Industry Experts Sound Off

A proposed rule from the U.S. Department of Health & Human Services requires all physician practices and other providers to adopt a new ICD-10 code set by 2011, and use it for coding diagnoses on all HIPAA standard transactions. So we asked information technology experts from the ASC industry to respond to this question:

How can facility owners/operators mitigate the challenges and costs associated with potential practice management and billing system software upgrades?

Prepare now! Establishing cross-functional transition teams and plans now will help ASCs identify the impact of ICD-10 on key business processes. Begin speaking and negotiating with both payors and vendors to gauge their preparedness and determine what cost they plan to pass along to clients. If you haven’t yet automated procedure documentation and coding, do so now, as it will cut down on the time and cost of comprehensive staff education. Every vendor will likely have a different plan, timeline and cost structure. Finally, designate a monitor. By designating one individual to monitor changes to the mandate, an ASC can ensure the most appropriate use of resources to achieve compliance in a timely manner.

Sean Benson

Director of Marketing

ProVation Medical/ Wolters Kluwer Health

ICD-10 coding should not be a surprise to anyone in the healthcare management industry since it has been around since 1999 and its predecessors go back as far as 1900, when ICD-1 was implemented. The major challenges facing facility owners and operators will be in educating their clinical and coding staff to the new coding standards, dealing with the phased in adoption by different insurance carriers as with any new standard, and the readiness of their software vendor. The benefits projected by HHS are: more accurate payments for new procedures; fewer rejected claims; fewer improper claims; better understanding of new procedures; improved disease management; better understanding of health conditions and healthcare outcomes (no monetary estimate made); and harmonization of disease monitoring and reporting world-wide.

Ron Cousino

Director of Client Relations

Experior Healthcare Systems

I believe there are three actions that an organization can begin that will reduce the impact on converting to the ICD-10 code set. First, begin dialogue with your IT vendor now. Make sure they have a well-defined plan on how they will meet the requirements for filing claims and contingencies for the inevitable problems that will arise. Secondly, identify your primary payors and begin dialogue with them as soon as possible. Make sure your IT vendor is party to those conversations, too. There are going to be some payors that switch on schedule, others that may migrate earlier or later-you and your billing system have to be ready for those challenges. Finally, staff education will be critical. Understanding the terminology and the requirements will help spot problems before they can affect your operations and cash flow.

Craig Veach

Senior Vice President of Operations

Amkai

Now is the time to ask your practice management and billing providers about ICD-10 conversion. Ask if ICD code fields are “hard coded.” If they are: a warning sign. Also, ask about NPI conversion history. Vendors with properly structured systems finished the conversion early: in either 2006 or early 2007. If that isn’t the case: a second warning sign. Another major challenge will be education of coding staff. If your ASC uses a billing vendor, ask about training plans. If coders are on your staff, plan now for a major investment in education and training, and a substantial productivity hit during the transition.

Bill Gilbert

Vice President of Marketing

Advantedge Healthcare Solutions

The new ICD-10-CM codes incorporate better detail but will also greatly increase the complexity of coding with over 68,000 ICD-10-CM codes versus roughly 13,000 ICD-9-CM codes. This increased difficulty will invariably lead an increase in denied/rejected claims as all parties learn to use the new system. We believe that having digital charts will be extremely important during this transition by allowing facilities to better manage their revenue cycle. We have an application that allows facilities to cost-effectively digitize paper charts and significantly reduce time and effort necessary to resubmit rejected/denied claims. This faster turnaround results in quicker reimbursement and greater working cash flow to the center. The new coding system is necessary and we are working to make the transition as smooth as possible for our partners.

Jeff Blankinship

President and Chief Executive Officer

Surgical Notes

According to the World Health Organization (WHO), “It is not possible to convert ICD-9 data sets into ICD-10 data sets or vice versa. ICD-9 has 6,969 codes while there are 12,420 codes in ICD-10 (14,199 with the fourth-character place of occurrence codes in Chapter XX (External Causes of Morbidity and Mortality).” In our software system, we already accommodate the use of the fourth character in the ICD-10 code set. HST already has one strategy in place to mitigate the transition to ICD-10. One important point that may be missed in this discussion is that the payors and Electronic Claims Clearinghouses must also update their systems to properly handle the ICD-10 code set.  During this transition period, ASCs be on heightened alert to process any rejections and their associated causes. The best mitigation is for ASCs to be well-informed, educated and have processes in place that the entire business office staff can follow.

Tom P. Hui

President and Chief Executive Officer

Healthcare Systems and Technologies

Facility owners and operators need to confirm with their billing and practice management software vendor if their existing system will support both ICD-9 and ICD-10 and replace it with one that will have the capability prior to 2011. As with the NPI transition, many carriers may not be able to convert to the ICD-10 diagnosis system by the deadline and may still only support ICD-9. Software systems will need to support both versions and provide the capability to select either one, so that claims can be submitted to the carriers in the right format to ensure that they will be processed and paid.

Mel A. Gunawardena

Chief Executive Officer

Medigain

The impact to healthcare IT is vast, touching virtually all functions including registration, clinical, quality, billing and reporting. Vendors must aggressively plan to ensure their products support ICD-10 end-to-end, as well as maintain legacy ICD-9 data. “Getting there” requires far more than modifying fields and reports; applications must also reflect many new provider and payer business rules and processes. Perhaps the largest technology consideration is the pre-requisite move to the X12 5010 transaction set. The transition will require significant application modifications plus extensive inter-system testing to ensure processes and workflow are not interrupted. The broad scope of this change will be greater than the HIPAA changes of 2003, since the focus on interoperability and the prevalence of interfaces has increased substantially in recent years.

Lindsay McQueeney

Director of Product Management

SourceMedical Solutions

Economy causes greater scrutiny of insurers

There will be renewed interest in solvency regulation

In the midst of the current U.S. financial turmoil, there are many uncertainties with respect to the future of our nation’s financial institutions. A significant upgrade in the monitoring powers and examination authority of regulatory agencies is going to be unleashed. The enhancement of regulatory powers is going to trickle down to other government entities that are supposed to protect the public trust.

Next to financial institutions, the industry entrusted with the greatest accumulation of public funds is the insurance industry. Collectively, U.S. employers and other purchasers of health benefit plans invest approximately $1 trillion annually in insurance premiums and other funds earmarked for healthcare expenditures. American insurance companies, HMOs and other regulated MCOs should expect to see greater scrutiny of their financial condition.

Health insurers and MCOs, primarily regulated at the state level, fall under the jurisdiction of state health and insurance departments, with the latter being charged with oversight of the financial component. The size of the insurance department staffs vary from state to state.

WEIGHTS AND MEASURES

The financial well-being of these companies is measured and evaluated primarily by monitoring their capitalization, the investment of their assets, their transactions with affiliated entities, and their risk-sharing and reinsurance arrangements. The standards required with respect to each of these functions are set by each state and are conditions for doing business in each state. We are seeing more uniformity in regulation, due in large part to the National Association of Insurance Commissioners (NAIC) promoting greater consistency.

