or medically necessary for the intended patient population. Then we can talk about coding. Coding is just a means to identify a procedure or a device for payment. It's a transactional it's a transactional identifier, if it's covered. Okay, so remember again, going back to the statement I asked earlier, don't go on on Google or chat GPT and look for a code that looks like it describes your technology that is not your reimbursement plan, please. And I hear and I hear this a lot from clients. That's why I'm trying to reiterate this point, because it's so important. There are oversight different code sets. Let's talk about coding right. There are different code sets. So what kind of code are we talking about? We have and they're in their their their their organ. They're overseen by different bodies. So we have ICD 10 diagnosis codes. Those are used worldwide, right? And those are, those are established by CDC and CMS. And then we have procedure codes. Those are, there's two types of procedure codes, CPT, which I think most people are familiar with, which are actually owned and trademarked and edited by the American Medical Association, and it is a 90% 90% politically charged process, 10% politics. And I see some people shaking their heads, because maybe you've been through the process. Maybe you know, you know fellow colleagues who have been through the process. But I can't stress that enough, it's very politically charged. ICD 10. Those are established by CMS, and those are used primarily for inpatient procedures. Okay? And then Hix fix codes, those are also established by CMS. So understanding what code sets your technology is even going to be subject to, and who's organizing them and who's assigning them is really, really important. So again, not all codes are created equally, and they're owned and edited by different, different organizations. If we think about the, you know, the from a from a payer standpoint, we always kind of, I think the the commonality is to go to Medicare, CMS, and think about Medicare as the primary payer, but in all essence, our our our reimbursement system, or payer structure here in the US is employer sponsored. So think about the J and JS of the world, the Ciscos, the Safeway, the Amazon. They are, the end they are the entities funding the health care for their employees. Okay, in the US, then we have individually purchased plans, Medicaid, 21% End, and then Medicare, it's only 15% although CMS does establish payment policy typically. But one thing that's happening, and I just want to make this point, is the growth in the Medicare Advantage product. So we have Medicare fee for service right for 65 and older, or if you have ESRD or you're disabled, but more this, the trend of enrollment in a managed Medicare plan, Humana, Silver Sneakers, Aetna, they all offer them, is growing significantly to where right now, 60% of Medicare beneficiaries are in a managed Medicare plan, meaning that it's a commercial plan. There are, in some respects, statutory requirements of what they have to follow in terms of coverage and other things. But other than that, they can set the rules from a coverage standpoint, payment standpoint, so you're really dealing in all essence. My point here is to really understand that when we say, Oh, my technology is largely Medicare, it's a CMS thing. No, it's actually a commercial payer, pay or play. So just keep that in mind, this is growing. It's going to continue to grow as we move forward. So really understanding that payer mix is critical. I know we're kind of running a short on time here. But what do payers want in terms of, you know, outcomes and evidence? They want to know again what the health outcomes are for a very specific patient population, or, we say, patient phenotype. They want to know what the economic outcomes again are for a very specific patient population. They want to know the documented impact on the technology, again, on the outcomes relative to the standard of care, what already exists or what's being used today. And they want well designed, published studies, ideally with comparators. And they want appropriate clinical endpoints and fit for purpose studies. So that's kind of a newer, newer structure right now that's being talked about a lot with FDA and CMS, fit for purpose studies, real world evidence, really kind of culminating the clinical trials and real world evidence together to make policy decisions. So again, remembering that FDA evaluates the device and payers evaluate the outcomes. So just really thinking about that, I keep driving home these, these, you know, themes, common themes, post market studies. Registries are great. Investigator initiated studies, really great. Your KOLs, your principal investigator sites, you want to continue those, real world evidence, retrospective claims analysis and and really, you know, looking at patient related outcomes, interest of interest to payers. And you can ask payers preemptively, what are they looking for? Where are the gaps in the evidence? We do that with clients, where we have a payer advisory board, and we do a gap analysis on what evidence is out there and what's missing for a very specific technology. And we ask the payers, help us, help us really, really develop the clinical study protocol and the evidence generation plan so they are available to you and to provide that feedback. Voice of Customer feedback,

