How Providers Survive in a Cost Cutting Environment

1. How Providers Survive in a Cost Cutting Environment Don Holloway, Ph.D. Co-founder of NIATx Don@Holloway.org

2. Better Title How Providers Survive in a Revenue Cutting Environment Don Holloway, Ph.D. Co-founder of NIATx Don@Holloway.org

3. Story: Mason City, Iowa Mason City Iowa The outpatient program at Prairie Ridge Addiction Treatment Services increased its outpatient revenue by $381,000 per year. Historically, the agency received 60% of its outpatient revenue through a block grant capped at 1,100 clients. The agency averaged 42% over-utilization of block grant funds for 5 years, resulting in up to $462,000 of annual unreimbursed care for 540 clients. After joining NIATx, the program focused on increasing the other 40% of revenue, (third party, Medicaid, and client fees). Within 2 years, it increased this revenue from $627,000 per year to $1,008,000, an increase of $381,000 per year. The block grant is now 48% of outpatient revenue, down from 60%.

4. Prairie Ridge’s Problem • 540 clients served without payment of • $462,000 • Would require a 58% cut in cost to break even, from $855 to $356 per client

5. What would you do? • Renegotiate contract? • Reduce costs? • Turn clients away? • Make clients wait longer? • Terminate contract for block grant? • Change payer mix? “Cost-shift”?

6. Summary Increase Revenue Referrer Payer Client Provider Reduce Costs

7. What’s it like to be our client? NIATx Aims Referral Reduce Waiting Time 1st Contact Reduce No-shows Assessment Increase Admissions !st Treatment Session Increase Continuation Within One Level 4th Treatment Session End This Level of Care Increase Continuation Between - Transition Start Next Level of Care

8. Increase Any Admissions? NIATx Aims Referral Reduce Waiting Time 1st Contact Reduce No-shows Assessment Any Admissions? Increase Admissions !st Treatment Session Increase Continuation Within One Level 4th Treatment Session End This Level of Care Increase Continuation Between Levels - Transition Start Next Level

9. Typical Payer-Provider-Referrer Relationship Referrer Payer Client Provider

10. Strengthen The Payer-Provider-Referrer Relationship Referrer Payer Client Provider

11. What’s it Like to Pay Us? Referrer Payer • Women’s Adult • Women with Children • Battered Women • Men’s Adult • Boy’s Adolescent • Girl’s Adolescent • Parents • Veterans • Elder • Dual Diagnosis • Depression • HIV • Professional: Pilots, Drs, Rns, Clergy Client Provider

12. What’s it Like to Pay Us? • Are we paid enough? • FFS No Cap • FFS with Cap • Annual Budget • Fee per Client per Year • No Contract/Source Payer Referrer • Utilization Controls: • Limit to 10 visits • Prior authorization Client Provider

13. What’s it Like to Refer to Us? Referrer Payer • Referrals that start • clients in addiction • treatment are made by: • self • parents • family and friends • employers • Unions • schools • your staff • other health care providers • child protection services • judges, lawyers, and probation officers Client Provider

14. What’s it Like to Refer to Us? Referrer Payer • Transitions from • the end of one level • of care to the start of • another are made by: • detox • residential • inpatient • partial hospitalization • intensive outpatient • outpatient Client Provider

15. Aim: Become Preferred Provider for Selected Referrers Referrer Payer • Identify Referrers • Invite One Referrer to Join You • Form a Joint Change Team • Invite Referrer to Participate in a Walk Through • Agree on Aims • Establish Baseline Data • Identify Barriers and Opportunities • Test Promising Practices • Sustain Improvements • Invite Another Referrer to Join You and Repeat Client Preferred Provider

16. How will we know we’re preferred? Referrer Payer Client • # of referrals will increase • % of referrals admitted will increase • % of revenue from selected payers will increase Preferred Provider

17. What changes can we test? Tailor brochure for referrer too many referrers do not have written materials with directions and guidance for clients to use to contact addiction treatment Assign each referrer one person to contact for all their referrals too few referrals are made, and when they are, too few end in admission Guide referrers to make appropriate referrals too many referrers do not know when or how to make a referral Encourage referrers to make 1st appointment while referrals are still in their office too many clients are not ready, willing or able to make initial contact or appointment on their own Continue on next slide . . .

18. What changes can we test? Continued . . . Acknowledge all referrals referrers need to be reminded about your services – one way is to send a thank you note Keep them informed about “their” client to the extent confidentiality is not broken Visit referrers periodically and ask “What’s it like to refer a client to us?” Stay at top of referrer’s mind you are easy to forget Offer specialized services, e.g. elderly funding from current payer sources is saturated

19. How can we sustain our preferred status? Referrer Payer Client • Assign each referrer one person to contact for all their referrals • Visit referrers periodically and ask “What’s it like to refer a client to us? Provider

20. Summary • Selectively contract - change payer mix • Selectively strengthen existing relationships and build new ones Increase Revenue Referrer Payer Client Provider • Reduce Waiting Time • Reduce No-shows • Increase Continuation Reduce Costs