Dollars and Sense of Rehab Part 2: Physician Payment Systems

1. Dollars and Sense of RehabPart 2: Physician Payment Systems Sue Palsbo, PhD, MS NRH Center for Health & Disability Research

2. Goals for Understanding • History of Medicare physician payment • Alternatives to FFS payment • Spreading financial risk • Understand parts of a managed care contract

3. What is Medicare? • Federal program • Part A -- Inpatient (facility and house staff) -- acute hospitals, rehab hospitals, SNFs • Part B -- Outpatient, physician, durable medical equipment, home care

4. Who is Medicare? • Aged -- most people age 65+ • Entitled separately to Part A and Part B • Sometimes, your patient will be entitled to Part A, but NOT Part B • Disabled -- mostly people with psychiatric disabilities, or people who were employed and then became disabled • Sometimes, Medicare beneficiaries are also eligible for Medicaid

5. What is Medicaid? • State programs • Combined with Federal money • Pays for medical care • Often more generous than Medicare when covering durable medical equipment and assistive devices • Pays for Rx • Pays for transportation to doctor’s appointments

6. Who is Medicaid? • Eligibility varies state to state • Poor • Blind • TANF (temporary assistance to needy families) • SCHIP (state children’s health insurance programs) • Disabled -- mostly people with developmental disabilities

7. Dual Eligibles • People who have both Medicare and Medicaid coverage

8. History of Physician Payments - FFS • UCR • Usual (simple average of what you charge) • Customary (what most people in your area charge) • Reasonable (some percentile of what everyone charges) • Insurers pay you the least of these 3 • You can BUY this information (so can other payers)

9. Example • CPT 99205. Evaluation and management of a new patient, which requires these 3 components: • a comprehensive history • a comprehensive examination • medical decision making of high complexity • Counseling and coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. • Usually, the presenting problems are of moderate to high severity. Physicians typically spend 60 minutes face-to-face with the patient and/or family • e.g.: Initial office evaluation and management of patient with systemic vasculitis and compromised circulation to the limbs. • Others?

10. How Much Do You Charge?

11. Consequences (Gaming the System)

12. History of Physician Payments - RB-RVS

13. Overall PPS Methodology Nation-wide base dollar amount Local geographic wage multiplier Nation-wide condition multiplier Payment

14. Overall Physician Methodology Local geographic practice cost index (GPCI) multiplier Nation-wide base dollar amount Nation-wide RBRVU multiplier Payment

18. Impact of RBRVS • Physicians increased volume • CMS clamped down on fees to compensate • Physicians upcoded complexity • CMS rebalanced RVU scale to compensate • Physicians declined to “participate” • Congress passed limit on non-participating fees (115%?) • Cottage industry to develop RVUs for “gap codes”

19. Private Sector Insurance

20. OWAs • Per Diem • Global Fees • Balance Billing

21. Difference Between HMOs and PPOs • Deductibles • Co-insurance • Co-payment

22. You Will Probably Not Be Alone

23. HMO Enrollment

26. Capitation Contracts by Specialty

27. Shifts financial risk from insurer to you! Your patient may be on Medicaid; Medicaid capitates the HMO Large numbers of people/encounters Define by CPT Rate books (utilization and pmpm) Risk adjustment (age/sex/condition) http://www.nrhchdr.org/RAFieldGuide.prn.pdf My advice: Retain an actuary! Why Capitate?

28. Contact capitation

29. Accumulators Per patient In aggregate Thresholds Stop-loss reinsurance

30. Primary Secondary Auto, etc. Coordination of Benefits