the upside-down world of volume-based vs value-based...
TRANSCRIPT
The Upside-Down World of
Volume-based vs Value-based
Reimbursement
Rob Borchert - MBA, FHFMA, CRCE-I
President, Best Practice Associates, LLC
Sunshine Chapter Spring Conference
Hammock Beach Resort
March 8 thru 10, 2017
AGENDA
• Are things changing? – contracts; documentation; communication?
• How do you measure, plan and execute VALUE?
• Can we measure Value through documentation?
• APR-DRGs; EAPGs; EGMs ----- what are they and how do they work?
• Impact examples – from past experience and future expectations
• What strategies and modelling will you do to effectively manage?
• Physician’s impact? Hospital impact?
• What is next??????????
Primary Care Physicians
Do More and Get More $$
• More discovery of diagnoses for
more office procedures
• More hospital admits
• More hospital visits
• More office visits
Do Less and Get More $$
• Capitation Plans
• Less referrals to specialties
• Use hospitalists for more office visits
• Manage time with ‘Episodic Care’
• Less labs just for ‘searching’
Hospitals
Past and Present • Occupancy is/was key
• Clinical Management of “days”
• Work with Physician for discharge
• Some Specialization Units
• “Search” for highest DRG
• Outpatient on the rise to lower costs
Future • Patient database is vital for success
• Coordination of care begins at Physician Office
• Diagnostic history will determine Level of reimbursement
• Specialization Units will become priority
• Clinical Management of “days” will determine profitability
ARE THINGS CHANGING??
Documentation?
Communications?
Contracts?
Hospital Systems with Rural Affiliates
Documentation
Past and Present
• SOAP Notes
• E&M Levels of New and
Established Patients
• Referrals and Consultations
• Medical Management
Future
• Primary Diagnosis with full definition of acute and/or chronic
• Secondary Diagnoses with full impact of treatment and effect
• Resource intensity for primary and secondary diagnoses
• Specificity as to severity and mortality
• Projected timeline for total treatment and care
CLINICAL
DOCUMENTATION
REQUIREMENTS
ICD – 10 CM/PCS
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Hit by a ball - ICD-9-CM code: E917.0
ICD-10-CM possible code
• W21.00 – Struck by hit or thrown ball, unspecified type
• W21.01 – Struck by football
• W21.02 – Struck by soccer ball
• W21.03 – Struck by baseball
• W21.04 – Struck by golf ball
• W21.05 – Struck by basketball
• W21.06 – Struck by volleyball
• W21.07 – Struck by softball
• W21.09 – Struck by other hit or thrown ball
Sports Medicine
FOCUS Points For
clinical documentation
Under ICD-10, there are critical factors required for appropriate and compliant
documentation:
• Disease Acuity
• Disease Type
• Site Specificity
• Specialty
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Disease Acuity
• Will provide more accurate representation of the severity and urgency of the
patient’s condition
• NOW - Congestive Heart Failure
• NEW – Chronic Diastolic Congestive Heart Failure
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Disease Type
• Acute Renal Failure –
• Is it with tubular necrosis, acute cortical necrosis or medullary necrosis
• CAD – Is it without angina, with unstable angina, with spasm, with other
forms of angina pectoris
• Hypertension, COPD, Hyperlipedemia will require MORE, MORE, MORE
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Disease Stage
• Shows a relationship between the severity of a patient’s condition and costs
for the patient’s encounter
• Non-pressure skin ulcers need the level of tissue breakdown
• There are stages to Chronic Kidney Disease (I-IV or ESRD);
• Malnutrition – mild, moderate or severe
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Site specificity
• Site specificity has been added to thousands of codes
• UTI needs site (urethritis, cystitis, pyelonephritis)
• Osteoarthritis – by joint(s) and if primary, secondary, or post
traumatic
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MCC/CC Category Conversion Conversion Summary MCC CC Total
ICD-9-CM Codes on List 1,592 3,427 5,019
ICD-10 CM codes Auto-translated 3,152 13,594 16,845
DRG Description # ICD-9 codes # ICD-10 codes
291-293 Heart Failure & Shock 27 20
231-236 Coronary Bypass 9 232
250-251 Percutaneous Cardiovascular
Procedure without Stent
8 136
258-259 Cardiac Pacemaker Device
Replacement
6 14
533-534 Fracture of Femur 14 273
HYPERTENSION
• Hypertension with heart disease
