Medicare Prospective Payment Research Articles

The Clinician???s Role in Medicare Prospective Payment

The Clinician???s Role in Medicare Prospective Payment

The Clinician???s Role in Medicare Prospective Payment

Pamela Teenier, RN, BSN, MBA, CHCE, COS-C, is Director of Medicare Operations, Gentiva Health Services, Corpus Christi, TX. Correspondence: [email protected]. Editor’s Note:This is the fourth in a series of articles discussing focus areas clinicians need to know when providing care for patients in the Medicare Prospective Payment System (PPS). The first article was an overview of the basic elements of Medicare’s Prospective Payment System, PPS (August 2004). Next, the focus was evaluating case mix weight to determine if assessments were completed appropriately (November 2004). The third addressed utilization management, exploring how to monitor visits per episode to contain costs (April 2005). Case mix weight evaluation and utilization monitoring begin at the start of care and work throughout the episode. In this you are at the end of the episode when adjustments are processed. Five events can occur that will create an adjustment to the established episode reimbursement amount (August 2004). This article discusses ways to evaluate adjustments that are occurring and provides suggestions for reducing the amount of revenue lost.

The Clinician???s Role in Medicare Prospective Payment

Pamela Teenier, RN, BSN, MBA, CHCE, COS-C, is Director of Medicare Operations, Gentiva Health Services, Corpus Christi, TX. Correspondence: [email protected]. EDITOR’S NOTE:Under Medicare’s Prospective Payment System (PPS), today’s clinician is expected to manage both clinical and financial aspects of a patient care episode. This is the third in a series of articles to teach clinicians three important PPS elements that affect a home health agency’s ability to successfully manage in the PPS environment: case mix weight, adjustments, and visits per episode. The first article (see HHN August 2004) laid the foundation by outlining definitions of the basic elements, tying in the importance they play in PPS reimbursement. The second article (see HHN November 2004) was about evaluating the case mix weight (CMW) element and creating a plan to improve assessments and overall reimbursement.

Organizational and Environmental Factors Affecting the Utilization of Telemedicine in Rural Home Healthcare

ABSTRACT In the last five years, home health agencies have become increasingly interested in telemedicine as a potential means to meet the future healthcare needs of their aged and chronically ill clientele. This case study examines the organizational and environmental conditions that affected the implementation of a telemedicine program in one rural home healthcare organization. Several factors restricted the utilization of telemedicine, including Medicare's Prospective Payment System and corresponding documentation (Outcome Assessment and Information Set), the organization controlling grant funding for the program, and several environmental factors. Findings suggest that in rural communities, older homecare patients may have less opportunity to benefit from telemedicine. The study demonstrates the importance of environmental and organizational factors when implementing a telemedicine program. Recommendations are offered for home healthcare organizations considering development of telemedicine programs.

Identifying and Accommodating Statistical Outliers When Setting Prospective Payment Rates for Inpatient Rehabilitation Facilities

To demonstrate how a Bayesian outlier accommodation model identifies and accommodates statistical outlier hospitals when developing facility payment adjustments for Medicare's prospective payment system for inpatient rehabilitation care. Administrative data on costs and facility characteristics of inpatient rehabilitation facilities (IRFs) for calendar years 1998 and 1999. Compare standard linear regression and the Bayesian outlier accommodation model for developing facility payment adjustors for a prospective payment system. Variables describing facility average cost per case and facility characteristics were derived from several administrative data sources. Evidence was found of non-normality of regression errors in the data used to develop facility payment adjustments for the inpatient rehabilitation facilities prospective payment system (IRF PPS). The Bayesian outlier accommodation model is shown to be appropriate for these data, but the model is largely consistent with the standard linear regression used in the development of the IRF PPS payment adjustors. The Bayesian outlier accommodation model is more robust to statistical outlier IRFs than standard linear regression for developing facility payment adjustments. It also allows for easy interpretation of model parameters, making it a viable policy alternative to standard regression in setting payment rates.