The required capitalization of regulated entities is set at a specific dollar amount by statute in each state. This minimum statutory capital and surplus amount ranges from as low as $1 million in some states to as high as $10 million in others. However, as an additional measure, most states have now adopted a complicated formulaic approach to determining a company’s required capital-the NAIC Risk-Based Capital (RBC) regulation. This law looks at several factors, including the risk and diversification of assets and the volume of business underwritten, to come up with an individualized calculation of required minimum capital for each regulated entity. As a general rule, the regulated entity should have total capital and surplus that is no less than 25% of its annual premium volume (on a net basis).

Each regulated entity, whether public or privately held, is required to submit financial statements each quarter, with the year-end statement being audited. These financial reports must set forth the RBC calculation and include several exhibits that provide detailed analyses of the company’s liquidity, profitability and underwriting activities.

Each regulated entity also is limited in the way that it invests its assets. Each state has regulations to limit the types of assets that may be invested in as well as the percentage that may be invested in any one asset. Furthermore, the regulated entity is prohibited from pledging its assets to secure its debts or the debts of any other person, and generally it may not guarantee the debts of any other person.

The Insurance Holding Company Act, adopted in each state, regulates the activities that an insurer or an HMO may engage in with its unregulated affiliates. These laws prevent the unregulated activities of affiliates from dragging down the regulated entity.

This column is written for informational purposes only and should not be construed as legal advice.

Barry Senterfitt is a partner in the insurance industry practice of Akin Gump Strauss Hauer & Feld LLP in the firm’s Austin, Texas, office.

Facilities must change to accommodate obese patients

According to research compiled by America Sports Data Inc. in the United States, 3.8 million people weigh in at more than 300 pounds, over 400,000 people (mostly males) carry over 400 pounds, and the average adult female weighs 163 pounds.

Also, according to the National Institute of Health, approximately one-third of all hospital patients weigh 350 pounds or more. In fact, bariatric surgery volume skyrocketed from 16,000 cases in 1992 to 103,000 cases in 2004.

Because of their physical size, these patients often cannot use standard wheelchairs, waiting-room armchairs, blood pressure cuffs, hospital beds and gowns, or M.R.I. and CAT scan machines. Likewise, X-rays might not penetrate far enough into their bodies to produce useful images, causing possible care delays.

For these reasons, architects are facing new design challenges. They are beginning to realize the need to accommodate more bariatric patients. Newly constructed hospitals and healthcare faciilties also want to incorporate these design elements from the start.

Safety incidents, such as toilets collapsing, chairs breaking, patient beds malfunctioning and wheelchairs that cannot roll under the weight of severely obese patients, are inspiring hospitals to respond. Healthcare equipment and furnishing manufacturers have also had to respond to the situation by creating a whole new line of equipment that caters to severely obese patients.

New equipment is likely to impact a project’s overall cost and potentially its timeline. Determining the additional costs for certain elements, such as furniture and medical equipment can be done easily based on the numbers needed for each project. However, calculating costs becomes more challenging when you consider the overall project. For example, accommodating obese patients will usually mean designing larger patient rooms, which increases the overall square footage of a project and therefore impacts the cost.

Project completion dates can also be impacted when including design for obese patients, especially with remodels. In existing facilities, designers have to consider many different elements and how much the current building layout needs to be altered to make the proper accommodations.

During the design of Jackson South Community Hospital in Miami, Fla.’s new 160,000-square-foot expansion and renovation project, the design team identified a series of rooms within the hospital dedicated for obese patients. The design team had to make sure that the doorways were wide enough and that both the floor-mounted toilets and showers could handle patients that weighed up to 500 pounds. They also developed a reinforced over-bed gurney system to assist medical personnel in lifting immobilized patients out of bed and into wheelchairs or stretchers. Bathroom stalls and showers were designed with larger footprints to accommodate the patient and staff.

When planning a healthcare facility, it is necessary to keep the patients’ dignity in mind.

Since neither the American Institute of Architects/Academy of Architecture for Health or the American Disabilities Act provide specific guidance on physical design associated with care of extremely obese patients, they are challenged with educating the staff and making sure that they stay updated with all of the latest product lines available for specification in the design of new or renovated hospitals.

Rolando Conesa, AIA, is a principal with Coral Gables-based MGE Architects, headquartered in Coral Gables, Fla.

Building Bridges

What’s on the horizon for outpatient healthcare in 2009? SurgiStrategies asked Marian Lowe, a partner and senior vice president of federal health policy at Washington, D.C.-based Strategic Health Care. Lowe, who works with ambulatory surgery centers, among other healthcare facilities, advises clients on policy and strategy with Congress and a number of federal agencies such as the Centers for Medicare and Medicaid Services (CMS), the General Accounting Office, and the Medicare Payment Advisory Commission (MedPAC). Prior to joining Strategic Health Care, she served in a number of capacities at MedPAC, and also worked with groups such as the American Organization of Nurse Executives, the California Affiliate of the American Nurses Association, and with Capitol Associates, Inc., a Washington, D.C.-based consulting firm.

SS: How can your healthcare facility clients help you help them in terms of advocacy efforts?

ML: The most effective clients are those that are committed to the political and regulatory process.  If they are willing to be politically engaged, travel to Washington and present their issues to policymakers, they will achieve results faster than those who simply hire a “messenger”.  It is much easier for a lobbyist to convince Congress that an issue is of dire importance if the leadership of the client organization makes the commitment of time and resources to travel to DC and appeal personally to the Members and staff for assistance.  There is no stronger message than a direct appeal for help from a constituent.

Further, most providers have staff or top physicians who are also politically active in their private lives. Some do an amazing job of tapping into political powers at all levels of their organization to help strengthen relationships between them and a member of Congress. These relationships can help build bridges that no amount of lobbying dollars can buy. Lobbyists spend an enormous amount of time developing relationships with congressional staff and members so their message can be heard, but you may have someone working in your facility who has access to the Member and can buttress the work of your advocates.

SS: Many physicians may not have counted on the political component when they decided to become medical entrepreneurs, did they?

ML: Being politically active, for the vast majority of people, is not their day job, and for the most part it’s not even in their job description. But when you are an entity who receives 50, 70, 80 percent of your money from the Medicare program, you must be a participant in the political process at all levels.

SS: Are some physicians resistant to playing politics?

ML: I don’t know if I would call it resistance. By the time someone has gotten to me they already had the realization that they need to be engaged politically. What I do see is a growing awareness on the part of healthcare providers that many of their peers, competitors and partners are politically active and seeing dividends because of that activity. They are waking up to the fact they must participate in politics if they expect to be treated fairly, if not favorably, by legislators and regulators.

SS: What are your thoughts about the ramifications of a new president and a new Congress?

