Reimbursement: Surviving Prospective Payment as a Recreational Therapist

1. Reimbursement: Surviving Prospective Payment as a Recreational Therapist Chapter 19 HPR 453

2. 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

3. Windows of Opportunity • RT not included as a rehab service in the Social Security Act • In 1990s the language the outdated language was simply updated so access to RT was still limited • DRGs in 1994 by American Rehabilitation Association and 1997 Balanced Budget Act prospective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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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)

10. 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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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