Tonya Dowd  18:10  
I am going to wrap it up here and let Charlie go, because I don't want to run short on time. But I did want to make this at this point, and this was from the the Stanford group that looked at new and novel technologies and the number of years on average it takes to achieve consistent and reliable coverage and reimbursement, and it's about 4.7 years. Okay, so this is not, this is not, as I mentioned before. It's a marathon. It's an iterative process. It is not something that happens in six months okay for new and novel technologies. So really having that plan in place early on, and knowing what's going to be needed to execute that plan, and the and the capital, the investment you're going to need to really execute the plan is is critical, and your investors are going to want to know what is the plan, right? Is it? Is it? Let me see a show of hands, how? What is it? The number one, two or three question that comes up from your investors. Number one, okay. Number one, is it? Number two, yeah. Number two, and it's, it's definitely in the top three. What is the plan? Beyond, I have found a code on Google that looks like me, that's not your reimbursement plan one more time. So common mistakes really quick, full focus on regulatory and R and D path, with no attention to the reimbursement and market access plan, not understanding the patient journey. I mentioned this before, current workflows and the technology's value, not knowing your stakeholders, and kind of applying a one size fits all to the value proposition, not having an end to end generation plan beyond what's required for FDA clearance or approval, conducting early market access with your friends and family. Right your scientific advisory board that you pay, you pay them right to tell you maybe what you want to hear you need to go get the. Devil's advocate, you know, perspective. So that's that's really important, and developing the reimbursement and market access strategy based on coding only. I don't want to beat that dead horse, but I'll say it one more time. So those are the that's kind of the end. I'll let Charlie take over. 

Charlie Alvarez  20:15  
Thank you. 

Tonya Dowd  20:16  
Thanks, Charlie. 

