Managed care payers worship data, and ED managers must get religion if they hope to cut a fair deal, says Michael Williams, president of The Abaris Group in Walnut Creek, CA. But, gathering accurate data on outcomes, utilization, and outliers doesn’t mean they must invest in multimillion-dollar clinical information systems right off the bat.
"While I will agree that most health care systems need to acquire comprehensive IS capability in the near future, if you are not there yet, there are a lot of datatracer data, focus studiesthat are available to you," he explains.
For example, many EDs complain that patients are not authorized for a particular service and they need that service, he states.
A simple database can be set up to keep a log of patients who are denied authorization by their insurance, and this information can make a convincing case.
"If we are sending chest pain patients out of the ED, then the payer wants to know about that," he says.
What the payer often hears are anecdotal, emotional stories, and that won’t sway them, he says.
"We are not running managed care systems anymore on anecdotal storieswe’re doing it based on objective evidence."
"Tracer" issues are representative samples of cases that can represent a larger problem, Williams says.
"Say you’ve got a million events and looking at a million events is too much work, trying to collect data and pulling all the records. If you feel there is a focused area that would be productive for you, go collect data on that effort," he notes.
If an ED manager feels the department has a problem with downcoding, a good starting point would be to look at a high-yield issue like critical care codes and track the specific outcome. Conducting a focused review can provide information that is representative of what is going on across the whole spectrum.
Although there is a level of discretion with level 2 or level 3 codes, there is a high probability that with a critical care code, that is really what the bill should be for, Williams says.
"I just saw in a physician report the other day that when they are being paid for intubation they are only being paid for 90% of the charges," says Williams. "That’s 10% that are being rejected.
"Give me a break! Either they are intubating or they are not."
With that kind of information, the department can go back to the payer to renegotiate.
"You can say, OK we haven’t done a complete study, but in these two or three areas we feel we are not being best served. We did intubate these people, by the way. We saved their lives.’"
The "Other" Side: Payers Discuss Emergency Services
As health care dollars become increasingly scarce and competition increases, MCOs remain determined to reduce the amount they pay out in "inappropriate" emergency charges, either by working with ED groups to hold down costs or working around them, say two industry veterans.
"First of all, what we want from the ED is good, quality care," says Edward Pollard, MD, deputy medical director for Harvard Pilgrim Health Care in Boston. "That’s number one. And do it in a cost-effective waythat’s number two."
Harvard Pilgrim is a non-profit, mixed-model HMO formed in May 1995 when two large HMOs, one a staff model HMO and the other an independent practice association (IPA) model, merged.
Under the staff model, members’ unscheduled care is only paid for if they present at one of the plan’s EDs, Pollard says, though this rule does not apply if the complaint is a "life or death" condition.
Under the IPA side, members can present to any ED, but they will pay a copayment. The plan requires prior authorization under the IPA model, but does not retrospectively deny payment or downcode services after they have been given, he says. Consequently, the plan’s costs for emergency care in the IPA group are three times what they are in the staff model portion.
"It makes a big difference," Pollard says.
Need for more understanding
Providers, particularly emergency medical providers, need to understand the different types of MCOs and what motivates them, and move beyond the "adversarial" relationship that is so common, says Pam Morris, the CEO of Dayton Area Health Plan, an 11-year-old, all-Medicaid managed care company.
"It’s been said that if you’ve seen one HMO, you’ve seen one HMO, and that’s true," Morris explains. Non-profit HMOs, particularly Medicaid HMOs, have different methods of operating and different needs from other companies. "There are still a lot of adversarial relationships out there and I hate to see it."
Three years ago, the Dayton plan began experiencing the beginning of what was to be a 19% drop in their capitation rates, the amount of money the state gives them to provide care for each Medicaid patient. The health plan was also severely criticized by the state, Morris says, because of its inability to reduce the amount of primary care delivered to their members in the ED.