The Effect of Medicare's Prospective Payment System on Discharge Outcomes of Skilled Nursing Facility Residents

In July 1998, the Centers for Medicare and Medicaid Services (CMS) changed the payment method for Medicare (Part A) skilled nursing facility (SNF) care from a cost-based system to a prospective payment system (PPS). Unlike the previous cost-based payment system, PPS restricts skilled nursing facility payment to pre-determined levels. CMS also reduced the total payments to SNFs coincident with PPS implementation. These changes might reduce quality of care at skilled nursing facilities and could be reflected in resident discharge patterns. The present study examines the effect of the 1998 policy change on resident discharge outcomes. The results indicate that PPS reduced the relative risk of discharge to home and to death for Medicare residents (compared to non-Medicare residents) and had no significant effect on hospitalizations or transfers.

The Clinician???s Role in Medicare Prospective Payment

Pamela Teenier, BSN, RN, MBA, CHCE, is Director of Medicare Operations, Gentiva Health Services, Corpus Christi, TX. Address for correspondence: 13806 Doubloon Street, Corpus Christi, TX 78418. Editor’s Note: Under Medicare’s Prospective Payment System (PPS) today’s clinician is expected to manage both clinical and financial aspects of a patient care episode. This is the second in a series of articles to teach clinicians three important PPS elements that affect a home health agency’s ability to successfully manage in the PPS environment; Case Mix Weight (CMW), Adjustments, and Visits per Episode. The first article (see August 2004 HHN) laid the foundation by outlining definitions of the basic elements tying in the importance they play in PPS reimbursement. This month’s column focuses on evaluating the CMW element and creating a plan to improve assessments and overall reimbursement. Subsequent columns in the series will discuss each of the terms in depth, presenting an analysis of the concept and opportunities for you to apply them to patient situations.

The Balanced Budget Act of 1997 and U.S. Hospital Operations

The Balanced Budget Act (BBA) of 1997 initiated several changes to Medicare payment policy in an effort to slow the growth of hospital Medicare payments and ensure the future of the Medicare Hospital Insurance Trust Fund. Although subsequent federal legislation relaxed some original proposals, restored funds were limited and directed to specific types of hospitals. In addition, these Medicare policy changes came at a time when hospitals faced private sector payment constraints. This paper assesses the short-term effects of the BBA on operations of nonprofit hospitals in the United States and compares these effects to those observed in the early 1980s during implementation of the Medicare prospective payment system (PPS). We found that some operational changes instituted by hospitals facing financial pressures from the BBA were similar to those observed for hospitals that faced pressure from Medicare PPS, including efforts to contain Medicare cost growth, to expand outpatient service provision, and to contain hospital staffing. However, during PPS implementation hospitals experienced declining inpatient use and growing profit margins, whereas post-BBA hospitals experienced growing inpatient use and declining margins.

Home Health Outcome Patterns

ABSTRACT Using OASIS data collected by all Medicare-certified home health agencies, this article first presents descriptive statistics on patient outcomes for a national agency sample in 2001, soon after Medicare prospective payment implementation. Ratios of actual to predicted outcome rates, aggregated for groups of outcomes, are considered as potential summary indicators of agency outcome performance. The aggregate ratios show promise, but information on each outcome remains critical to agencies' outcome improvement efforts. Ratios for some outcomes are interrelated, suggesting that agencies focusing outcome enhancement efforts on a few target outcomes also may improve related outcomes.

Physical rehabilitation following medicare prospective payment for skilled nursing facilities.

