By: Mary Corkins
Read Part 1 of 3 Here
Read Part 2 of 3 Here
The Reimbursement Group (TRG) has helped several medical device manufacturers and biologics organizations develop their field-based Reimbursement teams. It’s not magic, or voodoo, or some other incalculable process. It can be measured. It can be planned.
The Patient Protection and Affordable Care Act (Obamacare) has had a significant impact on patient care elements, but not major impact to reimbursement field team development or planning. Rather, the changes/delays at the FDA have had more impact with these teams, their deliverables, and their timelines.
In the first two parts of this series, we’ve helped define and develop the following:
Part I
- Evaluating product needs
- Internal build-out v. Outsourcing
- Identifying the Reimbursement drivers / elements
Part II
- Developing Goals
- Understanding deliverables
- Strategic & Tactical plans
It’s time to get approval for your budget! Your Reimbursement team will need to support your sales efforts…physician adoption penetration, training schedules, coding needs, and development of coverage with a thousand (give or take) managed insurance plans throughout the United States. Although your specific needs will vary – and we recommend that you contact TRG to help define the line items – the budget is actually a well validated calculation:
Years 1 – 3*:________5.5 to 6% of projected, unadjusted total revenue
Years 4 – 5*: _______3 to 4% of prior year’s revenue
Years 6 – 10**:______1 to 2% of prior year’s revenue
Years 11+:_________.5 to 1% of prior year’s revenue
*Assumption: No additional products added to support goals.
**Assumption: Successful execution of Goals & Deliverables during years 1-5.
As stated in the prior paragraph, these percentages have been well vetted. They work. These numbers will support appropriate reimbursement goals. These percentages support coding applications, sales support, development of materials and memberships, staff salary & compensation schedules, staff travel expenses, insurance policy work, reimbursement-specific incremental legal costs, etc.
If the investment isn’t made into these efforts via budget during the first three years there will be negative ramifications. The best of these negatives would be that the higher reimbursement budget percentage in years 4 & 5 would need to continue through year 10. The worst would be that the Reimbursement team will not be able to support early key deliverables forcing poor coding options and negative insurer policies to become further entrenched. So, what’s it going to be?
More money doesn’t make things happen faster. The processes themselves force the timelines. However, lower resource allocation will definitely delay or even prevent achievement of the launch deliverables. The various “line items” or components support the other components. Dialing back on one item impacts the other efforts. Recognizing that no one has an open checkbook, the selection of specific components, implementation order, prioritization of needs will always be a part of building out the budget. It’s the reason that these percentages are using projected or achieved revenues as the foundation rather than a hard dollar amount.
As stated previously, it is absolutely critical that the Sales & Reimbursement staff develop favorable collaborative working relationships. Sales efforts provide the impetus for Reimbursement goals. Reimbursement support ensures that Sales efforts are possible and reoccurring. Both teams need to have positive exposure to their counterpart, historically. If your Sales Director is referring to yourReimbursement team as the “Sales Prevention Department”, even in jest, this relationship is not likely to develop into a cross-functional team.
Reimbursement Metric #1: TRG recommends that the Reimbursement fieldmanagement staff should mirror sales management, by geography and by title. These two groups sink or swim together. If they understand that at the beginning, these groups are much more likely to grow into a well-functioning field unit.
The De Angelis Group, executive recruiters specializing in experienced orthopedic device/biologics Sales, has a good understanding and respect for this relationship. Contact Josh Sandberg – js@tdg-llc.com 480-609-4864 or Drue De Angelis –dda@tdg-llc.com 480-609-4202. For Reimbursement staff needs, Suzanne Bohen is still your best bet, suzanne@emersonprof.com.
TRG Reimbursement Metric #2: Do not build out your entire Reimbursement staff on Day 1. Hire and train staff as needed in the field:
- The senior reimbursement person should begin at least 1 year prior to launch to assess needs, and develop your strategic and tactical plans.
- Reimbursement Managers – approximately 60 days prior to launch. Specific number will correlate with Sales counterpart.
- Outsourced staff: 60-90 days prior to go live date.
- Internal support staff: 1 FTE (equivalent) per 50 trained physicians (Years 1-3). By year 4, support staff should be 1 FTE per 100 trained physicians.
TRG Reimbursement Metric #3: Reimbursement staff should be involved inpublication goals and efforts as these endpoints impact their goals & deliverables. The reimbursement policy efforts should begin when any two of the following events occur: 6 months national sales efforts, 100 trained physicians, or 50 physicians with at least two patient cases. Any policy efforts that begin prior to this time will not have the necessary foundation to drive consideration, let alone success.
The information provided in this 3-part series contains the foundational information needed to build a successful field Reimbursement team. There are consistencies that apply across specialties, product type, and the technology itself. In addition to these foundational considerations, TRG (Mary Corkins, 224-715-1770) is available to help identify the specific reimbursement elements that unique to your product, or to develop your strategic & tactical plans. We can also develop metrics that are appropriate for your unique reimbursement staff. Contact TRG (www.trgltd.com) for help with building your successful field Reimbursement Team.