• Hypertensive chronic kidney disease
• Hypertensive heart AND chronic
kidney disease
• Hypertensive cerebrovascular disease
• Hypertensive retinopathy
• Hypertension, secondary
• Hypertension, transient
• Hypertension, controlled
• Hypertension, uncontrolled
• ALL with subsections
• Also different section for Chronic
kidney disease
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Examples of respiratory system codes
• Mild intermittent asthma
• Mild persistent asthma
• Moderate persistent
• Severe persistent
• Exercise induced bronchospasm
• Cough variant asthma
NOTE: All codes in the subcategory of acute respiratory failure are designated as MCCs, representing the highest severity level
• Acute respiratory failure
• Chronic respiratory failure
• Acute and chronic respiratory failure
• Respiratory failure, unspecified
• Acute respiratory distress syndrome
• Post procedural respiratory failure
• Respiratory arrest
NOTE: All codes in respiratory failure category are either CCs or MCCs depending on documentation
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Chronic obstructive
pulmonary disease codes
• Asthma with COPD
• Chronic obstructive lung disease
• Chronic obstructive airway disease
• Chronic airflow limitation
• Chronic obstructive respiratory disease
• Chronic asthmatic (obstructive) bronchitis
• Chronic bronchitis with emphysema
• Chronic emphysematous bronchitis
• Chronic obstructive bronchitis
• Chronic obstructive tracheobronchitis
NOTE: codes for COPD with acute lower respiratory infection and with acute exacerbation are designated as CC. There is no CC or MCC designation for the unspecified code for the disease process
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Key Terms
APR-DRGs; EAPGs; EGMs
What are they and how do they work?
Future of Reimbursement Methodology
ICD – 10 Documentation Requirements
• Increased level of patient clinical condition
• Acuity
• Stages
• Disease Type
• Specific site
• POA and current Severity
• Secondary Diagnosis impact
APR-DRG Assignment Requirements
• MS-DRGs have been re-allocated to APR-DRGs for distinct grouping
• Each APR-DRG has four sub-classes to it
• Minor
• Moderate
• Major
• Extreme
• Different weights for each sub-class
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ACA ICD-10
APR-DRG States* Massachusetts North Dakota Rhode Island Texas New York Alabama Nebraska Montana Illinois Pennsylvania Kentucky Colorado Maryland South Carolina California Florida
*Primarily Medicaid Processing; However, Third Parties (CIGNA/HUMANA) are
moving to this
Clinical documentation
for APR-DRGs
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Documentation for the APR-DRGs
ACA ICD-10
APR-DRGs
expand upon DRGs by also assigning to each case a severity of illness (SOI) subclass and risk of
mortality (ROM) subclass
SOI Severity of Illness (the extent of
physiologic decomposition or organ system loss of function)
ROM Risk of Mortality (the likelihood of dying)
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Documentation Required for APR-DRGs The following discharge data elements are used for APR-DRG subclass assignment:
ACA ICD-10
Principle DX coded in ICD-10 CM
Principle Procedure coded in ICD-10 PCS
Secondary DX coded in ICD-10 CM
Secondary Procedures coded in ICD-10 PCS
Age
Sex
Birth weight (value code)
Documentation for the APR-DRGs
• Documenting the presence of multiple co-morbid conditions in combination
increases the severity of illness for a patient (POA)
• The increase in severity accurately reflects the increased difficulty and costs
involved in treating the patient (Current and POA)
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Present on Admission (POA)
Definition
OP Encounter
Indicator
POA is defined as present at the time the order for inpatient admission occurs
Conditions that develop during an OP encounter (including ED, Observation or OP surgery) are considered as POA
The POA indicator is assigned to principle and secondary diagnoses and external cause of injury codes (ICD-10-codes)
Communications
Past and Present
• Physician’s Office
• Admissions/Registration
• Services (IP or OP)
• UR, UM, Case Management
• Discharge Planning
• Little contact with Patient
Future
• Physician’s Office/Patient
• Admissions/Registration with Clinical Team
• Clinical Team Coordinator for Services
• Discharge Planning/Business Office
• Case Management Post Discharge
• Patient involved from the beginning
