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PubMed2003

Financial success under PPS: how to beat the odds, Part II.

Whether you are a publicly held company or a small mom and pop agency, you have to maximize both efficiency and productivity while maintaining patient satisfaction and staff morale. In the new world of home care, this is a tall order. In the first installment of this two part series, which ran in the July 2002 issue of CARING the author reviewed the dimensions of financial success, issues of length of stay and episode of care, resource utilization planning, and reducing overhead. This second part covers overall productivity, clinical productivity, and management strategies to synergize financial success under the prospective payment system.

Efficiency, Organizational↗

PubMedDate not supplied

The American health-care system: in sickness or in health?

With budget deficits dominating Federal policies, Congress has decided that Medicare costs have surpassed acceptable limits. To help solve the problem, Congress approved the Prospective Payment System in 1983. Bisbee explores Medicare's role in present and future developments in health-care delivery and examines hospitals' and physicians' response to the latest governmental initiatives.

Cost Control↗

PubMed1988

DRG calculation and utilization patterns: a review of method and policy.

This paper examines methodological and policy issues of interest to medical geographers who use diagnosis-related groups (DRGs) in their research. Methodological issues are studied in terms of the calculation of DRGs and variation in the utilization of surgical and medical DRGs. It is argued that a shift to a single DRG price system should first address the (i) regional disparities that currently exist and the need for large-scale indices of medical wages and labor costs; (ii) severity of illness measurements other than the present nominal ones; and (iii) wide variation among medical versus surgical procedures. The Department of Commerce's Economic Analysis Area is recommended to remedy the problem of geographic scale. Policy issues of interest to medical geographers center around the shift to greater hospital specialization which is likely to continue across the country. Inner-city, rural and teaching hospitals may continue to be inadequately reimbursed by DRGs, treat more medically indigent, or both. Medical geographers should be aware of the policy and methodological issues involved not only in DRGs, but in proposed prospective payment systems for ambulatory and long-term care.

Aged↗

PubMed1989

A new perspective on nursing and caring in a corporate context.

An understanding of how the corporatization of the health care system has influenced the social context of health workers is essential as nurses attempt to implement an ethic of caring. Since the 1960s, the US health care system has been moving toward increased competition between providers and toward care-avoidance incentives. These incentives created by the Medicare Prospective Payment Systems based on diagnosis related groups, health maintenance organizations, and preferred provider organizations reward the minimization of service. In this context, nurses are not rewarded for trying to care. However, nurses can employ various strategies in nursing education, health care policy formation, and social activism to insist that caring is a nonnegotiable component of nursing work.

Delivery of Health Care↗

PubMedDate not supplied

Hospital payment system based on diagnosis related groups in Italy: early effects on elderly patients with heart failure.

Prospective payment systems (PPS) based on diagnosis related groups (DRG) has recently been introduced in Italy and has already changed certain practice patterns of medical staff. Treatment of chronic diseases and those which specifically address the elderly population, such as chronic heart failure (CHF), can be strongly conditioned by this kind of system. This paper concerns an overview of CHF patients within the DRG system, supported by age-related variables, re-admission rates and cost analysis. We analyzed a sample of four hospitals in Central Italy and 1987 patients were admitted for CHF. The results show that after DRG introduction, length of stay was shorter, but re-admission rate increased, especially where the elderly were concerned. Average costs of service provision decreased, mainly due to the reduction in length of stay. However, no reduction was reported in the quality of care in terms of available diagnostic and the rapeutic resources. These early data indicate a change in the practice patterns of medical staff, including the risk of untimely discharge of elderly patients suffering from chronic diseases, for whom a long term monitoring system of service quality would be necessary.

Journal Article↗

PubMed2006

Impact of changes in Medicare Home Health care reimbursement on month-to-month Home Health utilization between 1996 and 2001 for a national sample of patients undergoing orthopedic procedures.

