Rehabilitation Outcomes Reviews-Rehabilitation 2000: Run the gauntlet and survive
May 1, 2000 11 minutes read
Rehabilitation Outcomes Reviews-Rehabilitation 2000: Run the gauntlet and survive
By Russell C. Coile Jr. and Ann Keillor, PhD
The long-term outlook for rehabilitation is promising. But first, rehab providers must survive the present. In the short term, they must run a gauntlet of managed care and government regulation, and many are falling by the wayside.
Rehab has been hammered between market and regulatory forces for the past five years. No quick fix is in sight. The shift to prospective payment and reimbursement cuts in the Balanced Budget Act of 1997 has devastated the field.
The changes have forced the closure of some nonprofit rehab provider organizations and the bankruptcy of rehab chains. Capital investment in new rehab facilities and information systems has halted while providers reassess their market prospects. Integrated health delivery systems are evaluating how to maintain rehabilitation services during the current crisis.
A combination of social forces, medical technology, and shifting economics is fundamentally transforming American health care. The aging of America is propelling a renewed demand for health care services, provided with more attention to customer service and the human side of medicine. The recent study of medical errors by the Institute of Medicine is increasing pressure for accountability for outcomes by the health system.1 Congressional action on proposals for a patients' bill of rights is likely in the next few years, regardless of the outcome of the presidential election. The legislation has bipartisan support and is a high priority for consumers of both parties.
In the year 2011, the first million baby boomers will reach 65, ushering in a new era dominated by the largest generation — 79 million — in the nation's history. For the next 30 to 40 years, baby boomers will dominate the economy, stock market, politics, and health care. As they cycle from middle age to senior status, their evolving needs will set the trends in every sector, from housing, travel, recreation, automobiles, and consumer products to pharmaceuticals and medical care.2
Boomers bring a higher level of awareness about the benefits of health, nutrition, and fitness. Members of this postwar population take more vitamins, get more exercise, and ask more questions of their doctors than any generation in the nation's history. They question authority and can be demanding, fussy customers in terms of quality and service. And baby boomers will have wealth, considering their retirement funds built on stock market gains, as well as their inheritance — an expected transfer of $10 trillion from the estates of their aging parents.
Advantages of aging
The aging of America will reinvent the field of long-term care. The growing number of elderly will propel the growth of the long-term care industry through 2050, but not without major changes in the services, settings, and technologies of care.
Assisted-living facilities may care for all but the most critically ill residents in the future. In-home diagnostic and therapeutic technologies will enable more sophisticated medical care to be provided and monitored in the patient's own home. Telemedical home health visits will supplant visiting nurses, and robots may roam the floors of facilities or even the homebound, delivering meals or supplies and doing routine maintenance chores.
Skilled nursing facilities will provide more short-term rehabilitation services and less long-term custodial care. Terminally ill patients will have choices for dying, and fewer may choose to die in hospitals or skilled nursing facilities, preferring home settings, assisted-living, or hotel-like hospice units. Multilevel continuing care retirement centers will flourish like Club Meds for seniors, in sunny climates with wide-ranging social, fitness, and recreation opportunities as well as health maintenance services.
Economic prosperity may last decades
Information technology, the Internet, and medical technology may propel a 20- to 30-year sustained period of economic prosperity. With the right choices, the current economic expansion can take off on a global level, with another two decades of steady growth and progress.3
This is a once-in-a-generation opportunity. A new global middle class of 1 billion consumers is emerging. It shares values and attitudes for world products such as American films and television, cellular phones from Scandinavia and Japan, and small energy-efficient autos from Asia, Europe, and Latin America. Global prosperity will draw people previously marginalized in the industrialized nations as well as in developing countries. Migrating to new energy-sustaining strategies will help balance the global economy with nature. The burgeoning economy will improve geopolitical stability and temper violent outbreaks.
Technology is the foundation for this hopeful view of the future. Networked computers and telecommunications provide a technology springboard for three coming waves of technology:
• Biotechnology will create a revolution in medicine and health care, including life extension to ages 100 to 120.
• Energy technology such as the fuel cell shows promise as a replacement for oil and the internal combustion engine.
• Nanotechnology, the far-side concept of manufacturing one atom at a time, will take another decade to develop, but it could have even more powerful consequences.
Managed care remains the overwhelming choice of employers, despite widespread criticism from consumers and the media. More than 85% of the 160 million Americans who obtain health insurance at work are enrolled in an HMO or PPO. Consumers are spending up to switch to "lite" managed care products that offer a wider choice of providers and fewer consumer constraints.
