How will you fare under the new PPS?
Even if your facility profits under the current Medicare reimbursement system, you could lose money under a prospective payment system (PPS), warns Sam Fleming, a Washington, DC-based financial consultant and principal of Fleming-AOD Inc.
Under the current reimbursement system, rehab providers receive a per-discharge payment based on an average cost of their services during a base year. Because of this, some facilities can use their reimbursement for low-cost orthopedic patients to offset the more costly brain injury or spinal cord patient treatments because it averages to a favorable reimbursement figure, he says.
But under a PPS, providers will get paid less for the orthopedic patients because they use fewer resources, he adds.
Fleming's company has devised a method to take information from a RAND Corp. report to the Health Care Financing Administration and determine how providers are likely to come out under a new PPS for rehab, whether on a per-diem or per-discharge basis. "Under any PPS, the whole deal is to be able to match or beat the average. If you don't, you start losing money. Our analysis will allow providers to see which patients they are treating efficiently compared to the national average," he says.
The analysis uses the patient classifications suggested in the RAND report and applies them on a per-diem and per-discharge basis. The RAND report was based on per-discharge reimbursement, but Fleming reworked it to analyze the data on a per-diem basis as well. "The RAND report contains the most accurate and up-to-date data available. You can never tell what will happen by the time the PPS goes into effect in two years, but this can act as an early warning system," he says.
His analysis breaks data into different kinds of patients in each diagnosis so providers can see what resources are used for each diagnosis and sub-diagnosis. For instance, the program breaks data into all five stroke functional related groups. It also breaks expenses by categories, including physical therapy, occupational therapy, speech therapy, medical supplies, drugs, and routine costs.
"Ultimately, we can break it down to an individual basis so a provider can compare the average to each patient and see who the outliers are," Fleming says.
The company imports legacy data from providers, including cost reports, portions of the billing record, and clinical data such as FIM scores; analyzes it; and gives providers a compact disc containing the data.
[Editor's note: Sam Fleming may be reached at (202) 873-1033.]
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