ML: The one thing that can be said with some certainty is that there will be change. What that’s going to be is still somewhat unclear. With an Obama administration, a Democratic-leaning cabinet, and if the Democrats in Congress pick up a veto-proof, filibuster-proof majority, I think you will see a government in a position to make substantial changes to how the Medicare program operates. There is the issue of being saddled with the fact that cost growth is unsustainable, that 47 million people are without health insurance and many more with inadequate health insurance. The economy is in the tank right now, so there’s not a huge amount of dollars to spend on propping up segments of the healthcare system or making new investments in it. I think there will be an enormous push to squeeze savings out of the program. In the outpatient surgery world, I think the tension will be between the hospital industry saying physician ownership is driving utilization and the ASC industry saying Medicare is paying 40 percent overhead for the same service in the hospital. It’s going to be a very difficult battle because a lot of the leadership in the Democrat-controlled Congress is not a fan of physician ownership, nor are there a lot of policy folks who are big fans of physician ownership. Also, this will be an administration willing and able to carry out the direction Congress gives it. There will not be a lot of conflicting opinions between the philosophy of the administration and that of Congress like we had for the past few years with a Republican in the White House and a Democrat-controlled congress.  Last year, providers have leverage; if the administration does something they don’t like, they go to Congress and ask them to block the administration from implementing regulation. Next year, the administration and Congress will not likely have divergent issues about statute and regulation.  Without the check and balance available, we will need fresh approaches to dealing with adverse events coming out of the legislative or executive branches of government.

SS: Does this present specific challenges or opportunities for outpatient healthcare providers?

ML: The surgery center industry has a huge opportunity, and I would point to what the long-term acute care (LTAC) hospital industry has done the last few years. LTACs had a real credibility problem with the policy wonks.  They  were growing quickly,  are the most expensive place for post-acute care services, and a huge amount of venture capital was coming into the industry enabling rapid growth. MedPAC started to ask why so much money was being spent on them. CMS picked the ball and started squeezing LTAC payments. The LTAC industry needed to get politically active and made a huge investment in dollars, time and commitment to the political process.  They brought their leaders, their staff and their stories to the Hill to press their case as to why they are an important part of the continuum of care. They actually got Congress to pass a law that was very favorable to them even when budgets were tight and the policy world was disapproving. I think that’s the level of commitment the ASC industry must bring to the table. They must be willing to make some concessions, though, and be able to say, “This is what we’re doing well and here’s the problem you keep pointing out and this is what we’re willing to do about that.” They must be willing to negotiate.

SS: The ASC industry may not readily agree that it hasn’t already made concessions, especially on reimbursement …

ML: The fundamental problem for any industry is that the point at which it recognizes it’s in trouble is usually several years before it can prove the problem to anyone else. If I’m MedPAC or the Hill, I’m looking at the ASC industry and saying to myself, “We didn’t give you an update for almost 10 years, and now we’re paying you 60 cents on the dollar of what we pay hospitals. You told us the sky was going to fall if you didn’t get 75 percent, but now it’s 60 percent and I don’t see ASC doors slamming shut across the country or beneficiaries saying my ASC won’t do my surgery anymore, they are making me go to the hospital.” The challenge now is to prove there is a problem and to prove the cost of the problem is more expensive than the solution. And if ASCs are struggling, and they have some sort of breaking point, how do you prove to Congress that is happening and the costs associated with lost providers is greater than the cost of giving ASCs a higher fixed percentage of the HOPD rate? It’s a challenge to figure it out and a challenge to sell it politically.

SS: So how is 2009 shaping up politically and legislatively compared to previous years?

ML: Compared to previous years, this is the year a lot of things are going to get done. We haven’t seen a big push to do anything since 2003 when Congress approved the big drug bill, the Medicare Modernization Act. A lot of things rolled on the drug bill but it was really about restructuring the Medicare Advantage program and providing a prescription drug benefit. Prior to that, the last big legislative healthcare bill was the Balanced Budget Act of 1997. That year, if your head was above water, we were sure it would be underwater by the end of the year. That was the year Congress took away a lot from a lot of people, and then spent the next few years up through 2001, sort of giving it back in fits and starts through subsequent legislation.  2009 will probably mean much more fundamental reform of the whole system. The first part of 2009 will be more about coverage and access issues, with people looking at Medicaid and SCHIP as well as looking at insurance and how to get more affordable insurance into the market. There will probably be a big debate over individual coverage versus employer-sponsored coverage, and who has the best leverage there.

What will be fascinating is for the first time in a long time — since the Hillary-care years — the Democrats are controlling all three houses and you have Sen. Kennedy on the Senate floor saying he will pass comprehensive healthcare reform. He can reach across party lines and ideological spectrums and he is getting people to sit down and negotiate with each other. He’s going to be the impetus for moving things forward because he wants to hand his new president an enormous victory. Senator Baucus who chairs the equally powerful Finance Committee also wants to pass major reform legislation.  And if you pass a big piece of legislation, it will be several years before we know how well it is working. That’s how it goes in this town — you hurry up and then you wait.

After they get through the coverage piece, there will be a tremendous desire and a huge amount of pent-up demand from all segments of the healthcare industry to do some tinkering. The challenge for ASCs is to be positioned to say, “This is the tinkering we need” instead of being on the table as to how they’re going to pay for someone else’s improvement. That’s where having advocates come to Washington in the early part of the year will prevent having a crisis in the later part of the year. ASCs must be at the table when the initial discussions are happening, otherwise it will be too late.

SS: What do you think about the push for consumer-driven healthcare and the fight for and against a single-payor system?

ML: In the insurance world you’re seeing more high-deductible health plans because that, in many policymakers’ minds, is the most affordable way to provide coverage for low-income people or others who are difficult to insure. From my clients’ perspective, people are buying these plans but they are unable to afford the deductible and that ends up being many providers’ largest source of bad debt. So there is some hesitancy about reform initiatives that are premised on the idea of numerous people carrying these kinds of health plans. I think single-payor healthcare is one of those scary buzzwords out there but it’s never going to happen. People put it out there to engender fear but there is no appetite nor is there an ability to make it work. A more nationalized payor system could ultimately work out well for the ASC industry, however, if attention turns more to the price paid for services. If you key in on cost and quality, the ASC industry will do very well. If you end up with a lot of managed-care plans, those companies are figuring out that their revenue is premised on saving money on what they spend on medical benefits, and they don’t have anywhere near the political constituencies of the hospital community — so ASCs could fare well in that environment. Plans care about how much they pay for a service, so if you can do it cheaper, ASCs have an opportunity there. I think they can do well in either environment; depending on the people they must convince.

SS: A number of federally mandated quality improvement and pay-for-performance regulations are going to impact the ASC industry; what concerns from policy perspective are healthcare providers identifying?