HMOs lost 200,000 members in 1999, and the rate of growth fell to less than 3%, while PPOs expanded to more than 90 million members.4 UnitedHealth Group of Minneapolis, one of the nation's largest HMO operators, announced that it was abandoning its policy of requiring prior authorization for most medical treatments.1 Instead, United plans to track provider performance and issue regular report cards to doctors and hospitals comparing their data with the HMO's national guidelines.
Providers beware! Inefficient or high-cost providers may be warned or dropped from the HMO panel. Aetna and other insurers generally are following United's lead, although many plans caution they will continue to provide case management for certain high-cost patients. Managed care's impact may not be as heavy as once feared, according to a recent study by the Lewin Group of Washington, DC.5 Rehab services are likely to fall under managed care's continued oversight, even if prior authorization programs are relaxed.
The Balanced Budget Act has converted the federal government from a passive bill-payer to an aggressive discounter and denier of care. Government reimbursement policy under the act shifted the Medicare program from a cost-based reimburser to the payer-from-hell. Arbitrary payment limits — caps — have been imposed on rehabilitation. Physical therapy, speech language pathology, and occupational therapy are now subject to a $1,500 annual payment cap, regardless of whether multiple providers are providing the services. The actual limit of Medicare payment is $1,200 because the Health Care Financing Administration's (HCFA) policies require a 20% copayment from the patient or another source, e.g., Medicaid.
Hospital-based outpatient programs are exempt from the caps for the time being. That may change where outpatient rehab care is delivered. More complex patients may be directed to the hospital-based programs.
That leaves rehab providers in the very difficult position of cutting off services before the patient has been treated completely or absorbing losses for care provided above the cap. Not providing care can be subject to a federal citation.
For example, NovaCare in King of Prussia, PA, recently analyzed four months of claims under the new regulations and found that 25% of its patients already had expended half of their annual limit, and 2% were over the cap in just four months.6 Medicare caps also are being imposed on the total case reimbursement for rehab hospitals and units, averaging $20,129 per patient per year, and stringent limitations are being placed on hospital-within-a-hospital transfers between an acute care hospital and an on-campus rehab hospital or unit.7
HCFA also will be closely watching rehab patients in skilled nursing facilities to ensure that rehab patients are not being reimbursed at the higher Resource Utilization Group rate after rehabilitation services have been completed.
Medicare's prospective payment system (PPS) is not arriving quite as quickly as feared. Rehab providers have been waiting almost 20 years for the other shoe to drop.
Medicare's conversion of inpatient rehab services to functional-related groups (FRGs)-prospective payment has been researched for some time. HCFA is developing a minimum data set (MDS) that will classify patients much like the tool developed for the skilled environment. Incorporating rehab services into Medicare's PPS has been contentious. Preliminary versions of Medicare FRGs for rehab have circulated widely and have drawn intense criticism from the field.
PPS signposts ahead
Until rehab PPS arrives, watch for these trends:
- Medicare fraud and abuse scrutiny will increase, targeting rehab providers for federal audits. As many as two-thirds of rehabilitation services billed to Medicare may be fraudulent or in error, according to a recent report by the Office of the Inspector General (OIG) of the Department of Health and Human Services.8 The OIG projected that $173 million of $263 million in 1998 Medicare payments for rehab may be for services that were highly questionable or not authorized under federal regulations.
Reporting on a study of 200 Medicare claims submitted by rehab providers, federal auditors charged that more than half the claims involved unallowable or questionable services. The OIG report said many Medicare claims were for patients who "exhibited no functional impairment, who evidenced no active participation with the therapist, and who had no expectation for significant improvement."
The report immediately drew criticism from rehab professionals, who questioned the findings and the application of antihumanistic criteria such as "no expectation for significant improvement."
It is anticipated that cases will be audited using the MDS, medical record, and itemized bills. Any discrepancies identified with how the patient was classified on the MDS and what care actually was delivered and billed will be cause for payment denial or, in some cases, a fraud charge.
- Physiatrists will manage cases and chronic conditions, not acute episodes. Although managed care is not expanding as rapidly as once predicted, the shift toward case management and disease management is a long-term megatrend. Case management today is still a Balkanized competition among plans, providers, and patient advocates hired by rehab patients or their families.
Physiatrists should plant their stake in the ground to assume medical management on behalf of the patient, garnering support from patients and employers and making it easy for health plans to defer judgment to a medical doctor at the rehab provider level. Assuming the role of physician case manager takes the physiatrist out of the primary care role and projects a leadership responsibility for coordinating all services and settings in the course of the patient's treatment plan.
