Reduced revenue is going to happen’ with PPS
Are your cost-control measures in place?
With the implementation of the prospective payment system (PPS) for outpatient services looming in a few months, it’s time for providers to ensure their cost-control measures are in place, advise experts.
Providers must prepare soon because reduced revenue is a definite," says Laura Frazier, RHIT, manager of APC solutions for QuadraMed Corp. in San Rafael, CA. "It’s going to happen, although there will be a higher loss for some more than others, based on their geographic area."
The question for facilities then becomes, "What do they do with the piece of pie they are given from Medicare to make their services, operations, and processes efficient enough to offer them on an ongoing basis?" she says.
Frazier says this operations-evaluation process is similar to what providers went through during the switch to using diagnostic-related groups (DRGs) for inpatient services. "While they were going through that [five-year] implementation window, facilities came up with strategies for managing the revenue differently. In the same vein, they will need to start providing that focus for outpatient services. They have the capability. They have the staff, and they have the expertise, but they’ve not had the reason to have to yet," she says.
Many hospitals have used the delays of the PPS implementation date as a reason to put preparation on the back burner. Frazier calls this "systemic denial disease." Other facilities are complaining that the Health Care Financing Administration (HCFA) is not giving the amount of time to phase in the system as it did for inpatient cost controls.
"Actually, HCFA is," she says. "HCFA has graciously extended the time frame many times, and while providers have said it’s never going to happen, they have also wasted the time that they could have spent implementing operational efficiencies and fixing the process steps to get ready proactively. If facilities wait for it to really happen,’ then it will be too late."
QuadraMed offers these tips to providers who are interested in preparing for the ambulatory payment classifications (APCs) used for reimbursement in the PPS:
- Add PPS compliance to your strategic plan.
- Begin educating hospital and medical staff on the requirements of APCs.
- Conduct an organizationwide assessment of your current outpatient coding practices to identify problems and develop an action plan to address them.
- Ensure that your current or future vendors/contracts are obligated to comply with the legislation.
- Purchase new or modify current information technology systems that satisfy APC requirements.
- Monitor Web sites with up-to-date APC information.
- Coordinate a multidisciplinary approach to communicate how you are going to get ready.
Creating a task force is crucial step
The creation of a multidisciplinary team or task force is one of the most important steps, Frazier says. "The issue is that we tend to operate as isolated departments. Whatever we do in our own department is fine. Any problems that are caused in the facility are someone else’s problem, not ours because we do a good job."
All departments that use or rely on outpatient service delivery should be brought together to discuss current processes and how they can be made more efficient, she says. If the appropriate departments are not included, reimbursement could suffer if they have unvoiced expectations of each other.
The cancer treatment center, for example, could be relying on patient registration to check on eligibility for certain drugs. Patient registration, however, might think another department was checking on the drugs. Only during the discussion involving both departments would the misunderstanding be discovered.
"We make quantum-leap assumptions and isolate ourselves in little cocoons within a facility instead of actually getting to the table to discuss the problems," Frazier says.
At a minimum, the group needs to include the following employees or departments, she says:
- Patient accounts or billing.
- Chief financial officer.
"He needs to understand why his fiscal budget that is projected for two years is already wrong [because of PPS implementation] and the operating budget needs to be changed accordingly," Frazier says.
- Utilization review.
"They are going to have a whole new workload [as they become] the APC coordinators, and they are going to have to make sure the operational efficiency machine continues to work," she says.
- Health information management/medical records coding.
- Other departments that need coding services, whether it is Charge Master entry coding or an outpatient service coding.
- A physician.
Facilities need a champion who can go back and explain the need for change to the physicians at medical staff meetings, Frazier says. "You can’t make any assumptions about who not to include in the group. It hits about every department."
These department representatives are the best "experts" the facilities can use in the evaluation process. "They can identify your current processes and exactly what they expect from other departments," she says. "Communicating at the same table with all parties hearing what is said helps everyone unveil the reality."
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