ML: My take on quality is that ASCs have an enormous opportunity to demonstrate, at a minimum being equal and perhaps superior, on many quality metrics, to the hospital. From a PR standpoint, if the industry is not out in front welcoming quality reporting with open arms, I think it will be devastating to them. They must embrace this. ASCs have been saying no to things like cost reporting and raising concerns with the payment system, so they really need to seize this opportunity to say yes to something. CMS has done a number of things in the hospital arena to expand quality reporting requirements and there has been some criticism of how rapidly that has been done, and I think that’s valid. I don’t think the ASC industry should embrace going from zero to everything overnight, as that would be a regulatory reporting nightmare. But they must be willing to take all the steps. Facilities need to be willing to provide that information. If they don’t, it justifies — from the hospital community perspective — all of the concerns about self-interest and incentives among physicians in ASCs. They must step up and say, “Yes we’ve been saying we do it better and we are willing to prove it to you.”

SS: What do you enjoy about your advocacy work?

ML: The place when you understand what the policies are and you got to know your industry well enough to know what they are and are not capable of doing. It’s great fun to be a part of advocating for them. Having worked with the ASC industry for a while, I can say it is one of the most fun groups of people because they are entrepreneurial by their nature. They are absolutely dedicated to their patients, and they are willing to educate me and everyone else about what they are doing because they believe passionately in it. That makes for a great partner in any advocacy world. It’s how do you capture that energy and their experience and convert it into a message that resonates on the policy side. That’s the challenge and the enjoyment.

Industry Advocates Ready for Political Developments in ‘09

With a landslide win for Democrats in the White House and Congress, the challenge for 2009 for ambulatory surgery center (ASC) and specialty surgical hospital advocates will be reinvesting in current relationships and reaching out to new House and Senate members and their staffs.

Sarah Silberstein, executive director and an advocate with the ASC Association, notes, “With a new president in the White House, some new faces on Capitol Hill and many members of Congress returning to complete the work they’ve already begun, coupled with a renewed focus on the healthcare system, ASC advocacy efforts are more important than ever.”

Randy Fenninger, a partner with Washington, D.C.-based MARC Associates, who has been representing the issues of specialty surgical hospitals for Physician Hospitals of America (PHA), observes, “The election obviously changes the dynamic for the industry. We don’t know how the President-elect views the issue and a lot depends on his appointments to the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The Senate Democrats are closer to a filibuster-proof majority and even though they don’t have it, Republican supporters of the physician ownership have reduced leverage. There are Democrats who tried to help hospitals in their states this year and we will work with them in the coming Congress to build a stronger coalition in support of our position. “

Both the ASC Association and PHA have taken action on the behalf of their constituents to advocate for their respective industries on Capitol Hill. This activity has included legislative days and fly-ins to meet with Congress members and staff, as well as raising funds for PACs, telling their story to members of the media, and in general, rallying support for the outpatient healthcare experience and promoting its benefits and contributions to the larger healthcare system. As owners and operators of outpatient facilities, Silberstein says it’s imperative for physicians, administrators and nursing staff to become active members of the political process.

“Building and strengthening relationships with your elected officials and their staff is critical,” Silberstein emphasizes. “Every ASC must be engaged in meeting with local health legislative staffers and reaching out to staff working on health issues in Washington, so that they are aware of the role ASCs play in our healthcare delivery system. The ASC Association is providing its members with a calendar of grassroots activities and the tools each ASC needs to participate in 2009, with events each month to put into action throughout the year.”

Engagement in the political process helped secure a new Medicare payment system for ASCs but the work is not done. “2009 will be the second year of the four-year transition,” Silberstein notes. “In addition, 2009 will see the implementation of new Medicare regulations for ASCs and, likely, the implementation of quality reporting to Medicare. The ASC Association will continue to be the ASC’s voice here in Washington, advocate for continued payment reforms and work to ensure that the new regulations are drafted and implemented in an appropriate manner.”

Patient Flow and Other Efficiencies Affecting Patient Satisfaction

The dynamics of patient flow are an important component in the overall success of any outpatient unit. Patient safety, hospital revenue, staff satisfaction and patient satisfaction are all negatively impacted when patient flow is stagnated or interrupted. Variables that are taken into account when looking at the dynamics of patient flow in an outpatient setting include: the patient census, a staff nurse, a technician and physician support. Also, the physical layout of the unit can inhibit efficient flow.

On Aug. 23 and 24, 2007, the new endoscopy lab opened at the Tennessee Valley Healthcare System in Nashville, Tenn. When the lab was designed years ago, patient flow and efficiency was a big factor in the equation. Our new lab is both patient- and staff-friendly, and includes four endoscopy suites and six recovery rooms. Each room is stocked to service virtually any type of case, with the exception of the moderate sedation medications, which are kept in our Pyxis in a centralized location.

The plans included individual workstations for the nurses, GI technicians, and the physicians. A supply storage area was also placed between the endo suites for easy access. Patient bathrooms are located between the endo suites and the recovery room areas. Finally, when a patient has been fully recovered, he or she is escorted back to the reception area through a side door.

Staff Support

As the nurse manager of the gastroenterology and bronchoscopy labs, I realize that the dynamics of patient flow are integral when staffing nurses and technicians for our unit. Nurses and technicians are staffed Monday through Friday from 7 a.m. to 4 p.m. to support patient needs during their procedures. Patient census must be considered when staffing nurses. On a high-volume day, six to seven nurses are staffed in our GI lab. The seventh nurse serves as a “flow” to the bronchoscopy lab and assists in endoscopic retrograde cholangiopancreatographies (ERCPs). The charge nurse directs the flow of patient care in the unit in most cases. He or she keeps abreast of add-ons and cancellations, and assigns staff to cover specific areas in the labs as needed. All staff must take an active part from the moment the consult is written by the nurse practitioner or physician, to the moment when the patient is being scheduled by the clerk. We see an average of 20 patients each day. Of course, there are variables that may cause this census to fluctuate.

The efficiency of patient flow does not start when the patient arrives on the date of his/her procedure, but at the time the consult is written. If the patient is an outpatient, which accounts for approximately 85 percent of the patients we see in the GI lab, the clerk mails the scheduled appointment date and time. The instructions that are mailed to the outpatients include a hospital policy regarding the requirement that a driver consent to transporting the patient following the procedure if he or she has received medication for sedation. By including this information, all parties are aware of what is expected on the day of the procedure.

Strategies for Effective Patient Flow -Outpatient Resources

Having sufficient resources is a key element is keeping the flow constant. The staff must have all of the supplies for patient care on hand. For instance, in the endo suites, we have storage carts on wheels that the nurses keep stocked with IV start kits, IV catheters, saline flushes, standard 2×2s, tape, etc. C-lockers are located in each endo suite to house a moderate supply of linen. Each suite and recovery room has needle and glove boxes strategically placed so that they are easily accessed by the nurses and technicians.

The physical layout of the work area can increase productivity or hamper patient flow. Patient prep areas and procedure rooms should be easily accessible to patients from the reception area.

Once the preliminaries are done, the patient is ready to be seen by the physician. The next step is the signing of the electronic consent. During this time, the physician explains in detail the procedure that is to be done and gives the patient an idea of expected outcomes following the procedure.