Charlie Alvarez  20:16  
Thank you. So I'm kind of like the old movie Back to school, or Rodney Dangerfield is like, well, let me tell you how it really works, right? So I'm going to be a little bit more on the real world data. I've been in healthcare since I graduated from Florida State, the Harvard of the south and and and have been involved early days at cardio net, which is now biotel Phillips, and helped build the CPT code for MCT. And I did the same thing in sleep and and now I'm in neurology and EG, and we're doing the same thing there. But I know what you all are thinking. It's celebrity guest speaker Phil Dunphy from Modern Family, but it's not, it's just me, Charlie Alvarez, so I literally have signed autographs in the past with him. So any idea how many insurance plans there are in the US? Well, it's grown. There's over 1100 and then when you look at all of the different types of plans, one individual plan, if you're billing the insurance company directly, could have multiple combinations, an HMO, a PPO, so you literally could be billing 1000s and 1000s of claims just with the plans that are out there. And it's complicated, right? The 10 largest health plans are out there. And as Tonya mentioned, you know, CMS is one part of it, depending on the age group of your product as well, right? So, you know, these are the top payers in my previous experience. I used to look at a reimbursement model by state, and I color coded them red, yellow and green, depending on did I have CMS coverage, and could I get a major pair in that state, like if I had united, for example, or Blue Cross, Blue Shield and CMS, then maybe that was a green state that I would go into. And it takes an investment, not only to get the CPT coding, but even once you have the CPT coding, it takes investment to be able to make sure that you understand and go after these managed care contracts, or if you're billing, you know, in insurance, or if you're doing a subscription model to the hospitals. It gets more complicated, because hospitals also own health care platforms, and they have their own insurance companies now, outside of Kaiser, a lot of hospitals, you know, insure their own employees, and also they negotiate with local companies and to insure them. So, you know, there's over 6000 hospitals in the US, and when you look at, you know, these are the top 10 hospital owned insurance companies. So this is also super important. And by the way, anyone that wants any of this data afterwards, it's hard to take pictures of this. Just see me afterwards. I'll be happy to share the slides with you. So you know, it's just important to understand that, you know, almost 10% of the population is covered by a lot of these hospital systems as well. So when you're thinking about your plan and what you're doing by state or by market, it's important to look at these, these types of solutions also, because they're important for you to to get a foothold in, you know, in a marketplace. And as Tonya mentioned, it's, you know, sometimes you need my companies. My philosophy has always been, I need three legs of the stool, and that is, it has to be better for the patient, it has to be better for the doctor. It has to be better for the insurance company, right? And if you have those three legs of the stool, then you're, you're going to be successful, or have a higher prevalence of being successful. The key is, is what, what is important to the insurance company? And that's what you have to understand. Because I present, even though I'm the CEO of the company, I still present to payers all the time. I joke that I'm the VP of managed care in my company, and it's something that I do as a as a CEO, because I think it's important for them to see that I take it that serious of getting reimbursement and meeting, meeting with these hospital systems, and understanding what's important to them. Because everyone has a little bit of a little bit of a different a different plan. Sometimes we're doing pair payer meetings, and there's a doctor on the call, and sometimes it's all finance, right? And that's going to give you a good indication of of how you need to approach these, these payers. So there's buying bill, right? And that is where these providers are setting up their own patients. They're monitoring on patients where they're they're billing the insurance company directly, right? And so you're selling to either a hospital system or you're selling to a physician office, and they're doing the billing, right? And so what's important about that is you still need reimbursement, right? They need reimbursement in order to be able to bill the. Insurance Company, the physician bills the hospital coverage could be through a DRG. So if you're selling into a hospital, they are not billing insurance. Typically, they're covered by whatever their payment plan is. So the reimbursement and the ROI is going to be a little bit different to a hospital system that billing a DRG than to a physician that's billing insurance. The opportunity here is, it's typically the fastest to market, and there's a steady stream of reimbursement the top the hard part is, is contracting with a hospital system and having to go through the clinical side, having to go through contracting and having to justify it the same way you do with with a payer. And then the important thing is, what's important to to this hospital, right? What's important to them is it length of stay. You're shortening length of stay. Is it transfers? You're preventing transfers or encouraging transfers. And is there revenue built in for this, for this model, for these systems as well. The second one really is direct contracting. That is where you are billing the insurance company directly. And that also is, you know, tends to be a very viable way to do business. Again, you need reimbursement. It could be a subscription model. But one of the key things here is that you've got this consistent revenue stream, right, and that allows you to be typically, it's more profitable that way. The problem is that you have to build out the infrastructure. When I, you know, took over this company, we I brought in five people to just do managed care contracting. Now I've had a lot of experience in that. Today I've got 95% payer coverage. It's the highest I've ever had in any of my businesses. Even cardio net and some of the cardiac companies that are out there that have been around for, you know, 20 years plus, probably are in the high 80s of reimbursement. You're not going to win over every payer, but if you have the right strategy and understand what's important to them, I'm going to show you a few sample slides that I use in my in my business, because you have to hit all different aspects of it. And again, the ROI on this is what's important to the company. Is it the service piece of it? Is it turnaround time? Is it revenue? Is it data? What are the clinical needs that you're trying to help them establish as well? The challenges with reimbursement on a payer side is you have to dial for dollars. It is payer by payer by payer. United Healthcare, you can get a national contract Aetna, you have to go state by state. So what we try to do is is use references for each of the states that we have a contract in and get introduced to them. But you have to do it literally, state by state. So I am typically on calls at least two three times a week, 45 minutes to an hour with these payers explaining the value of our service that we provide and getting them to participate. So for me, you want to keep this is just kind of a sample agenda that we use when we're trying to sell either to a payer or to a hospital on the reimbursement you want to have, obviously, the purpose? What's the solution? We always start with real, real world data and some case studies. You know the why? Why is this important to them? Or why is this important to the patient? Care, references and credibility? What's the disorder? What's the clinical early detection value? What are the financials? There's tons of data out there that you reference, and a lot of them are going to want to see that data, so it's important to have that. Then you've got the hospital versus the idtf conversation. I'll show you a slide on that that'll make that a little bit more clear. I'm also very, very transparent on our costs, because at the end of the day, your reimbursement level is going to be, if you're building a code, the reimbursement is going to be dependent on what it costs to service that patient. So there's a little bit of a slippery slope, right? Because in healthcare, sometimes there have been markets and there have been disease states that as the costs have come down, so has the reimbursement. And so there's a little bit of of a slippery slope that you're on and trying to manage, how do you become more efficient and more profitable, but but also, how do you not affect the reimbursement? And that happened in sleep, where all of a sudden there were so many easy ways to do sleep, and there's like rings. Now you could use and little patches, and the reimbursement just has dropped tremendously. Cardiac was able to sustain, I would say, a higher reimbursement. I'm in epilepsy now, epilepsy has sustained that as well. So I'm very transparent on what it costs to serve, and I take it right off of the CPT code based on what is driven the CPT code. And what I have to do that is how I manage what my costs are and how I present that to to the payer. So this is kind of a real world evidence example that I like to use. We Mayo Clinic is one of our hospitals. I'm in epilepsy. We test patients in the home for seizures and. Um, a hospital market, and the hospital environment isn't conducive for this test. We test the patient in the home. We're