Download Reimbursement: Surviving Prospective Payment as

Reimbursement: Surviving
Prospective Payment as a
Recreational Therapist
Chapter 19
HPR 453
Challenges of Healthcare
Increasing challenges and pressures
regarding financing services
 CTRSs must be competent in financial
management and accountability of their
treatment services
 Demand for validation of tx effectiveness
and efficiency is vital as healthcare $$
become more precious
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Windows of Opportunity
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RT not included as a rehab service in the Social Security Act
In 1990s the language the outdated language was simply
updated so access to RT was still limited
DRGs in 1994 by American Rehabilitation Association and
1997 Balanced Budget Act prospective payment system
(PPS) bundled services for more flexibility
Move from provider-based specific to outcome-driven
bundling
Recognizes offering the most effective mix of tx based on
medical judgment of client needs
Medical and rehab services must
demonstrate effectiveness and efficiency
to be viable under the changes
 Identification and coding systems have
created opportunities for RT
 3-hr screening criteria (3-Hour Rule)
 Partial Hospitalization incremental billing
 Skilled Nursing (MDS 2.0 then 3.0)
 Rehab PPS
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Measuring value of RT is solely on benefits
delivered to patients
 Must enhance value of services at
reasonable cost
 Labor, resources, technology are primary
cost components of any service
 Lower average salaries under a capitated
reimbursement system are a marketing
advantage
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Durable and nondurable resources are
nominal in cost
 High-touch, low tech caring profession
does not routinely rely on expensive
technology for facilitating effective
outcomes
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Balanced Budget Act of 1997
Goal- Reduce the spending of healthcare $
 Mandated reduced federal healthcare $
 Tied payment rates to cost in
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Skilled nursing
Outpatient hospital
Home health
Comprehensive rehab
Specifics on pgs 309-310
Overview of Prospective Payment
Payment for med/rehab services at
predetermined price calculated prior to
service delivery
 Based on statistically determined price or
historical costs
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Price-based system
Rates are set in advance
Price is inclusive of all services provided
No additional payment or settlement will occur
Current year’s actual costs do not impact price
established
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PPS is based on 4 principles
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Cost containment – hospitals must closely
manage both revenue and costs
Quality – safeguards include audits and
surveys are 2 methods
Access – maintain access to medically
necessary healthcare services
Beneficiary Centered – based on specific
resident needs based on resources used daily
(RUGs)
Price-Based vs. Cost-Based Payment
HC facilities no longer establish price for
services
 Now the buyer arbitrarily sets the price
 A more balanced system is needed for the
future
 PPS comes in 2 different designs
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Per diem – skilled nursing – how much per day
(day to day service cost)
Per episode – hospital and rehab – discharge,
admission or diagnosis
Definitions
Reimbursement – recovering the costs of
resources used
 Coverage – Identification and inclusion as
a tx service within terms of a managed
care contract/plan
 Prospective Payment – payment for tx
services at a predetermined price
calculated prior to delivery
 Retrospective payment – cost is submitted
after service delivery
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Routine service – services required by all
patients – predictable and manageable
 Ancillary services – services specific to
patient need – differ in scope, duration,
and intensity for each patient
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Evolution of Payment and Coverage
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Fee for service
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Provider controls price – bartering for services
in “old days”
Boom time for hospitals and healthcare
Less frequent today – managed care has
replaced to cut costs
Implications for RT
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Manager must understand system to account
for every $
Tx and services must show outcomes
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Examples in RT can be found but vary
across the country due to lack of
knowledge, misinterpretations of
guidelines or resistance to change
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Discounted Fee for Service
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Negotiating price-setting process between
provider and payer
Can be accomplished as identification of a
provider and assurance of increased business
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Implications for RT
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Must have fee-for-service system in place
RT has traditionally lower direct cost so can
maintain a reasonable net margin
Using group procedures with reasonable
expectation of improving patient’s condition
using a group design
Example – Aquatic Therapy for a school district
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# of pts, duration of tx, Frequency of tx, school
personnel assistance with pre and post-pool
functions, presence of school personnel in pool
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Per Diem
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Daily charge vs. charge per procedure
Fee for service is ordering from menu…Per Diem is
eating the buffet
Implications for RT
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Increased emphasis on interdisciplinary team
Coordination to avoid duplication of services
Cost-effective mix of tx services
Education for inclusion of RT as covered service is critical
for service manager
Licensed skilled nursing settings are driven by Medicare
and Medicade per diem reimbursement
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Capitated Per Diem
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Implications for RT
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Under per diem if you couldn’t charge more per day then
increase the days
Capitated per diem maintains daily charge with limit on
number of days
Quicker results to move patient to next level of care are
valued
RT examples
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Medicare partial hospitalization
Long-Term care (100 skilled nursing facility days)
If RT is employed in these 2 settings, cost assumed
under per diem amount
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Prospective Payment of Care
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Predetermined amount of payment calculated
on historical or statistical costs
First occurred with DPGs
Expanded version of per diem (per day) to per
episode (acute care stay or comprehensive
rehab discharge)
Classifies pts into groups for payment
Implications for RT
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Expanded access for RT because it is bundled
care for rehab svcs – RT is a primary rehab svc
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Examples of RT Payment
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Under FPP leadership of ATRA, the profession
has received special recognition as a qualified
service to satisfy 3-hr rule in comprehensive
rehab
RT in acute care setting also covered under
PPS based on statistical cost for each DPG
Prospective Payment for Continuum of Care
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Next generation of payment – delivered under a larger
system or network – Cradle to Grave services
Assuring svcs through a continuum
PPS Application and Recreational
Therapy Across the Spectrum of Care
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Acute Care Hospital Inpatient – per episode DPG
payment
Inpatient Rehb Facilities (IRF) – per episode
payment in case-mix groups made on per
discharge basis
Partial Hospitalization – RT is one of several
“Activity Therapy” svcs – per diem basis
Outpatient – RT not covered for outpt Medicare at
this time based on outdated Soc Sec language
SNFs – RT covered under Medicare Part A – per
diem PPS – must be medically necessary and
appropriate
Strategies for Success
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6 strategies for recognition and coverage
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Assure Active Tx – 1.)individualized plan of Tx or
diagnosis 2.)reasonable expectation to improve
condition 3.)be for diagnostic purposes 4.)supervised
periodically 5.)evaluated by a physician
Specific Physician Orders – Key indicator of medical
necessity – scope, intensity and duration
Clear distinction between RT and Activities – RT in
addition to mandated activity services in LTC – Some
RTs provide both but must be distinct regarding the
difference
Cost Analysis and Accountability – be knowledgeable
about cost and revenue – from annual to 15-min or
every minute
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Staffing and productivity – personnel costs
are primary expense – ratio of staff hours to
tx volume – can vary based on organization
mission, patient acuity, and complexity
Compliance with Regulatory Mandates – CMS,
JC, CARF – Mgr must be aware of applicable
state or local health regulations