Technicians play a major role in the entire process. Prior to each procedure, the technician sets up the scopes and lays out supplies that are essential to the completion of the various procedures. When all of the medical professionals are in place, the paperwork has been done, and the OR suite has been set up, everything is ready.

Once the case is completed, the turnover of the suite is crucial to continued patient flow. The nurse then takes the patient to the recovery area, where he or she is monitored and stabilized for an additional 20 to 30 minutes. Once the patient is stable, discharge instructions are given and the patient is discharged home or back to the appropriate area. The flow continues from one patient to the next, until all patients have been seen. This method has proven to be very effective in keeping the patients flowing lab in a timely manner.

Case Management

Effective case management is also a key component in moving the patient through his or her inpatient hospitalization course of stay. Transfer coordinators assist in the determination of patient placement within the medical center. Each case must be handled differently, taking into consideration what is actually going on with the patient. Discharge planning begins at admission. Once the determination has been made that the patient is appropriate for admission and has been placed, the assumption as to outpatient care needs are made by the designated social worker, nurse or medical affiliate.

Several things may be taken into consideration during this process:

1. The patient’s past medical history
2. Socio-economic status, and
3. Estimated length of stay based on the hospital quality management department’s certifying criteria, for example, Milliman and Robertson¹ or InterQual².

Communication

Communications among the patients, nurses, technicians, physicians, and clerks is important in moving the patient forward through procedures and to recovery. Patient compliance with taking preparations for procedures and following through with recommended diets helps to ensure visualization and, in most cases, completing the procedure in a timely manner. Patient teaching is needed in virtually every case regarding the procedure and what is to be expected during the recovery process. Some barriers in communication in this setting may include: sensory or cognitive deficits or the patient’s lack of a telephone or valid address. The latter barrier may even result in a delay in a patient receiving care. Among staff and physicians, communications prior to and during a procedure set the tone for timely case completion. Physicians communicate the drug and dosage to be administered for the patient to the nurse when starting the moderate sedation process and during the procedure. The case then moves right along. Once the procedure is completed, the patient is taken to the recovery room and a belief report is given to the receiving nurse. The suite is then prepared for the next case.

At times when the patient wait times become extensive in the GI lab, patients and their drivers may become disgruntled. In most cases, a patient waiting for a procedure has had nothing by mouth, and may have been on a special diet for a couple of days. There is a prep required for the colonoscopies. In many cases, the patients whom we see travel long distances ranging from 30 to 250 miles. Under these circumstances, anxiety may even start to set in, especially if this is his or her first procedure of this type. All of these elements prompt unpleasant events when the wait times are prolonged. It has been my personal experience that if someone talks to the patients and their drivers, they have an appreciation that an effort is being made to deliver the best possible care, and they generally calm down. If the patient can not be appeased, they are given a chance to reschedule their appointment. It is very important to keep the lines of communication open with all parties involved in the care of patients.

Conclusion

In conclusion, patient flow and efficiency plays a major role in patient satisfaction. One of the National Performance Measures when looking at quality of care is the assessment of patient satisfaction. When patients are seen in a timely manner and they feel that they have been handled with care, they report back in a positive way, regardless of the results of their test or procedure.

Key components in efficient patient flow include the physical layout of the surgery center or unit, staff support, availability of resources and supplies, movement through the center in a timely fashion, and effective communication by all parties involved. Whether the setting is an outpatient clinic or inpatient stay, patient flow is of great importance. From the moment of the outpatient appointment to admission to an inpatient unit, patient flow affects various facets of the healthcare system. When an appointment is cancelled or the patient does not show up, lost man-hours spent on the case can be calculated.

Ultimately, we are looking at patient satisfaction. In the long run, the effectiveness of patient flow and other efficiencies yields quality patient outcomes. No matter the stakeholder – be it local, state or federal government, or private healthcare system, they can all benefit from the strategies of effective patient flow.

References

1. Milliman and Robertson Care Guidelines: http://www.careguidelines.com
2. InterQual http://www.interqual.com/IQSite/

Phyllis Ogbode, RN, MSN, is the nurse manager of the GI and bronchoscopy labs at Tennessee Valley Healthcare System in Nashville, Tenn.

Implementing ICD-10

What is changing and why? Let’s start with a dry but very important accounting of the raw facts. The Department of Health and Human Services (HHS) has mandated industry-wide adoption of ICD-10-CM and ICD-10-PCS code sets by Oct. 1, 2013 2011 . ICD-10-CMS will affect all components of the healthcare industry. Ambulatory surgery centers (ASCs) will not be affected by ICD-10-PCS unless they are utilizing ICD-9-CM volume 3 for inpatient procedures.

The two major changes in the ICD-9-CM to ICD-10-CM code sets are structure and detail. The codes will move from a numeric five-character size to an alphanumeric seven-character size. At current count, there are approximately 17,000 ICD-9-CM codes and the possibility of 155,000 ICD-10-CM codes. The codes are far more specific which will allow for greater accuracy.

The reasons for changing the codes are simple and undeniable. The current ICD-9 classification system is ambiguous and lacks enough available codes to address classification of new diseases, illnesses and procedures. As a result, disparate procedures often utilize the same ICD-9 code. This inherent ambiguity often results in costly and inefficient handling of claims. Simply put, this change is necessary, unavoidable and overdue.

For non-inpatient facilities there are some things that will not change. CPT codes will continue to be used for billing, and the greatly expanded ICD-10 codes will now be used for diagnoses. Despite many rumors to the contrary, unspecified codes and basic documentation are found in ICD-10-CM. This gives providers the ability to code using general statements like hypertension and diabetes, and the option to use more detailed codes when necessary. Some providers have expressed concern that they will no longer be able to use “Superbills” after the switch, but a quick search of the American Health Information Management Association (AHIMA) Web site will calm their fears. While AHIMA does not specifically endorse “Superbills,” they do provide many examples on their Web site that are ICD-10 compatible.

Recommendations For An Effective Implementation

 

Start a cross-functional team that includes representation from both business users and IT staff. Although the IT staff will play a major role, the project of ICD-9 to ICD-10 implementation must be owned by the business users/organization executives. Oct. 1, 2011 may seem far away, but most analysts agree that the significance of the effort will require an implementation schedule of 24 to 36 months. As I write this article, there are only 34 months left. The time to start is now. The failure to do so will present challenging consequences.

When your implementation team is in place, start by performing an inventory of all applications and identify the ones utilizing ICD-9 codes. This list will include applications used for: scheduling, billing, electronic medical records, claim submission, quality management, performance measurement, compliance and stand alone reporting… just to name a few. Be careful that standalone applications and databases are not overlooked, especially if they are home-grown. An accurate accounting of all applications and their functions is critical to ensure proper planning of all future tasks.