able to capture this real world evidence. If we need physicians that are in to get engaged in this we have we add them as well. We show them exactly all the steps that are required to do our service. So again, very transparent with these payers. They appreciate it. You're educating them on what's happening in the marketplace, and I think this is one of the things when you're building a relationship. We always do stewardship calls. So every year with our major payers, we go through all the data that we're that we've been providing, and share with them, the savings that we've given them, or the clinical advantages that we've given them, you know, just to keep them in tune with what's happening in the marketplace. You know, the rationale typically with, you know, there's, there's deserts in this country, there's neurology deserts, there's sleep deserts, there's cardiac deserts, where there's swaths of of of this country, where there's not specialists, they tend to aggregate in in in larger academic institutions, right? So there's a value in some of these markets where you need to be able to place them. So, you know, not enough beds to cover, sometimes the product that you're trying to cover. So all these things are just important to make sure that you share and you understand the value that it brings to the business, the importance of early detection. What are the drivers there? It all makes sense. Everybody has this. But when you spell it out to the to the payer, the at the end of the day, you can have the cure for cancer, but if they don't get paid for it, the doctors aren't going to do it right. So you have to explain to these payers, to the hospital systems, what's the value of early detection, and how does that equate? And again, for your disease states, I'm sure there's, there's tons of data out there. You just need to be able to position it in a way so that they understand this is part of the value prop that you're that you're giving them the economic costs, right? So all the different articles and I have multiple slides on this, depending on who my audience member is, is it a hospital? Is it a payer? Is it a large payer? Is it a small payer? Is it an employee? Owned payers at a hospital, own payer. All these things give you different data points that you need to understand as the leadership of your companies. You need to be the ones that are kind of pitching this, again, with with the managed care experts. What I love about Tonya and PRIA Healthcare is that they, they can help give you the blueprint of this, and you need that kind of assistance. And then once you have the understanding of how to get there, then it's, it's up to you to make sure that you, that you drive this again, the prevalence, right? So what are the guidelines of your industry? What are they saying? Understanding the guidelines is super important, because a lot of times when you're going through CMS, you're getting FDA, you have to follow certain guidelines, but there all should, should be a tail on what that reimbursement is, so you're not having to duplicate clinical trials, because they both should, should, whatever you're doing for FDA, there should be some tail that drives reimbursement, because they're going to want to see clinical trials. But what's the prevalence? Why is this an important disease state? And what are the guidelines that are that are at the top level of these trade of your trade organizations, and what are they saying? This is an important slide. This goes through what happens in the DRG versus the idtf. So my disease state, what I'm trying to do is I'm trying to see the sicker patients and the less costly environment, right, the less sick patients and the less costly environment, so the sicker patients stay going to the hospital. And that's kind of the model here. And you could see when the codes came out, the bottom one is the neurologist and epileptologists that are ordering the studies of the run of the mill epilepsy. And you can see in the hospital market that purple line that's coming down, those are the less sick patients. So basically, what I'm demonstrating to the payer is the code is working. The code is working because the less sick patients are going to be done in the in the less costly environment, and the sicker patients that need to be seen to the hospital are done seen in the hospital. And then I go through and talk through the difference of the cost, of what it's going to cost them at the hospital setting versus in a, in a in a home setting, and I am straight up with what our code ask is, and sometimes it's higher than what Medicare is paying, and sometimes it's higher than what the typical payer is paying. But I don't just necessarily look for a contract that everybody's gonna go through, I ask for my own direct contract with these payers, and sometimes you ask for carve out codes, where your top codes are pulled out of the contract and you're paid at a different rate for them, and everything else is covered. And that way your competitors maybe aren't going to get the same type of. Reimbursement that you are because you have done a better job of explaining the value of your product and your solution. And then I go through what my costs are, and I explain based on how the CPT code is built, and based on what the payers and what the local coverage determination or the national coverage determination, what you have put out there, this is what it costs me to run my business. And so that's why we ask for, you know, these, these codes, and typically, when you're billing reimbursement, you're not making 5060, 80, 90% margins you're making it's a volume base a lot of times, right? So I need to cover my costs, and I need to be able to make a profit, and I have no problem sharing what my costs are with them and what that build is so wrapping up here, then we'll leave some time for questions in healthcare. If it makes sense, don't do it, because it makes complete sense that you should be able to educate a doctor on on your product and take them to lunch or dinner, but you can't do that stuff, right? It makes complete sense that you should have a fair, low price, but the lower price, the worse in healthcare, because it's inducement they feel like you're, you're, you're lowering your price in order for them to order more studies from you. So it's the one, it's the one industry where you want to try to raise your price, and sometimes you have to pay a third party to do a fair market value assessment of what you should be charging, right? Because you have a charge master. If somebody's gonna pay you direct, you have to have a certain price, and then you have payers. That's why, when new products are coming into the market and they want to go, they get FDA, they don't have reimbursement, they want to go direct to the consumer. They want to go direct and sell direct. It's always a problem, because you can lower the price of your reimbursement because you want to get more volume out there, versus having a fair price. So it's a slippery slope, and you really need to get advice of companies and people like Tonya or an attorney before you, you you go into that marketplace because it makes sense. Don't do it. Relationships are key. It's important to build relationships with payers. They're normal people. They they have a job to do. But you know, the companies that go out there and build relationships, I think, are better off, and we've had moments where a Medicare Mac has cut rates, and there's commercial insurance plans that are tied to that Mac in that state, and my business has been protected because I have a relationship. I gotta pick up the phone and talk to them, and it takes time. And as a leader in your company, you should plan on doing that. Invest in a managed care team. It's the most important part of your business. If you're in here, it means you're you're focused on reimbursement, so it's going to be one of the most important parts of your business. I would invest in a good Managed Care team at the end of the day, do the right thing. The reason why it's some companies will find a payer or CPT code that they fit in, right? And it kind of sounds like it, and I'm gonna go ahead and Bill that, and you're gonna get paid for it. No doubt you'll get paid for it, until you don't get paid for it. And when you don't get paid for it's because you've hit the radar right? Typically, you're gonna hit the radar of an Aetna or united, and they're gonna audit you, and then you're gonna have to pay all that money back. And sometimes they want interest, right? And so just because you get paid on a code doesn't mean that you're billing the right code for the right reasons. And so one of the things that we've also done, which is super important to get paid by a payer, you have to have clinical notes from the physician or notes that justify why you're billing that particular code, and it's important that, because the payers are going to try not to pay you, right, we've had some major incidents that have occur in the last year. Payers are under under the gun right now, but if you have the qualified team that's looking at what are the requirements for that payer, and what are the notes that are coming in from the doctor? The clinical rational for that that you want to have a clean claim going out to these doctors. So all these things are super important. You know, we don't have a ton of time to be able to go in that, but I think at a high level, it gives you an idea of how to manage in the in the marketplace. So anyway, appreciate everyone's time. I think we have a little bit of time for questions. If anyone has any, if anyone has questions, they want you to come up to the mic here to make sure, because they're recording this. So thank you very much.

