Keep tips in mind when software shopping
Vendors pack frills into grouper Be selective
[Editor’s note: This is the first of a two-part series on ambulatory patient group (APG) technology. This month’s article reviews the market for APG software, with tips on what to look for in products. Next month, we feature suggestions on how to integrate the software into your facility’s existing information system.]
A director of patient accounting at the Medical College of Ohio Hospitals in Toledo hasn’t purchased the necessary software to group his CPT-4 codes into APGs. He can’t.
Blue Cross and Blue Shield of Ohio in Columbus, which began using APGs to pay facilities in 1995, doesn’t make the software available to contracting hospitals and hasn’t released its version to vendors. "We send [Blue Cross] our claims. They group the codes and consolidate the procedures. But do we trust what they’re doing?" asks Jeff Feasel, director of patient accounting at the Medical College of Ohio Hospitals.
In March, Blue Cross plans finally to make its APG grouper available to the public.
Fortunately, most current versions of the APG grouper are easy to obtain. But in most cases, choice isn’t a factor. "You go with the version in use by your payer and hope a vendor carries it," says Feasel.
Fortunately, the handful of vendors that carry APG products are likely to market at least one of 10 variants of the HCFA Version 2.0, the model on which virtually all current APG software are based.
Challenges to finding software
For users, the first challenge lies in deciding what you need beyond the software’s two central components: the grouper and pricing module. For example, does your system need a better encoder for CPT coding? Do you require an interface to a database manager file for storing and reporting information?
The second challenge is having to determine which vendor’s products offer the most in value, performance, and expendability. Some firms install the APGs as components in a package of additional features you may not need such as a whole contract management system.
What should you look for in APG technology? Here’s a set of considerations suggested by experts we interviewed (see list of comparisons on APG software, inserted in this issue):
• Look at the big picture.
"The technology itself isn’t significantly different among vendors," says Bob Cohen, CPA, director of business development at IRP Systems, a Wilmington, MA-based vendor. What is different is the way each variant packages and consolidates the codes and classifications.
Iowa Medicaid’s system, for instance, differs from Blue Cross of Washington and Alaska in the weights and values used in packaging and consolidation. These two steps refine the APGs prior to setting prices. The weights and values are based on geographic and facility- specific factors and help determine the actual reimbursements.
Versions can vary widely
There can be other differences: The number of APGs in use can vary. For example, there are 290 in HCFA 2.0 alone. Medicaid in Washington, DC, only covers ambulatory surgery. Also, the discount ratios, which further refine payments and the criteria used in consolidating significant procedures, may differ.
Therefore, look for the software’s ability to let you compare these modifications, says Dave Fee, product marketing manager with 3M Health Information Systems in Murray, UT. The software package should contain a "modeling" capability that permits you to plug in different weights and values and change discount ratios easily to compare how APGs will work for you, Fee says.
• Ask about adaptability.
Four companies currently dominate the APG software market. One such company is 3M, which designed HCFA 2.0 and its Version 1.0 predecessor for the U.S. Department of Health and Human Services in Hamden, CT. Though 3M was first on the block, the firm actively competes with its rivals on price and adaptability.
Adaptability is important, says Jim Harwood, MBA, operations director for medical records at Alegent Health in Omaha, NE. What will you do if three different payers decide to go on APGs and each uses a different version? he asks. Vendors are solving that potential problem by enabling you to modify settings, change rates, expand the APG glosssary, or alter discounts or weights.
IRP folds all 10 current versions of APGs into one product and promises to deliver new ones as they evolve. It incorporates existing methodologies into its software and markets two products: one for the end-user, the other designed for large mainframe software makers. IRP also markets two products, including a simplified, less-expensive version called the APG Calculator.
When evaluating companies, consider whether the vendor will update your facility’s encoder with the latest CPT or ICD-9-CM codes, or even provide one if you need it. And check whether the firm has any licensing agreements with other information companies. The ability to run the software on multiple platforms and network operating systems can save your coders work in re-entering data for reporting purposes.
• Evaluate what you need now and in the future.
APGs may not represent a significant portion of your facility’s revenue base. For Feasel’s facility, Blue Cross’s outpatient share represents about 3% of total hospital revenue. But your ability to batch claims and run thousands of codes through the grouper in minutes could become a future priority.
Therefore, weigh what you need now against future demands. Consider options and time-saving extras such as data importing and exporting features, or batch formats, and information search capabilities. Also, check whether the ICD-9-CM or CPT codes are validated automatically or require additional steps. Decide whether these features are worth the total investment, says Cohen.
You may end up paying for the CPT Assistant or the entire CPT coding manual, which comes with some APG packages, when you don’t need it. Vendors typically pay a copyright fee to the owners of these references, which they then pass on to you. Or they require that you pay the royalties separately.
Some users prefer PC-driven software over on-line systems. But determine whether the vendor’s systems requirements match yours. CodeMaster Cascade, a Santa Cruz, CA, company that specializes in PC-based APGs, sells a Windows-based grouper that requires at least a 7 MB hard drive and 486/33/8 MB of memory.
Prices can increase rapidly
• Balance price with value.
Although prices are competitive, they can rise quickly with the addition of ancillary features and the number of expected users. For example, CodeMaster’s stand-alone Windows APGs begins at $3,000 but tops out at $10,000 for an unlimited number of workstations.
Coding updates and additional program features such as record abstracting and clinical reporting are extra. CodeMaster’s standard product uses HCFA 2.0 specifications. State and payer-specific modifications are treated as separate installations and could cost extra depending on complexity.
3M also offers customized payer modules and frequent coding updates, but its software can run on various platforms ranging from mainframes to standalone PCs. The company did not provide specific prices but did say that fees begin at $1,000 and increase according to the number of users and features. Both 3M and CodeMaster offer a range of additional programs and reference materials that can interface with their respective software.
Meanwhile, IRP’s prices range between $299 for its APG Calculator and $3,500 for the standard batch grouper, which can process up to 10,000 claims per minute. HSS’s prices begin at $4,000 for an end-user model that includes DRGs and $2,000 for a version it licenses to other vendors.
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