Contact all of your vendors and ask them the following:

• Will the application support the new ICD-10 codes?
• Will this be an upgrade to the existing application or a new installation?
• Will hardware requirements change?
• What is their timeline for supporting ICD-10? (ask for a document)

The good news is that most vendors are including support for the new codes in their standard version upgrades. However, many vendors plan to grandfather their current application and require you to purchase a brand new system. This will require extraction of patient data from the old system to the new one, which is rarely a smooth or accurate process. Your staff will need to be trained on the new software in addition to the new codes.

There may also be many systems supported by your IT staff because they are homegrown; vendors have gone out of business; or vendor support has been dropped for applications that were grandfathered long ago. Any one of these circumstances will likely overwhelm the department, and outside assistance may be necessary.

With customization comes complication. Here is where the rubber meets the road. Do you use a stand-alone, homegrown application or database; a standalone reporting system; non-standard customized reports; customized applications to automatically share information; and/or rely on a data warehouse for management of multiple centers? If you answered yes to any of these questions, your project just entered the danger zone.

While many applications are easily upgraded, don’t be fooled into thinking this a standard upgrade. The move to ICD-10 will require major changes to the structure of supporting databases that in most cases will break or invalidate customized applications and reports. These applications will need to be re-written to accommodate the new codes. Every report will need to be re-written to accommodate both ICD-9 and ICD-10 codes. To simplify the message just remember that anything customized must be re-customized.

There are some emerging technologies that will make the transition easier. Several companies including IBM and 3i Infotech are developing vocabulary servers that will allow applications to exchange information in ICD-9, ICD-10 or both.

It is imperative to know how all of this sits in your timeline. Each application may support the new codes at different times. This must then be reconciled with the exact dates that each payor will begin requiring the new codes for billing. Each payor may require the new codes at different times as well. Many analysts warn that there may be a period of two years where billing for both codes will be required.

The benefits of moving to ICD-10 codes are realized by everyone. Providers will see more accurate payments and fewer rejected claims; functional support for emerging technologies and services; and consistent accurate data for outcomes analysis. A decrease in rejection rates will reduce the amount of work for both payors and providers, allowing for faster payment of claims. Improved disease management will result in better care for patients. While there is no denying the challenges that lie ahead, the long-term benefits will far outweigh the pain.

Glen Pridgen is healthcare product specialist at 3i Infotech Inc.

Who’s Who in the Ambulatory Surgery Industry — The Facilities

As part of Who’s Who in the Ambulatory Surgery Industry, today’s surgicenter also honors the excellent facilities that make up the backbone of the industry. These five centers, stretching from North Dakota to South Carolina, cover the gamut of outpatient specialties from laparoscopy to orthopedic surgery, consistently bringing the latest technological advances and convenience to their respective operating rooms and patients.

Surgical and Endoscopic Center of Stephenville

The Surgical and Endoscopic Center of Stephenville (SECS) opened in October 2006. The center is the first facility of its kind in Erath County, Texas, offering a wide variety of day-surgery procedures including colonoscopy and other digestive evaluations, cataract and laser eye surgery, laparoscopy, podiatry, orthopedic, pain management, as well as ENT procedures.

Unlike outpatient surgery at hospitals, the Surgical and Endoscopic Center runs on a strict schedule where every effort is made to adhere to the time the patient is scheduled. Patients are not postponed due to an unexpected higher priority case being scheduled in their place.

The modern design and image of comfort is what patients have come to appreciate. The 12,000-square-foot outpatient surgery center boasts state-of-the-art medical equipment and cutting-edge technology which includes two surgical suites, a GI procedure room, as well as a YAG laser room.

The center currently has 14 credentialed physicians on staff, but will soon be adding more as the number of services increases. The building was designed with future expansion in mind, complete with a tear-out wall. As new physicians and procedures are added, more operating and recovery rooms could become a reality. But before that can take place, new services that are currently unavailable to patients in the area will need to be added.

The facility’s medical director, Janie McMillion, MD, said when planning the facility, a lot of detail was put into the center’s appearance. Creating a place for patients to enjoy was important to her. “I believe it’s important for patients to get the feeling that they will be well taken care of during their stay,” she said. “Creating a beautiful place helps us give them that comfort.” McMillion also said that visits to the surgery center are designed to be brief. Surgery patients stay an average of four hours.

Another advantage for patients at the center is their out of pocket expense. Surgeries performed at outpatient surgical centers cost patients one-half to one-third less than in the hospital outpatient setting. All of the worry for the patient’s cost factor is erased due to the global fee billing. Once a patient is scheduled, they know the exact cost of the procedure with no surprises when they receive their statement.

Two years ago, the dream of an outpatient surgery center became a reality, and SECS continues to think of new ways to better serve their patients. Patient satisfaction surveys have been very positive. Sheila Poston, RN, director of nursing, states, “We are continually striving to provide the best care in the most efficient manner. We have a very caring and compassionate staff that always places the patient first.”

Bismarck Surgical Associates

Bismarck Surgical Associates LLC, of Bismarck, N.D., is a multispecialty (orthopedic, ophthalmic, ENT, pain management and oral surgeries), free-standing, physician-owned ASC with three ORs. The center will be celebrating its 10th anniversary in February.

“(We) take pride in the services we offer our community as evidenced by our high approval ratings,” declares Todd Neiss, business manager of Bismarck Surgical Associates. We run an efficient operation averaging 9.62 regular hours per case. This, along with an effective cost control program results in a net income to net production ratio of 42 percent. Our staff is second to none and we work hard to retain our staff, as evidenced by our low turnover rate. In 1999, we had 16 FTEs and of those, we still have 10 original staff members and we have grown to 32 FTEs.”

Parkridge Surgery Center

Parkridge Surgery Center is a 12,000-square-foot, freestanding, multi-specialty ambulatory surgery center in Columbia, S.C., that opened in November 2003 as a joint venture with Palmetto Health, the state’s largest nonprofit healthcare system, and individual physicians.

Parkridge Surgery has consistently ranked in the top 10 percent in the nation in both patient and employee satisfaction and most recently, Palmetto Health was named among the 100 Best Places to Work in Healthcare by Modern Healthcare. “Our staff, without a doubt, is what sets us apart from everyone else. We are completely committed to providing high quality, patient-centered care and are continually looking for ways to improve,” says administrator Emilie Keene.

Clinical director Lisa Waters-Davis agrees. “We have such a strong quality improvement program with active employee participation. We don’t focus on problems, we focus on solutions.”

Timberlake Surgery Center

Situated in the beautiful West County area of St. Louis, Timberlake Surgery Center began operations in the summer of 2003 and relocated to the present location in 2006.

Timberlake is a multi-specialty center that includes orthopedics, pain, podiatry and plastic surgery. Occupying 14,988-square-feet of space, the center has a total of four ORs and one procedure room. Presently, there are eight active physician partners that represent 68 percent of the total annual case volume and 93 percent of the surgical case volume.

In 2004, the facility joined with Symbion Healthcare as a corporate partner, who exhibits a collaborative relationship with energetic and visionary leadership; together delivering exceptional value.