Communications
• Clinical Teams will become the drivers of overall patient outcomes
• Collaboration between Primary Care, Specialty, and Ancillary Physicians will
determine value-based environment
• Revenue Cycle Specialists will become a critical part of the Clinical Teams
• Continual analysis of Clinical care from onset to final “release” will involve
reduction of cost factors
• Distribution of reimbursement per case will be a recognition of contribution
Contracts
Past and Present
• Individual Physician and Hospital Contracts
• Outpatient Fee Schedules for Ancillary Services and Physician Services
• Outpatient Surgery Fee Schedule
• Inpatient MS-DRG basis
• Specialty Unit per diems
Future
• Group Physician/Hospital Contracts
• More bundled payment contracts
• Value-based Medicine/Surgery Contracts
• Episode of Care Contracts
• APR-DRGs, EAPGs, EGMs modeling
contracts
Historical Contracts
• Historically, we negotiated contracts in a “vacuum” not knowing what others received in reimbursement.
• Historically, we listened and believed what the third party insurance company told us about our services, our reimbursement history and our “problems”.
• Historically, we are happy getting any kind of increase in rates whether they be IP, OP, AmSurg, Physician, etc. Not recognizing any increase in our costs
• Historically, Revenue Cycle Professionals are left out of any contract negotiations.
Future Contracts
• Specialty Unit Per Diems may turn into time and progress documentation
• Outpatient Services may retain some “qualifying” value but overall they will
be diagnostically connected (and even added into the Episode)
• Bundled care payments will be on the rise where practical
• Documentation and coding will be the ultimate determination of payment
• Third Party Insurers will be combining and “making up” their own levels and
episodes of care
Future Contracts
• This time “We” have the data!!
• Teams must be formed to identify Contractual Opportunities
• Physicians, Hospitals, and Post-Acute Providers must meet and discuss
specifics regarding the continuity of care
• Costing of services (level and time and equipment) becomes a prime factor
in any negotiations
• Agreement of distribution will be required arrangement among Professionals
How do you measure, plan and
execute
VALUE!
Measuring Value
• Value = Reimbursement/Cost
• Value = Revenue/Cost
• Value = Charge/Patient’s Reaction
• Value = Time/Cost X Patient’s Outcome
• Value = Patient’s Outcome after 6 months
• Value = Coordination of Care to minimize intrusion and maximize outcome
Planning and Executing
Value
• Value is extremely hard to define and, in fact, is usually a ‘personal’ definition
• Value in healthcare must be a ‘public’ definition
• Planning and Executing will involve a Total Team effort
• The Total Team will comprise Clinicians, Consumers, Finance, and others
• Value will be on all websites, flyers, ads, and internally adopted
• Value is to be a “sell” to third party insurance and their members
MS-DRG Code MS-DRG Description
Number of
Discharges
885 PSYCHOSES 191,194
871 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W MCC 109,088
470 MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 93,430
392 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 61,757
872 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W/O MCC 48,626
945 REHABILITATION W CC/MCC 39,616
313 CHEST PAIN 35,653
690 KIDNEY & URINARY TRACT INFECTIONS W/O MCC 34,717
292 HEART FAILURE & SHOCK W CC 32,435
291 HEART FAILURE & SHOCK W MCC 32,304
897 ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W/O MCC 31,150
194 SIMPLE PNEUMONIA & PLEURISY W CC 28,642
641 MISC DISORDERS OF NUTRITION,METABOLISM,FLUIDS/ELECTROLYTES W/O MCC 27,691
743 UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W/O CC/MCC 25,631
378 G.I. HEMORRHAGE W CC 24,578
683 RENAL FAILURE W CC 24,280
Top MS-DRGs 2015 without Obstetrics
Top Secondary Diagnoses
Hypertension ICD -9 401 to 405
I10 - "with" O10-O14
series; "due to" I115
series
Hyperlipidemia ICD-9 272.1;.2;.3;.4 and V77.9
E78.2 or E78.4 or
E78.5
Fluid and electrolyte disorders ICD-9 276.0 thru .9 E87 series
Coronary atherosclerosis ICD-9 414.00 - .07 and 414.3 and .4
I25 series with I25.7
or I25.8 or I25.10
Diabetes mellitus without complications ICD9 - 249 series (secondary) and 250
series (primary)
E11.9 - "with" full E
series E08 thru E13
Anemia ICD-9 280 thru 285 series
D61.? Or D64.? Or
O53.? Or O55.?
