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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
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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
Windows of Opportunity • RT not included as a rehab service in the Social Security Act • In 1990s the language the outdated language was simply updated so access to RT was still limited • DRGs in 1994 by American Rehabilitation Association and 1997 Balanced Budget Act prospective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
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
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
Balanced Budget Act of 1997 • Goal- Reduce the spending of healthcare $ • Mandated reduced federal healthcare $ • Tied payment rates to cost in • 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 • 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
PPS is based on 4 principles • 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 • 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
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
Evolution of Payment and Coverage • Fee for service • 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 • Manager must understand system to account for every $ • Tx and services must show outcomes
Examples in RT can be found but vary across the country due to lack of knowledge, misinterpretations of guidelines or resistance to change • Discounted Fee for Service • Negotiating price-setting process between provider and payer • Can be accomplished as identification of a provider and assurance of increased business
Implications for RT • 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 • # of pts, duration of tx, Frequency of tx, school personnel assistance with pre and post-pool functions, presence of school personnel in pool
Per Diem • Daily charge vs. charge per procedure • Fee for service is ordering from menu…Per Diem is eating the buffet • Implications for RT • 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
Capitated Per Diem • 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 • Implications for RT • Quicker results to move patient to next level of care are valued • RT examples • 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
Prospective Payment of Care • 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 • Expanded access for RT because it is bundled care for rehab svcs – RT is a primary rehab svc
Examples of RT Payment • 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 • 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 • 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 • 6 strategies for recognition and coverage • 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
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