Overcoming barriers to diabetes reimbursement

Last week we discussed the important role that diabetes educators can play by informing and empowering individuals to manage their condition, thus reducing the disease’s long-term economic burden.  It is clear that the channels at work in the treatment of diabetes are complex; however, ensuring optimal, patient-centered diabetes care requires coordination among the multiple stakeholder groups that influence reimbursement policies:  providers, payers, manufacturers, patients, and advocacy groups. 

More than 220 million people worldwide live with diabetes, and according to the World Health Organization, the number of global deaths from the disease is expected to double between 2005 and 2030.  Because of its prevalence, it is no wonder the disease and its related health consequences place a significant burden on health care systems.  With cost pressure growing in the United States, lawmakers have increasingly scrutinized diabetes technologies, limiting provider reimbursements for new medicines and devices that help treat and manage the disease.

A month ago, we co-sponsored a two day panel discusssion focused on diabetes at BIO's 2011 annual convention, in Washington, DC.   Dan Mendelson, of Avalere Health, discussed many of the public policy and reimbursement changes occuring in diabetes which, ultimately, impact patients and focused on what the community can do about it. Provider cost-sharing and reimbursement policies have significant impacts on the quality of care that patients receive, and unfortunately, can limit diabetes patients’ access to innovative treatments. If you'll humor me for a few minutes, I want to jump into some technical details about some of the policy changes Dan highlighted, defining reimbursement in three parts (Coverage + Coding + Payment = Reimbursement):

  • Coverage -what are the products and services that are available AND eligible for payment
  • Coding - the specific classification of conditions, services, and supplies.
  • Payment - the process and amount.

All three element are necessary for a product to be reimbursed, yet there is no universal standard for how this occurs. To complicate matters further, there are many stakeholders that impact reimbursement decisions, including: providers, manufacturer's, patients, and payers.  Adding to this dynamic are the  new coverage decisions under health reform (specifically in Medicaid and insurance exchanges).

As Dan highlights, we're making progress, but challenges remain:

  1. Costs of health care are growing and leading to increased scrutiny. 
  2. Utilization restrictions and high cost sharing are common. 
  3. Provider reimbursement does not adequately cover the cost of delivering optimal care.
  4. Evolving skills are required as technologies become more advanced (see my blog on Friday about Diabetes Educators).

As you can see, each of the stakeholders play a crucial role in determining coverage decisions for patients with diabetes and they must continue to engage to ensure that patients have access to safe and innovative treatments.