Audience Question  39:31  
So just curious, you said that you can't just think that you're going to get acquired and that whoever acquires you is going to have their own strategy and develop that strategy, do all the work for you. I'm just, I guess, wondering if you could expand on that, if you develop a strategy, you start the process early, you have a well defined strategy, and then you do get acquired, isn't there a decent chance that, whoever acquires you is going to sort of, like, rip up a fair amount of that work and do it in a way that they think is better or optimal,

Tonya Dowd  40:07  
not necessarily. And this is coming from the perspective of I've spent 12 and a half years at Johnson, and Johnson, we acquired companies all the time, and even looked, I was on the team that looked at companies to acquire, and reimbursement, of course, was a big component of that, they might rip it apart. But they often, sometimes, if they don't have that assessment piece in place, and that step, they might not know necessarily, because, you know, there's the wrong teams may be looking at the at the reimbursement strategy, so they've bought something that might not be reimbursed. So they have to still go through the, you know, the hard work. But I think what I was trying to parlay is investors more and more want to see the proof. They don't want to just see that you've got, you've looked at a code and that's your reimbursement strategy. They want to know, because they do know they're more sophisticated than ever. We work with a lot of investors at PRIA, but they want to know what is your plan, because they know what's going to be a long plan. And they want to see oftentime, more often than not now, they want to see the proof. They want to see proof of concept. So they want you to commercialize first and see that it's working and that you're doing what you said you were going to do, and that that strategy is, is kind of, you know, taking taking hold. That was what the point I was trying to make, and that's, that's what I would say is, is, but I do, we do work with a lot of clients who kind of have that have that thought process, or have that thought process when they come to us that we found a code and somebody else is going to acquire we're going to be acquired before we have FDA clearance or approval. So it's not our problem that can be our problem.

