Anyone who's been exposed to the issue of medical reimbursement,
came across the phrase "DRG code." (DRG stands for disease-related
group.) Indeed, as Amir
Inbar of Mediclever explains,
DRG codes revolutionized reimbursement principles of healthcare systems in
the Western world.
This article (the first in a series) describes the significance of DRG codes,
the way in which they are set, and how understanding them can help Israeli
companies seeking reimbursement for their products abroad.
Following sharp increases in healthcare spending in developed
countries, a new cost-effective reimbursement mechanism was called for.
During the last 30 years, hospitals in developed countries were
gradually transferred to a DRG-based reimbursement scheme.
What Is a DRG Code?
A DRG code is an alphanumeric code that
classifies patients into certain "disease groups" according
to clinically meaningful criteria (e.g., patients who have had a heart
attack); and
assigns to each patient from the aforementioned disease groups
the cost of the resources required for its treatment in a hospital and sets the
relevant reimbursement sum for the hospital.
It is important to note that the DRG's reimbursement sum is the same for all
hospitals treating patients from the same disease group or DRG.
The Importance of DRGs
The DRG's reimbursement sum that the
hospital receives for each reported DRG should cover all costs associated
with the patient's treatment, i.e., everything from the
salaries of the medical staff, to medication, to use of hospital's facilities,
to the costs of purchasing and using the medical device
itself.
Therefore,
an Israeli company interested in selling a new medical device could convince
the hospital to purchase it only if the existing DRG sum covers the cost
of this device and does not worsen the hospital's profitability as compared
to the current situation. In cases where the cost of the new device isn't
"covered" by an existing DRG, the hospital will be reluctant to purchase
it. In such a case, the company could try to increase the DRG's reimbursement
sum or aim to develop a new DRG, suitable for covering its new device.
In the second part of this article we will discuss the way in which the
reimbursement sum of a DRG code is set and its implications on the reimbursement
of a new medical device.
About Mediclever Mediclever
manages end-to-end reimbursement projects for Israeli companies selling medical
technology products in the United States and Europe.
Mediclever identifies the availability of existing reimbursement codes (relevant
to the product), and in case such existing mechanisms
do not exist, Mediclever outlines processes and criteria for obtaining coverage,
including the development of new or modified codes and the establishment of favorable
coverage guidelines for such codes.
Mediclever appoints an outsourced reimbursement project
manager for each Israeli client. The manager works at the client's site and leads
the leading the reimbursement project, which saves the company from
hiring and training a full-time reimbursement manager.