A measure of success is shown by the satisfaction of patients, physicians and employees. Through its entire group of employees, anesthesia and dedicated physicians living up to its core vales, Timberlake is a supportive workplace for staff that focuses on quality, services and cost.

“Being part of an effective group of healthcare providers makes taking care of patients an honor instead of a job,” states Kim Thornton, clinical director at Timberlake.

“Our caring and compassionate staff, anesthesia and surgeons make the difference,” states Beverly Baker, administrator at Timberlake.

Patient satisfaction is a top priority for the center and is monitored monthly. One service that has proven to be beneficial to patients is partnering with a local pharmacy to allow patients to leave with their prescriptions filled, saving the extra stop at the drug store. Patients continually rave about this added service.

In August, Timberlake recently joined the efforts of ASC Association’s National Open House Day to welcome local and state representatives. More than 50 people attended the Aug. 13 event, including a gubernatorial candidate and several local state legislators. In addition to touring the facility and meeting with the physicians, attendees received informational packets on the benefits of ASCs, as well as an overview of pending federal legislation. This event allowed us to become more than just a name to them. “If we don’t step up to provide leaders with this information, no one will.” said Baker.

Yellowstone Surgery Center

Specializing in procedures ranging from pediatric to geriatric, Yellowstone Surgery Center in Billings, Mont., has been offering state-of-the-art ambulatory surgical and pain management care since 2002. Owned and operated jointly between 50 independent physicians and the Sisters of Charity of Leavenworth Health Systems, over 7,500 patients are seen annually in the facility’s six ORs and its pain management center.

Yellowstone has a patient satisfaction rate of 99 percent, which reflects its commitment to caring, to quality and most of all, to an excellent patient experience.

In a time when medical professionals are highly recruited, Yellowstone has little staff turnover. In fact, 90 percent of the original staff has remained at YSC since it opened. That longevity means that patients have a positive experience and a familiar face every time they visit.

Healthcare reform campaign faces big hurdles

President-elect Barack Obama stated loudly and clearly during the election campaign that all Americans have a right to affordable healthcare. Now he faces significant challenges in boosting coverage for the uninsured. His basic strategy is to expand federal and local government programs and to require employers to “play or pay” to support insurance for workers. Obama stopped short of backing a mandate for universal coverage as advocated by many Democrats, but his proposals raise the prospect of increased government involvement in the nation’s healthcare system.

That said, the need to address rising unemployment and slow economic growth may force Obama to seek more limited health policy changes in the short term. The soaring federal budget deficit also will intensify the hunt for ways to cut healthcare spending, an exercise likely to squeeze insurance operations.

CHILDREN FIRST

An early initiative will be to expand the State Children’s Health Insurance Program (SCHIP) along with federal support for state Medicaid programs. President Bush twice vetoed legislative proposals to make SCHIP more generous, prompting Congressional leaders to hold off on further action. Now SCHIP has to be reauthorized by April, putting it at the top of the political agenda.

Expanding SCHIP and Medicaid would be a first step in fulfilling Obama’s promise to provide healthcare for every child. Moving some 25 million people off the uninsured rolls will be more difficult. Obama has proposed to mandate that large and medium employers support “meaningful” insurance for workers or pay into a fund. Those without work-based coverage and small employers would gain subsidies and access to private insurance options or a government-sponsored National Health Plan through a National Insurance Exchange.

To offer plans through the Exchange, insurers will have to provide comprehensive benefits and meet standards for quality and efficiency. Plans also will have to issue coverage to all applicants and to set premiums without regard to health status, a policy predicted to raise the cost of insurance for young and healthy individuals.

CUTTING COSTS

Achieving these changes will be challenging-and expensive. The Obama reform proposal was pegged to cost between $1.2 trillion and $1.6 trillion over 10 years (2010 to 2019). Paying the bill without adding to a soaring federal budget deficit will require serious cost-cutting.

Like his opponents, Obama has a list of savings options. Expanding health information technology would net $60 billion over 10 years. There are potential savings from expanded DM programs, coordinated care models and P4P initiatives. And the president-elect has jumped on the comparative effectiveness bandwagon, predicting that research on the relative effectiveness of alternate treatments would cut costs by reducing unnecessary care.

Because these strategies yield little in the way of near-term savings, a more popular tactic will be to cut government outlays to insurers and drug makers. Democrats want to eliminate “excess” payments to Medicare Advantage plans, a change Obama says would save $135 billion. And the reformers propose to revoke the Medicare “non-interference clause.” Direct negotiation of payments for drugs covered by Medicare plans is predicted to save about $20 billion, but it also could raise plan costs and limit insurer flexibility in offering drug plans with differences in formulary coverage, copayments and premiums.

Bundled payments expected to reward providers

It’s the new P4P

In the mid-1990s, Medi care tested a bundled-payment reimbursement arrangement for cardiac bypass surgery at four hospitals and was able to document savings. Provider pushback hampered further efforts, and the bundled payment concept died out. Until now.

Experts worldwide are now recommending some type of bundled payment system that incorporates a pay-for-performance (P4P) component. However, as James Bentley, senior vice president for policy planning at the American Hospital Assn., said in the Washington Health Policy Week in Review, “We’ve got to learn to walk before we can run.”

The 1990s CMS project was not a rousing success from the providers’ point of view. Some hospitals that lost market share believed the government didn’t promote the project sufficiently to drive the volume they wanted. Hospitals were able to reduce unnecessary testing and make generic substitutions while also reducing lengths of stay. According to CMS, quality directors at those facilities said that increased physician emphasis on avoiding complications was the primary cause for quality improvements.

Medicare estimated savings at 10% however-$42.3 million for Medicare, and $7.9 million for patients and their insurers.

With memories of the failed capitation movement, participating providers were reluctant to adopt bundled-payment projects anytime soon, and the majority believed they should have received extra payments to cover the expense of implementing the new billing arrangements.

Current P4P trends have renewed interest in bundled payment and other types of payment reform, but this time, payers are counting on widespread provider support now that P4P has become more mainstream. In fact, a 2007 Med-Vantage national study showed that in 2003, there were only 39 P4P programs, but that number grew to 148 by 2007.

The new CMS Acute Care Episode (ACE) project, scheduled to begin January 1, 2009, will be conducted in Texas, Oklahoma, New Mexico and Colorado, although there will be only one demonstration site in each market during the program’s first year. Rather than the usual separate payments for Part A and Part B, CMS will provide a single payment to hospitals and providers for 28 cardiac and nine orthopedic inpatient surgical services. Because the predetermined payment will be split between the hospital and physicians, Medicare hopes they will collaborate more closely to avoid complications and unnecessary procedures, thus preserving more of the payment for themselves.

Should the program be successful, it doesn’t mean that there will be a one-size-fits-all approach to bundling payments in the future, experts say. As long as the payment model is fair, understandable and takes provider concerns about risk into account, the system should naturally organize itself around the model to make it more effective and efficient.

