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Market Updates

Reimbursement Scenario in the US

June, 2018


Healthcare situations across the globe are finding different ways to limit their increasing expense and is forcing manufacturers to diversify and put pressure on the prices of medical devices globally with cost-effective benefits. The opportunities for health insurers especially for people aged above 65 (also known as baby boomers) are gaining advantages from the private to government-offered Medicare in 2018. The reimbursement coverage offered by Medicare is expected to project to cover more than 21 million people with high quality customer experience.

Reimbursement Scenario in the US

The reimbursement in the US is primarily based on a mix of private, public or third party insurers where the cost of care is shared by government and individuals. The medical insurance in secured through different commercial plans, which is sponsored by the government or the employees. Premium and private insurance plans cover different percentage that has indemnity plan and focusses on health maintenance organization. There are more than 200 Americans cover under private health coverage and the trend is increasing towards self-insuring that will focus on specific diseases. Medicaid and Medicare are the sponsored programs by the government offering elderly and disadvantaged individuals. Medicare is the single largest payer in the US and has significant role in diagnosis where most of the diagnosis are paid without explicit policies. This falls under National Coverage Determination (NCD) and Local Coverage Determination (LCD). This is coverage is financed through payroll taxes, insurance premiums, and government financing. Medicaid offers insurance to qualifying people who cannot pay their own medical expenses covering almost everything from hospitals stay, doctors visit, prenatal care, emergency room, and prescription drugs.

The presence of potential customers and intense competition among the insurers in Medicare is helping the industry to grow strategically by providing customer centric approach to tech-savvy individuals. The focus from CMS is to provide high quality Medicare advantage healthcare plans and prove their performance to satisfy millions of people. Most of the US consumers are growing old and ready to use digital devices at home and visit the physician virtually with required medical history details. For instance, the percentage of patients who would like to get consulted virtually to have a pacemaker checked at home wirelessly if it costs less than a traditional approach. However, the government shows interest in providing benefits for individuals but demand lengthy documentation to validate the procedures. Further, post-operative issues and diagnosis will not be covered if the individuals require replacement. The Affordable Care Act mandates Medicare to provide insurance coverage. This act also imposes an annual federal excise tax on certain medical device manufacturers and importers.

Medicare Reimbursement Policy

The Centers for Medicare and Medicaid Services do not have specific national coverage options for various diseases and the coverage facility depends mainly on local Medicare contractors. However, the regional coverage policies differ in each state. Individuals are recommended to check with Medicare contractors whether a local coverage determination has been assigned to both procedures. The patient has to refer to the insurance policy to provide detailed medical conditions and indications for necessary policy coverage.

Private Insurance Policy

The coverage of medical procedures that vary by insurance plans and third-party payers will have significant impact on the insurer as few selected diseases or conditions may bot be covered under private insurers. There are many private insurance agencies have their own reimbursement policies and requirements that will have strong impact for individuals failing to get covered, as they have to bear from their own pocket to pay medical bills. However, the individual has to go through the terms and conditions of coverage with the private payer before undergoing the procedure.

- Azhar
Healthcare Market Research Analyst
Infoholic Research