Cardiac dysrhythmias ICD-9 427 series I48 and I49 series
Esophageal disorders ICD-9 530 series K series - K22.?
Mood disorders ICD-9 296 series F39 or F30 - F 34.9
Top MS-DRGs 2015 without Obstetrics
MS-DRG
Code MS-DRG Description Weight APR-DRG
Code Level 1 Level 2 Level 3 Level 4
885 PSYCHOSES 0.8899 752 1.5243 1.5243 1.5243 1.5243
871 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W MCC 1.8437 720 0.5973 0.8646 1.4945 3.1756
470 MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 2.0613 302 1.8668 2.0813 2.7026 5.9584
392 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 0.6921 242 0.5070 0.7406 1.2807 2.9594
872 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W/O MCC 1.1155 720 0.5973 0.8646 1.4945 3.1756
945 REHABILITATION W CC/MCC 1.2388 860 1.1950 1.2330 2.1789 2.3694
313 CHEST PAIN 0.5404 203 0.3586 0.4510 0.6973 1.9656
690 KIDNEY & URINARY TRACT INFECTIONS W/O MCC 0.7708 443 1.0668 1.1716 2.3244 5.9917
292 HEART FAILURE & SHOCK W CC 0.974 194 0.5504 0.7642 1.2975 2.9085
291 HEART FAILURE & SHOCK W MCC 1.4609 194 0.5504 0.7642 1.2975 2.9085
897 ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W/O MCC 0.6288 775 0.5229 0.6475 1.2167 3.1106
194 SIMPLE PNEUMONIA & PLEURISY W CC 0.9976 138 0.4584 0.6098 1.2309 2.4828
641 MISC DISORDERS OF NUTRITION,METABOLISM,FLUIDS/ELECTROLYTES W/O MCC 0.6843 759 0.8207 0.8207 0.8207 0.8207
743 UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W/O CC/MCC 0.8787 443 1.0668 1.1716 2.3244 5.9917
378 G.I. HEMORRHAGE W CC 0.9873 248 0.5786 0.8566 1.3521 2.9084
683 RENAL FAILURE W CC 1.0523 460 0.6389 0.7393 1.0329 3.0028
Top MS-DRGs 2015 without Obstetrics TODAY
MS-DRG Code MS-DRG Description Weight If $10,000 Base Rate
885 PSYCHOSES 0.8899 $ 8,899
871 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W MCC 1.8437 $ 18,437
470 MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 2.0613 $ 20,613
392 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 0.6921 $ 6,921
872 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W/O MCC 1.1155 $ 11,155
945 REHABILITATION W CC/MCC 1.2388 $ 12,388
313 CHEST PAIN 0.5404 $ 5,404
690 KIDNEY & URINARY TRACT INFECTIONS W/O MCC 0.7708 $ 7,708
292 HEART FAILURE & SHOCK W CC 0.974 $ 9,740
291 HEART FAILURE & SHOCK W MCC 1.4609 $ 14,609
897 ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W/O MCC 0.6288 $ 6,288
194 SIMPLE PNEUMONIA & PLEURISY W CC 0.9976 $ 9,976
641 MISC DISORDERS OF NUTRITION,METABOLISM,FLUIDS/ELECTROLYTES W/O MCC 0.6843 $ 6,843
743 UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W/O CC/MCC 0.8787 $ 8,787
378 G.I. HEMORRHAGE W CC 0.9873 $ 9,873
683 RENAL FAILURE W CC 1.0523 $ 10,523
MS-DRG
Code
APR-DRG