Charlie Alvarez  41:41  
And I Yeah, and I promise you, whoever is looking at acquiring you, they're going to do a deep dive on the reimbursement side. Yeah,

Tonya Dowd  41:48  
they should, and they should, which some companies don't, but they should, yeah, so just thinking about that. Great. 

Audience Question  41:55  
Thank you. 

Tonya Dowd  41:55  
Good question. Yeah,

Audience Question 2  41:59  
great, great talk. Charlie, wonder if you could offer some advice to startups in selecting a reimbursement consultant, and if you'd be willing to share what are some of the leading other than Tanya. So leading reimbursement consulting firms to be looking at, yeah devices. 

Charlie Alvarez  42:16  
So in my past, we had, we have worked with attorneys on the actual kind of understanding the CPT code and the and working with CMS or some of the payers, some luminaries, typically, some of these attorneys, these law firms, have had previous people that work for CMS as part, as part of them, I think consulting companies like PRIA are great to help you align and make sure you're on the right path. Check all the boxes to make sure you're not missing anything. And then I've typically invested in people now, because I've been in the business a long time, I have people that I've brought with me from company to company that have that level of expertise, and, and, and so it's, it's, I think it's important to make sure that as you're building your company out, you're building your, you know, your budgeting that you do, you know, add some of that, those budgetary dollars for people that are in there, because once you have Pair contracts, you need a credential every year. Every three years, you need to keep those contracts, you know, in place. I mean, that's a whole nother topic of making sure you're accredited by state. And you know, if you're an ID TF, what states are you in? You know, you can't chase reimbursement. You can't have a, you know, an ID TF in Northern California, because you got great, great, you know, reimbursement there. And then you have one. And then you have one in Philadelphia, because you got great Medicare reimbursement there. And you have one in Wisconsin because you have great, you know, Blue Cross, Blue Shield. So, you know, typically, an attorney is going to give you, you know, an a good basis to stay compliant.

Tonya Dowd  43:56  
And I'm going to plug in, put in a plug for PRIA here, just real quick. If I could, I would say that that that reimbursement strategy is not not an academic exercise. It is a pragmatic exercise and and just making sure that you have a good firm and a consultant that really looks at it that way, not I'm just going to go get you a transitional pass through payment because we can, but really understanding the why and how that fits into your business model. So that's what I would say. I am limited time I know so thank you, Susie. 

Charlie Alvarez  44:27  
Thank you.