"We had some unbelievable utilization patterns," she says. "I wouldn’t even want to repeat them."
Faced with a population that was used to receiving care in the ED and who, according to the plan’s own surveys, believed the care provided by the ED to be "better" than care in a doctor’s office, Morris contacted area EDs to seek their help in either getting the patients out of the department or discounting their charges for primary care.
She got almost no response.
"Only one hospital would deal with us," she recalls. "They were one of the first hospitals to have an urgent care component in their ED."
The way they resolved the problem, was to create a network of after-hours care centers, including hospital and free-standing urgent care centers, Morris notes. The remaining EDs immediately saw their volume drop significantly.
"That brought most of them to the table," she says.
The network has now expanded to include more hospital-based urgent care centers, and the plan’s ED utilization rates have dropped significantly, though they are still a concern.
Incentivizing ED physicians
Morris believes she was at first ignored by the EDs because there was no incentive for them to negotiate with her.
"We were paying for everythingthey loved that arrangement," she says.
Motivating emergency physicians to control the cost of the care they provide or find alternative dispositions for some people they treat is one of the biggest challenges he faces, says Pollard.
"You take for granted they are going to provide quality care," he says. "But in doing that, they can use a tremendous amount of resources."
Pollard says he doesn’t want to arbitrarily limit the use of ancillary services, such as x-rays or CAT scans, just to encourage physicians to find "the balance of what constitutes good, quality care in a cost-effective manner."
One way to do that would be to allow the physicians to participate in capitation in the same way many primary care and other physicians are, he says.
"The challenge is how to do that. You have to think up some way to reward them for practicing cost-effectively," he says. He knows of no hospital ED that has assumed any risk-sharing arrangement with an insurance company using capitation, and he acknowledges there are problems with capitating emergency services providers.
"You’d have to include the hospital as well because their resources are being utilized," he says. "If the physicians were salaried, the hospital would have control of [how they would be rewarded]," he states. "You have to work out some mechanism by which the hospitals and physicians could share in the surplus generated by effective management."
If other physicians in the system are capitated, it might be difficult for the emergency physicians also to work under that arrangement, he says.
"If the emergency room physicians are capitated and the PCPs are capitated, the emergency room physician doesn’t have as much incentive for the patients to come to the ED," he says. "However, if the PCP is aware that the ED is also capitated, their tendency when they’ve got a full office is to say . . . I’m all full today, but you can go to the emergency department.’"
Developing cooperative relationships
Both executives say they would like to see more cooperation between providers of emergency services and managed care.
In several hospitals that the Dayton plan contracts with, they have agreed to pay special rates for urgent care, observation services, or other services that the department will separate from their standard emergency fee schedule, says Morris.
"That’s something we like to see," she says.
Pollard would like to see EDs assuming the responsibility for arranging step-down care for patients who are ill but don’t necessarily need an inpatient stay.
For example, he notes, many elderly patients who live alone and have trouble caring for themselves will present to the ED with minor health problems.
"They are sick, but not so sick that they need to be hospitalized," Pollard says. "Yet, when you are faced in the emergency room with this poor soul, the easiest thing is to just admit them to the hospital."
It would take more effort, for example, to arrange a placement in an nursing home, perhaps holding the patient overnight in the ED and then making arrangements for the next day, Pollard says.
Developing a good working relationship between MCOs and ED directors would facilitate these kinds of changes, as would improved communication between the ED and primary care physicians, he says.
Some providers and health plans are seeking solutions on a broader level, Morris says.
The state of Ohio’s Department of Health and Human Services has established an Emergency Department Statewide Workgroup comprised of emergency medical providers, Medicaid payers, and primary care providers to identify problems associated with access to the ED and problems with payment, says Morris. The group has just had its first meeting and will work collaboratively to find solutions.
"It’s a way to bring parties to the table and consider the issues. I think we can make some real progress as long as we are all candid," she states.
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