Code Description Level 1 Level 2 Level 3 Level 4 885 752 Disorders of Personality & Impulse Control 1.5243 1.5243 1.5243 1.5243
$ 15,243 $ 15,243 $ 15,243 $ 15,243
871 720 Septicemia & Disseminated Infections 0.5973 0.8646 1.4945 3.1756
$ 5,973 $ 8,646 $ 14,945 $ 31,756
470 302 Knee Joint Replacement 1.8668 2.0813 2.7026 5.9584
$ 18,668 $ 20,813 $ 27,026 $ 59,584
392 242 Major Esophageal Disorders 0.5070 0.7406 1.2807 2.9594
$ 5,070 $ 7,406 $ 12,807 $ 29,594
872 720 Septicemia & Disseminated Infections 0.5973 0.8646 1.4945 3.1756
$ 5,973 $ 8,646 $ 14,945 $ 31,756
945 860 Rehabilitation 1.1950 1.2330 2.1789 2.3694
$ 11,950 $ 12,330 $ 21,789 $ 23,694
313 203 Chest Pain 0.3586 0.4510 0.6973 1.9656
$ 3,586 $ 4,510 $ 6,973 $ 19,656
690 443 Kidney & Urinary Tract Procedures for Nonmalignancy 1.0668 1.1716 2.3244 5.9917
$ 10,668 $ 11,716 $ 23,244 $ 59,917
292 194 Heart Failure 0.5504 0.7642 1.2975 2.9085
291 194 Heart Failure 0.5504 0.7642 1.2975 2.9085
$ 5,504 $ 7,642 $ 12,975 $ 29,085
TOMORROW
MS-DRG
APR-DRG Description Level 1 Level 2 Level 3 Level 4
897 775 Alcohol Abuse & Dependence 0.5229 0.6475 1.2167 3.1106
$ 5,229 $ 6,475 $ 12,167 $ 31,106
194 138 Bronchiolitis & RSV Pneumonia 0.4584 0.6098 1.2309 2.4828
$ 4,584 $ 6,098 $ 12,309 $ 24,828
641 759 Eating Disorders 0.8207 0.8207 0.8207 0.8207
$ 8,207 $ 8,207 $ 8,207 $ 8,207
743 443 Kidney & Urinary Tract Procedures for
Nonmalignancy 1.0668 1.1716 2.3244 5.9917
$ 10,668 $ 11,716 $ 23,244 $ 59,917
378 248 Major Gastrointestinal & Peritoneal Infections 0.5786 0.8566 1.3521 2.9084
$ 5,786 $ 8,566 $ 13,521 $ 29,084
683 460 Renal Failure 0.6389 0.7393 1.0329 3.0028
$ 6,389 $ 7,393 $ 10,329 $ 30,028
TOMORROW
EAPGs and their Impact
• Enhanced Ambulatory Patient Groups (EAPGs) is a visit-based patient classification system used to organize and pay services with similar resource consumption across
• Enhanced Ambulatory Patient Groups are the advanced payment reimbursement structure based on multiple settings
• EAPGs have the potential to bring about beneficial changes to management, communication, cost accounting and planning within hospitals and hospital systems.
EAPGs and their Key Characteristics
• Visit based payment decisions.
• Ambulatory visits reflect similar resource use.
• Patients in each APG have similar clinical characteristics
• Encompass full range of ambulatory care settings including same day surgery units,
hospital emergency departments, outpatient clinics (excluding phone contacts, home
visits, nursing home services, and inpatient services)
.• Use administrative data readily available on claim forms in the classification logic
• Developed to represent ambulatory patient across entire patient population, not just
Medicare.
