Next time you go to a restaurant, ask if they'll give you the steak for free so long as you pay the staff to prepare and serve it. That's essentially what insurers are asking surgical facilities to do each time they refuse to reimburse you for pricey implants, says Steven Gunderson, DO, CEO and medical director of the Rockford (Ill.) Ambulatory Surgery Center.

We don't have to tell you that a lot is riding on your ability to get paid for implants. Like a falling domino, whether a payor reimburses you for an implant can determine:

• If a case is profitable. It's not uncommon for the cost of implants alone to exceed the reimbursement you receive. Take a shoulder arthroscopy with rotator cuff repair, for example. Dianne Wallace, RN, BSM, MBA, executive director of the Menomonee Falls (Wisc.) Ambulatory Surgery Center, says the cost for the implants in that case ranges from $1,785 to $1,800. Reimbursement is around $1,600. "That rate does not even cover the cost of the implants, let alone supplies, staffing and drugs," says Ms. Wallace.
• Where the case is performed. "We have to refer expensive cases to the main hospital since the cost of implants is higher than reimbursement at the surgery center," says orthopedic surgeon John L. Pinkowski, MD, of the Akron (Ohio) General Surgery Center. He says it's "ridiculous" that implant reimbursement has the power to determine the site of service. "Our strategy is quite simple," says Lynda Simon, RN, OR manager at St. John's Head & Neck Surgery in Springfield, Mo. "If reimbursement covers the cost of the facility plus the supplies, we do the case. If it does not, the case is done at the hospital."
• How a case is paid. One of the most vexing problems with implant reimbursement is that it's extremely variable. At the Rockford ASC, for example, they have multiple arrangements with payors, including getting paid: 1) nothing for implants; 2) 100% of implant cost plus markup; and 3) only after a dollar threshold is met.

"I have always had difficulty understanding the mindset of insurance contract negotiators," says Dr. Gunderson. "We are more than happy to provide implants at our cost as long as the procedure reimbursement lets us make a profit."

As another reader told us, "some [payors] have a threshold, some require invoices, and some automatically deny and will pay once you file an appeal."

Reimbursement strategies that work

Purchasing implants you might not get reimbursed for is a risk you might not want to take. From negotiating carveouts to appealing denied claims to partnering with third-party billers, here are reimbursement strategies you might want to consider.

1. Partner with an implant billing company. This might be the cleanest and surest way to get reimbursed for implants. Here's how the firms work: Typically they buy the implants, charge the insurance carrier directly for all devices used during the procedure and assume the responsibility and risk of obtaining reimbursement, letting you essentially host expensive cases worry-free. Other times you buy the implant, the biller reimburses your invoice cost and then charges the payor.

Lynn Johnson, BSN, RN, CNOR, director of surgical services at OrthoGeorgia Surgery Center in Macon, Ga., often uses an implant billing service for her orthopedic cases. When the biller has a contract with the implant vendor, it will issue her a purchase order that she'll send to the vendor. The billing company takes on the risk of getting paid from the insurance company. If the biller doesn't have a contract with the implant vendor, she says the biller might issue her a check for the cost of the implants.

2. Ask your vendor for comps. Ask your implant vender to comp you a few sets of implants, says Victoria Groeniger, RN, patient and marketing manager at the Advanced Cosmetic Laser Center in Fort Lauderdale, Fla. "Many physicians don't realize that each rep is allotted a certain number of implants to distribute however they choose to their clients each month," she says. "This can offset the total cost of the implants you are ordering."

3. Negotiate a carveout. Some say the only way to ensure implant payment is to get a carveout. Set up a face-to-face meeting with your third-party intermediary to get a better understanding of what it needs to reimburse you for implants, says Ms. Wallace. "You can't negotiate with Medicare, but you can with the contracted payors." As a result of pleading her case at such meetings, Ms. Wallace has convinced a few payors to carve out certain high-cost procedures (shoulder arthroscopies and mesh hernia repairs, for example) for additional reimbursement.

Demonstrate how much lower your ASC charges are compared to a hospital's. "Show them that you can be more efficient and cost-effective," says Ms. Wallace, "and get them to understand the difference between your costs." It helps to get the hospital Medicare payment rate and use it with your request to show that even with the pricey implant, your rate is still below the hospital rate. Ms. Wallace showed up to the meeting armed with invoices that showed, for example, that her facility paid $795 for a urethral sling to tie up the bladder and was reimbursed only around $300 more than that. "Those are real tight margins," says Ms. Wallace. "Remember, they don't include supplies, drugs, staffing or any other costs." Tout your facility's quality and patient satisfaction, as well as its low readmission rate. "Throw all of that in there when meeting with these carriers," says Emilie Keene, MHA, administrator of the Parkridge Surgery Center in Columbia, S.C. "That is the sell."

On those implants you're unable to get carved out, convince your surgeons to use the less expensive ones. "It helps to have all of the figures and educate them to actual cost versus reimbursement," says a facility manager.

4. Appeal to your reps. Tell implant reps exactly what you'll receive in reimbursement. "If they want to do the case badly enough, they will price the implants within reason," says Victoria Caillet, RN, administrator of the Wooster (Ohio) Ambulatory Surgery Center. "Say, 'Hey, I'm only going to get paid $2,000 for this. Is there anything you can do to make your implants cost less than $2,000?' Sometimes, they can't cut the cost. But it has worked." Also ask your vendors if you can stock their implants on consignment, meaning you won't have to pay for them until you use them in a case, says Ms. Caillet.

5. Standardize your implants. Go out to bid on implants and single source as much of your implant purchases as possible, says Joan Shearer, administrator of the Lawrence (Kans.) Surgery Center. One caveat, she says: You must have a physician champion to make this work.

6. Make patients pay. We heard from a facility that makes the patient pay for cosmetic implants — including shipping and handling. Implants used in reconstruction are ordered through the facility. Get pre-authorizations in writing for implants used on workers' compensation cases. Finally, check with the insurance company when the case is scheduled to determine what is covered. "If the implants are not covered, the patient is given the option to pay out of pocket or use a healthcare credit card," says Tara Flanagan, RN, director of nursing at the Ardmore (Okla.) Regional Surgery Center.

7. Pick your battles. Don't get hung up on high-cost implants that you don't do that often. Negotiate with payors so that you receive a high reimbursement for the half dozen procedures that comprise 70% of your cases, and accept a lower reimbursement for all other procedures. Many carriers have a threshold. The implant must cost more than $500, for example, before they'll reimburse for it. "That's OK," says Ms. Keene, "because most shoulder arthroscopy cases can get every expensive. We always meet that threshold."

"The best strategy is to get paid for your costs of the item and to not try to make a profit off of the implant," says Stuart Katz, FACHE, MBA, executive director of the Tucson (Ariz.) Orthopaedic Surgery Center. "Some carriers will offer cost plus 10% for handling and quite frankly, if you can get the cost, I'd give up the 10% and use it to get some higher payments for the actual procedure. You may not use an allograft on every ACL you do since you might use an autograft. If they pay you for the cost of the graft and the screws to hold it in place, when you use an autograft would you rather get $1,800 for the procedure or $1,980 for the procedure?"