Are you preparing for APGs? You’d better be!
Same-day surgery managers need to educate themselves about a new reimbursement system to be proposed by the Health Care Financing Administration (HCFA) in Baltimore. HCFA is expected to propose a prospective payment system based on ambulatory patient groups (APGs) for hospital same-day surgery services, and a similar system by January 1998 for surgery centers.
"Most likely, the single biggest mistake same-day surgery programs make is that they wait too long before educating themselves about the methodology," says J. Scott Earich, principal of Orion Consulting in Cleveland. "Subsequently, programs do not allow for sufficient time to adjust their operations."
Follow these 3 tips
Consider this advice from providers and consultants who have worked with APGs:
• Read up on APGs and talk to your peers and payers.
"It appears that APGs, or some form of them, will be mandated by HCFA," Earich says. "APGs are also being adopted by many payers throughout the country. Therefore, educate yourself and have your staff prepare themselves properly. Encourage your staff to speak with their peers at locations that have gone through the process."
Reimbursement publications also can help, managers advise. (For information on ordering a reimbursement publication from American Health Consultants, publisher of Same-Day Surgery, see source box, p. 85.)
A fundamental understanding of APGs is critical, same-day surgery managers warn.
"We’re trying to see if APGs make sense from a cost perspective," says Julie McMahon, BSN, MSA, administrator at El Camino Surgery Center. "We’re trying to understand how they’re grouped: the method, site, extent how large a lesion is, complexity time to perform procedure, etc. What may be missing are actual supplies and use of equipment."
Many payers and consultants offer educational programs on APGs take advantage of them, Earich advises. When Riverside Hospital in Toledo, OH, saw one payer switch to APGs, it scheduled several meetings with the payer to learn how it was going to administer the reimbursement, says Beth Hickman, director of reimbursement.
Such meetings are critical, Earich says. "Fully understand the reimbursement methodologies of the payer," he says. "This can have significant impact on how to properly submit claims."
For example, the window of service often needs significant discussion, he suggests. The window is the amount of time before or after the primary visit for which related services must be included on the claim or considered part of the same visit. The window of service can be from 24 hours to an unspecified amount of time. When payers use an unspecified amount of time, they may rely on language such as "related" to link procedures, he points out.
• Make sure your coding is accurate.
Earich says, "The most important process for same-day surgery programs to do is to ensure that all services are accounted for and coded properly."
If not on claim, it didn’t happen
The initial implementation of APGs will offer various methods of consolidating significant procedures or packaging ancillary procedures. "Therefore, it is important to ensure that all services are included on the claim," Earich says.
Accurate coding is particularly important for ancillary procedures, he says. "For example, for laboratory procedures, the complexity of the test being performed is very important. Be sure you have coded to the proper level" to ensure maximum reimbursement, he says.
• Determine your costs and work with your physicians.
Not every surgery center has the cost data it needs to analyze APGs, warns Nancy Kessler, RN, MS, executive director at El Camino.
In preparation for the release of the APG proposal, El Camino is collecting cost data in several categories, including by top 20 cases, payer, and operating room times. The center also does physician profiling.
"We try to bring physicians into the process in terms of the cost of their supplies, length of time keeping patients in PACU, and the length of OR time," Kessler says.
Leaders sit down with groups of physicians and let them know anonymously how they compare to their peers. "We want them to look at where they are in comparison to their peers and make decisions not whether they have the lowest cost supply, but when there is one solution or another that’s more expensive, what is their feel on whether the lower cost one will affect patient care?"
When one of Riverside Hospital’s payers moved to APGs, the hospital performed a cost analysis of its highest outpatient procedures, including podiatry, obstetrics and gynecology, and orthopedics, says Pam Kadlick, director of surgery. "We met with individual specialty groups physicians or surgeons and talked about bringing costs down," she says. For example, the hospital and physicians looked at where the surgery department could switch from disposable to reusable supplies.
To know what your costs should be, obtain a "gold standard" benchmark of what supplies are costing nationally, suggests Kadlick, who acknowledges that such information is difficult to obtain. She networks with other managers she’s met at seminars and finds out their costs in the areas in which they specialize or have heavy volumes.
Riverside’s situation is ideal in that it has been given the opportunity to adjust to APGs before they are adopted by Medicare, Earich says.
"If it appears that a large payer will adopt this methodology before Medicare, then take full advantage of it," he says. "It is better to gain this experience with someone with whom you can negotiate than having your destiny published in the Federal Register."
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content