Note that there may be a contentious turf battle between physiatrists and nurse case managers over who should control the patient, especially when the RNs are working for the health plan.
- Training of physical therapists has slowed from a torrent to a trickle. After a decade of high demand, the market for physical therapists has shrunk markedly in the past three years. Many training programs are experiencing fewer applicants and a tight market for new PT hires.
Critics of the over-expansion of physical therapy education programs in the 1990s note that the profession "gloried in the demand for our services, and grew dependent on being courted with jobs and sign-on bonuses."9 Now there is a glut of PTs but few jobs. A current debate in the field rages over whether physical therapy should upgrade its status among the health professions by requiring post-baccalaureate education as a mandate by the year 2002 and encouraging master's-prepared therapists to become credentialed at the doctoral level.10 The "DPT," it is argued, would be the kind of therapist health systems could not live without.
- Health information management is an essential investment in the future. Health care is joining the digital economy, pressured by managed care plans and government agencies for better accounting and patient care data. In rehab services, the Balanced Budget Act requires better documentation for payment, as well as evidence-based treatment, outcomes analysis, and clinical process improvement based on benchmark treatment modalities.11
Extensive tracking of services by CPT-code category will be essential for Medicare reimbursement. Additional reporting may be required in the future regarding medical errors, after the recent Institute of Medicine study. The evaluation of patients based on standards such as activities of daily living must be regularly documented. In the future, rehab patients are likely to be treated by teams of practitioners using computerized care plans, customized for each patient's condition and therapeutic outcomes. The flow of information for patient management must be seamless, accessible, and accurate. Data also must be private and secure under new federal regulations to implement the Health Insurance Portability and Accountability Act of 1996, which will apply to all providers.12
- Waiting for the future will be an exercise in frustration for many rehab providers. The long-term prospects are excellent, but the short-term difficulties will continue until both government payers and managed care recognize the appropriate application of rehab services to reduce costs and improve outcomes. Payers need to take a long-term investment perspective about rehabilitation in the context of disease management and population health improvement.
Providing universal coverage would do much to remedy a health care economy that is short-term in its outlook and uses cost-shifting instead of care management as its dominant approach. The next five to 10 years may be critical in determining whether American medicine continues as a voluntary enterprise model, or a government takeover becomes perceived as the only way to control health costs.
[Russell C. Coile Jr. is senior vice president and national strategy advisor for Superior Consultant Co., an integrated health care information management company in Southfield, MI. He is the author of the just-released book, New Century Healthcare: Strategies for Providers, Plans and Purchasers (Health Administration Press, 2000), and editor of the monthly newsletter, Russ Coile's Health Trends. Ann Keillor, PhD, is divisional vice president for the management consulting division of Superior Consultant. For information, contact 800-835-0887. E-mail: [email protected]. Ann_ [email protected]]
References
1. Ornstein C. Up to 98,000 Americans die annually from medical errors. Dallas Morning News, Nov. 30, 1999:1A, 15A.
2. Coile RC Jr., Bauer J, Trusko B. Healthcare 2010's 'long boom' trends. Health Trends 2000; 12:1-12.
3. Schwartz P, Leyden P, Hyatt J. The Long Boom: A Vision for the Coming Age of Prosperity. Reading, MA: Perseus Books; 2000.
4. Coile RC Jr. New Century Healthcare: Strategies for Providers, Purchasers and Plans. Chicago: Health Administration Press; 2000, Chapters 1, 2, 12.
5. Lewin Group. Supply and demand for physiatrists: Review and update of the 1995 physical medicine and rehabilitation workforce study. Arch Phys Med Rehab 1999; 80:1,110-1,116.
6. Hawryluk M. Caps leave providers with difficult choice. Provider 1999; May:79-80.
7. Hefter T. HCFA revises proposals on transfers from hospitals-within-hospitals, satellite arrangements. National Report on Subacute Care 1999; 7:1, 6-7.
8. Pound ET. Program Billed Medicare Improperly. USA Today, March 21, 2000; 1A.
9. Rothstein JM. The future we want; the future we get. Phys Ther 1999; 79:544-545.
10. Threlkeld J, Jensen GM, Royeen CB. The clinical doctorate: A framework for analysis in physical therapist education. Phys Ther 1999; 79:567-581.
11. Groat B, Rudman WJ. The Balanced Budget Act of 1997: Bring HIM and the rehabilitation therapies closer together. Top Health Info Man 1999; 19:32-39.
12. Coile RC Jr., Blonski E, Trusko B. HIPAA: The next Y2K: Coping with the Health Insurance Portability and Accountability Act of 1996. Health Trends 2000; 12:1-12.
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