To examine the effect of the Medicare prospective payment system (PPS) for skilled nursing facilities (SNF) on the delivery of rehabilitation therapy to residents. Resident-level data are based on the Resident Assessment Instrument Minimum Data Set for nursing facilities. All elderly residents admitted to SNFs in Michigan and Ohio in 1998 and 1999 form the study population (n=99,952). A differences-in-differences identification strategy is used to compare rehabilitation therapy for SNF residents before and after a change in Medicare SNF payment. Logistic and linear regression analyses are used to examine the effect of PPS on receipt of physical, occupational, or speech therapy and total therapy time. Data for the present study were extracted from the University of Michigan Assessment Archive Project (UMAAP). One assessment was obtained for each resident admitted to nursing facilities during the study period. The introduction of PPS for all U.S. Medicare residents in July of 1998 was associated with specific targeting of rehabilitation treatment time to the most profitable levels of therapy. The PPS was also associated with increased likelihood of therapy but less rehabilitation therapy time for Medicare residents. The present results indicate that rehabilitation therapy is sensitive to the specific payment incentives associated with PPS.

The clinician's role in Medicare prospective payment: Part 1--Basic terms.

The clinician's role in Medicare prospective payment: Part 1--Basic terms.

An Exploratory Study of Social Work Practice Under the Medicare Prospective Payment System in Home Health Care

Abstract An exploratory study investigated ethical conflicts over access to services for elderly patients and social work practice activities within the context of the Medicare Prospective Payment System (PPS) in home health care. Questionnaires (n = 77) were distributed to attendees at the annual conference of the American Network of Home Health Care Social Workers in October, 2001 (response rate = 43%). A majority of the respondents rated the impact of the ethical conflict on elderly patients as “somewhat” or “very” negative. A decrease in the number of social work home visits since the implementation of PPS was reported by 63% of respondents. Implications for practice, education, and research are discussed.

Updated variable-radius measures of hospital competition.

To calculate variable-radius measures of hospital market size and create measures of competition for hospitals' markets. Discharge abstracts from the 1997 State Inpatient Databases of the Healthcare Cost and Utilization Project (HCUP) linked with the American Hospital Association (AHA) Annual Survey, Area Resource File (ARF), InterStudy Regional Market Analysis database, and Medicare's Prospective Payment System Impact Files. Hospital radii capturing 75 and 90 percent of hospital admissions regressed against hospital and health care market characteristics and other local area characteristics, where the specification was designed to maximize predictive ability. The number of competing hospitals and the Herfindahl-Hirschman index (HHI) of competition were calculated for each hospital's market. Discharge abstracts were used to create actual radii for hospitals in nine states. These data were linked with other data describing hospital, health care market, and other characteristics. We explained 44.7 and 9.6 percent of the variation among urban and rural hospitals, respectively, in radii that capture 90 percent of patients, and slightly less of the variation in radii that capture 75 percent of patients. Population density; number of other hospitals in the local area; and hospital characteristics such as medical school affiliation, percentage of admissions that are Medicaid, case mix, and service offerings are important correlates of a hospital's market size. Predicted radii and associated competition measures were created (matched to AHA hospital identifiers) for all nonfederal, short-term, general medical/surgical hospitals in the continental United States for which complete data were available in 1997 (N=4,806) and are available from the authors.

Organizational and market factors associated with Medicare dependence in inpatient rehabilitation hospitals.

Rehabilitation hospitals in the USA have been excluded from the Medicare Prospective Payment System (PPS) system since 1982, and have received cost-based reimbursement. However, the 1997 Balanced Budget Act mandated a PPS for inpatient rehabilitation, to be implemented by the end of 2002. This study assesses rehabilitation hospitals' dependency on Medicare. Findings show that not-for-profit hospitals, facilities with fewer services, facilities with lower staffing levels, and hospitals with lower operating expenses and profits, have a higher proportion of their inpatient revenue coming from Medicare. These facilities may be vulnerable to the new PPS payment system.

Developing a Medicare prospective payment system for inpatient psychiatric care.

Under the Balanced Budget Refinement Act (BBRA) of 1999, the secretary of health and human services was mandated to implement a prospective payment system (PPS) for psychiatric inpatient facilities that were exempt from the Medicare inpatient PPS. This paper reviews the reason for the initial "distinct-part" exemption, describes research that has been conducted to inform the development of a psychiatric inpatient PPS, and examines some of the issues that must be addressed as a PPS is designed. In addition, some changes in the overall inpatient psychiatric hospital sector are discussed.