Best of all, it doesn’t require a complete tear-down of the current system, according to Stephen Schoenbaum, MD, MPH, the Commonwealth Fund Commission’s executive vice president of programs and executive director of the Commission on a High Performance Health System.

“The structural elements that we need currently exist in our healthcare system, but we need them to be better organized,” he says. “We don’t want fragments of care, because that leads to fragmented payment. By bundling care and payments, we take one step closer to caring for the whole person.”

RISK ADJUSTMENT

In August, the Commonwealth Fund Commission published “Organizing the U.S. Health Care Delivery System for High Performance.” While the report focused on fragmentation of care, particularly at the community level, payment reform was one of its major recommendations.

Ideally, the payments would bundle all related medical services, from initial hospitalization to a defined period post-hospitalization, including preventable rehospitalizations. Payments also would be risk-adjusted to avoid adverse patient selection. The report continues to say that P4P should be expanded and that the more bundled the payment mechanism, the greater the proportion of the payment should be tied to performance.

The study revealed four significant findings:

• The ideal delivery system is achievable; many existing delivery systems already have many of the necessary attributes;
• There is more than one way to organize providers to achieve those key attributes;
• Although there are diverse approaches, some form of organization-mechanisms that can work across providers and settings-is necessary to achieve those attributes; and
• Leadership is a critical factor in the success of delivery systems.

However, Dr. Schoenbaum acknowledges that if we build it, they still might not come. After providers’ experience with capitation in the 1990s, the majority might still be gun-shy about assuming financial risk for providing care.

“To encourage [a bundled payment system], we’re going to need to give significant attention to the incentives that we offer providers,” Dr. Schoenbaum says. “Anything that sounds remotely like capitation is going to cause them to say, ‘We’ve been there. It was awful, and we aren’t doing that again.’”

To get provider buy-in, payers will need to reassure providers that their needs have been addressed. If insurers agree to pay providers fairly, and providers are given the freedom to organize themselves in a model that allows them to provide high-quality care, then “we can at least sit down at the table and start to figure out the details,” he says.

CREATING THE FIRE

The healthcare payment model of the future might be named after a mythical story from the past. According to Greek mythology, the gods kept the secret of fire from mortals, but Prometheus-one of gods’ archrival Titans-taught humanity how to create fire.

True to its name, Prometheus Payment Inc., a not-for-profit corporation launched with a $6 million grant from the Robert Wood Johnson Foundation, was created to shed light on these dark days of healthcare payment reform. The model’s moniker, PROMETHEUS, stands for Provider payment Reform for Outcomes, Margins, Evidence Transparency, Hassle reduction, Excellence, Understandability, and Sustainability.

By creating common clinical incentives for all parties, the organization strives to improve quality, lower administrative costs and facilitate better clinical coordination. Its payment model is expected to create an environment where doing the right things for the patient helps providers and insurers do well for themselves. Pilot projects target lung and colon cancer through Stage III; three interventional cardiology diagnoses; knee and hip replacements; primary care of diabetes and depression; and preventive care.

“The PROMETHEUS case-rate payment model is somewhere between pure fee-for-service and pure global capitation,” according to Francois de Brantes, MS, MBA, national coordinator for both Prometheus Payment and Bridges to Excellence. “It’s an event-by-event, patient-by-patient payment that is calibrated according to risk factors and reflective of fee schedules and other negotiated rates. It seeks to be fair to both payers and providers, while still maintaining patient centricity.”

The PROMETHEUS model is based on evidence-informed case rates (ECRs), which are risk-adjusted, prospective or retrospective payments given to physicians in inpatient and outpatient settings to care. The PROMETHEUS ECR model calls for a portion of the payment to be withheld and redistributed based on providers’ performance on measures of clinical process, outcomes of care and the patient’s experience.

“When you create a bundle of services, you are essentially giving it a budget,” de Brantes says. “The bigger you make the bundle, the greater its budget, as well as its reach across different providers and settings.”

De Brantes hopes to be able to observe a measurable reduction in preventable complications.

In other words, when physicians are ready to make a referral, they should increasingly be asking themselves how well certain hospitals will treat patients during their stay. Hospitals, in turn, should be thinking about how likely patients are to come back for readmission after they’ve been discharged.

According to de Brantes, the scorecard, the rates of potentially avoided complications, and the dollars associated with them cut across all providers who touched that patient.

“That’s how we maintain patient centricity while rewarding providers for making good decisions about who they align themselves with in the community,” he says.

WHAT YOU PAY FOR

The United States is not alone in its struggle to improve healthcare delivery and ways to pay for it. A report issued in June by PricewaterhouseCoopers’ Health Research Institute showed that about two-thirds of health leaders from 20 countries, including government and private payers, see problems with their current systems and are now studying payment models that use incentives to better balance access, quality, efficiency and demand.

“Health systems are at risk of cavitating financially, and there is tremendous focus on cutting costs,” says David Chin, MD, leader of PwC’s Health Research Institute, “but cutting costs at the expense of quality and efficiency is economically and socially devastating. This is why a reimbursement model that properly aligns incentives to promote quality and efficiency is so vital to future sustainability.”

In the report, titled “You Get What You Pay For: A Global Look at Balancing Demand, Quality and Efficiency in Healthcare Payment Reform,” cost control was ranked as the most important factor in developing future payment systems-more than quality, efficiency or demand.

On the other hand, 81% of global health executives said that better coordination of care would do the most to improve quality in their country, and that paying bonuses to hospitals and physicians for care coordination was among the top five methods needed to improve quality and efficiency.

“In almost every developed country in the world, healthcare costs are growing at unsustainable levels,” Dr. Chin says. “That’s because, like the United States, patients are paying for volume, not the outcome. Every country needs to address healthcare cost inflation, and one of the ways to do that is to change the payment structure. The hope is that, in a bundled system, people will be paying for an episode of care, and we can put parameters around the quality of that care as well.”

One of the first challenges that a bundled payment system might face here is whether it will run afoul of the law-as Dr. Chin says, the Stark rule against physician self-referral might come into play.

“Other potential issues include how to allocate the savings between hospitals and physicians, how to rate and define what ‘quality outcomes’ means, and the potential for the cherry-picking of simpler cases while leaving the more complicated ones for someone else … a new version of adverse selection,” he says.

However, since Medicare is the nation’s largest payer, health plans tend to follow along, Dr. Chin says. When CMS announced its [bundled payment project], a lot of the payers around the country began examining the idea more closely.

“Today, managed care executives should be thinking about their contracting strategies and ways they can move away from paying per unit of volume,” he says. “If they negotiate the per-unit rate down, all it does is provide incentive for providers to increase the number of units.”

He advises that payers should look for payment schemes that motivate physicians and hospitals to reduce volume.

Commonwealth Fund recommendations

1 Payment reform with arrangements to bundle all related medical services

2 Risk-adjusted payment to avoid adverse patient selection

3 Expansion of pay for performance

4 Payments tied to performance proportionate with the degree of bundling of services

Source: The Commonwealth Fund

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