EAPGs are a similar concept to DRG-based inpatient payments
APR-DRGs
• Each Line assigned an
– Describes an inpatient admission as unit of service
– Uses discharge date to define code sets
– Based only on standard
code sets (ICD-10-CM)
• Differences:
Each admission assigned
only 1 DRG
EAPGs
• Defines ambulatory visit as a unit of service
• Uses the date to define the code sets
• Based on standard code sets ICD-10-CM/PCS
Differences:
• Multiple EAPGs may be assigned per visit
• Each line assigned an EAPG
Episode Grouper for Medicare (EGMs)
• CMS draft publication September 17, 2015
• EGM is a software application that is set up to read Medicare administrative
claims data chronologically by beneficiary and assign services and Medicare
payments to episodes of care
• Episodes correspond to clinically meaningful topics such as a clinical
condition defined by a diagnosis code (e.g. pneumonia) or in other cases, a
particular type of treatment defined by procedure codes (e.g. pacemaker
insertion)
Strategies and Modeling
For Effective Management
Strategies for Preparation
• Identify one or two clinical services involving Pre and Post Services
• Use top diagnostic data from HIM choosing one medical and one surgical episode
• Identify the physician specialties, ancillary services, and post discharge status
• Contact Specialty ‘leader’, prime ancillary ‘leader’, discharge planning and post discharge facility to obtain coordination in project discussion
• Discuss with CFO and COO and Medical Director with initial data
• Set up initial meeting with Project Team to discuss initial data and different approaches in developing value-based reimbursement through cost reduction and appropriate distribution (include Managed Care Director)
Strategies for Preparation
• Create an internal NDA (Non-Disclosure Agreement) for integrity/trust
• Have each member gather the data from the one assigned case (prepare a standard data collection document for consistency)
• Have each member determine the actual (or approximate) cost for all of the services and staff involved
• Have each member (where appropriate) present the actual charge(s) and reimbursement for the case study
• Coordinate and discuss information at a meeting to assure integrity/trust
Modelling for Preparation
• In order to actually do value-based modelling, a number of different scenarios should be developed in at least two ways
• By specialty/diagnosis with lead being driven by the physician
• By diagnosis with lead being driven by hospital activities
• Variations of these models should be designed with distinctions of time and cost
• Models are driven by revenue (charge), cost and time to designate the episode of care and what is encompassed.
Modelling for Preparation
• The experience from the Managed Care Director should assist in selecting
the most appropriate value-based package for a specialized primary diagnosis
• Under the new methodologies of APR-DRGs, EAPGs, and EGMs, multiple
diagnoses are required and therefore should also be included in the
development of a value-based package.
• The involvement of the long term care provider is critical in the calculation
of time for an episode of care.
Physicians’ Impact
• Learn all of the elements involved with the value-based clinical processes
• Recognize the value to be brought by excellent patient management throughout
the episode in order to reduce the days within the episode
• Review clinical processes for specific patterns of over-reach or cost reduction
• Enhance Practice Management through improved components of treatment
• Doing Less with More Value enhances patient’s care and treatment while
maintaining physician compensation
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Hospital Impact
• Monitoring all areas of treatment as cost centers to assist in the increasing of
‘value’ to the outcome of the patient
• Monitoring all of the post discharge services (home health, rehab, skilled) to
maintain/reduce/increase their involvement regarding “value” to the outcome
• Be the key negotiator with the third party insurance companies in determining
both the reimbursement for “value-based services” and the “risk-adjusted”
bonus for a positive patient outcome
• Revenue Cycle Directors/Managers will be key to continued analysis
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Immediate Internal Projects
• Validate cost accounting systems/methodology
• Open discussion with CFO, CMO to consider project
• Draft team membership with Managed Care Manager
• Hold first meeting to discuss current contract
methodologies and future plans
• Set up both strategic and tactical plans to be successful
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Any Questions?????
Rob Borchert – [email protected]; (315) 345 5208