Potential impact of the new medicare prospective payment system on reimbursement for traumatic brain injury inpatient rehabilitation 1,2

Hoffman JM, Doctor JN, Chan L, Whyte J, Jha A, Dikmen S. Potential impact of the new Medicare prospective payment system on reimbursement for traumatic brain injury inpatient rehabilitation. Arch Phys Med Rehabil 2003;84:1165–72. Objective: To evaluate the potential impact of the new Medicare prospective payment system (PPS) on traumatic brain injury (TBI) rehabilitation. Design: Retrospective cohort study of patients with TBI. Patients were assigned to their appropriate case-mix group (CMG) based on Medicare criteria. Setting: Fourteen urban rehabilitation facilities throughout the United States. Participants: Patients with TBI admitted to inpatient rehabilitation and enrolled in the Traumatic Brain Injury Model Systems from 1998 to 2001 (N=1807). Interventions: Not applicable. Main Outcome Measures: Cost of inpatient rehabilitation admission, length of stay (LOS), and functional outcomes. Results: The median cost of inpatient rehabilitation for patients with TBI exceeded median PPS payments for all TBI CMGs by 16%. Only 3 of the 14 hospitals received reimbursement under PPS that exceeded costs for their TBI patients. Conclusions: Compared with current costs, the new Medicare payment system may reimburse facilities significantly less than their costs for the treatment of TBI. To maintain their current financial status, facilities may have to reduce LOS and/or reduce resource use. With a decreased LOS, inpatient rehabilitation services will have to improve FIM efficiency or discharge patients with lower discharge FIM scores.

Relevance of federal antitrust statutes to clinical practice.

With the advent of Medicare prospective payment systems, health care entities and physicians were forced to decrease expenses by sharing services and to increase revenue by attempting to jointly negotiate better reimbursement from third- party payers. Both activities have raised the specter of prosecution under antitrust laws that have been with us for more than a century but are poorly understood by practicing physicians. Recent monopolistic activities in the health care arena have prompted the Federal Trade Commission to file actions under specific acts of Congress, eg, the Sherman Anti-Trust Act, Clayton Act, Federal Trade Commission Act, Robinson-Patman Act, and Celler-Kefauver Act. Inasmuch as it is likely that specialties such as vascular surgery as a business will undergo substantial transformation, physicians need to be aware of the severe civil and criminal sanctions imposed if they are found guilty; fines that are several times actual damages; activities that raise antitrust issues including utilization review, medical staff privileges for competing specialties, participating provider agreements, and predatory pricing; and affirmative defenses and relief available in terms of specific exemptions. As health care providers react, innovate, and adjust to stay solvent, their business strategies will surely continue to be scrutinized for antitrust behavior by federal and state officials. The physician must have a basic understanding of the groundrules that govern any contemplated business strategy so that common pitfalls may be averted.

Changes in the nursing facility-hospital interface after the prospective payment system: the effects on patients with infections in the post-acute care setting.

The purpose of the article is to discuss the impact of Center for Medicare and Medicaid Services (CMS) new prospective payment system (PPS) on the flow of patients between hospitals and nursing homes, with a particular focus on how patients with infections are likely to be affected. The first section describes Medicare’s relationship to skilled nursing facilities (SNFs). The second describes the revised reimbursement system, known as Resource Utilization Groups (RUGs), and the third section describes the changes in provider responses given the altered incentives around patient flows, created through use of the RUGs. The final section examines how these changes might affect the flow of residents with infections, particularly those that are resistant to antimicrobial agents.

Patients Feel the Pressure of PPS

Patients Feel the Pressure of PPS

NIMH Director Expresses Hope For Future Of Psychiatry

NIMH Director Expresses Hope For Future Of Psychiatry