BACKGROUND: Beginning October 1, 1997, Medicare implemented a series of major changes to the Home Health (HH) reimbursement system. Reimbursements were first significantly reduced under the Interim Payment System (IPS) and then relaxed slightly until implementation of the HH Prospective Payment System (PPS) on October 1, 2000. OBJECTIVE: The objective of this study was to examine the impact of reimbursement policy on HH care utilization. RESEARCH DESIGN: We postulated that in response to the initial changes, there would be reductions in both the probability of any HH use and the number of HH visits per HH user. Under PPS, we postulated there would be further reduction in number of HH visits. We tested whether the policy response differed by HH agency structure and whether subgroups of patients were differentially affected. An interrupted time-series analysis was conducted to examine month-to-month probability of HH selection and the number of HH visits among users. SUBJECTS: A 100% sample of all Medicare recipients undergoing either elective joint replacement (1.6 million hospital discharges) or surgical management of hip fracture (1.2 million hospital discharges) between January 1996 and December 2001 was selected. RESULTS: Under the IPS, the probability of any HH use and number of visits per episode of HH care fell until the IPS was refined in October 1998. With implementation of the PPS, HH visits fell commensurately. Differentially larger reductions in care were noted at for-profit HH agencies, for the elderly, women, patients receiving state assistance, and patients first discharged to skilled nursing facility or rehabilitation hospitals. CONCLUSIONS: Changes in month-to-month utilization of HH services were sharp and well correlated with policy implementation dates, strengthening the evidence for a causal association between policy and patient care in the midst of a sea of concurrent policy changes. Greater reductions in HH visits were noted for vulnerable groups.

Aged↗

PubMed1993

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS)--DoD. Notice of revised rates.

This notice provides the updated adjusted standardized amounts, DRG relative weights, outlier thresholds, and beneficiary cost-share per diem rates to be used for FY 1993 under the CHAMPUS DRG-based payment system. It also describes the non-regulatory changes made to the CHAMPUS DRG-based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS).

Diagnosis-Related Groups↗

PubMed1995

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); FY96 DRG updates--DoD. Notice of DRG revised rates.

This notice provides the updated adjusted standardized amounts, DRG relative weights, outlier thresholds, and beneficiary cost-share per diem rates to be used for FY 1996 under the CHAMPUS DRG-based payment system. It also describes the changes made to the CHAMPUS DRG-based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS).

Diagnosis-Related Groups↗

PubMed1996

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); FY97 DRG updates--DoD. Notice of DRG revised rates.

This notice provides the updated adjusted standardized amounts, DRG relative weights, outlier thresholds, and beneficiary cost-share per diem rates to be used for FY 1997 under the CHAMPUS DRG-based payment system. It also describes the changes made to the CHAMPUS DRG-based payment system in order to conform to changes made to the Medicare Prospective Payment System (PPS).

Diagnosis-Related Groups↗

PubMed2000

Final APC rule soothes critics--but experts warn there's hard work ahead.

While the Health Care Financing Administration's newly finalized outpatient prospective payment system may not cost hospitals as much as some originally had thought, several concerns remain. Chief among these for quality managers are the prospect of increased claims denials and restrictive guidelines regarding which procedures will be covered when performed in the outpatient setting.

Ambulatory Care↗

PubMed1990

Physician-management relationships at HCA: a case study.

The questions of whether Hospital Corporation of America (HCA), a for-profit hospital company, fostered an environment detrimental to the physician-patient relationship during the period of implementation of the Medicare Prospective Payment System (PPS) was explored. The transition to PPS provided an opportunity to evaluate whether hospital ownership differences affected responses to a payment system which encouraged institutional intervention in the practice of medicine. A case study approach was used to observe the influence of the then largest for-profit hospital corporation upon physicians' medical practice in four owned hospitals. Findings indicated that HCA hospital managers were most directly influenced by the local competitive environment and their own personal agendas in responding to PPS incentives. Corporate influence actually softened payment system incentives to intervene in medical practice by providing a generous supply of capital, and by fostering a corporate culture conducive to cooperative relationships with physicians. Better public understanding of the determinants of hospital behavior is needed to preserve or enhance important social goals such as the physician-patient relationship; easily measurable characteristics such as ownership or bed size explain little about hospital behavior or motivation.

Economic Competition↗

PubMed1989

Trends in hospital labor and total factor productivity, 1981-86.

The per-case payment rates of Medicare's prospective payment system are annually updated. As one element of the update factor, Congress required consideration of changes in hospital productivity. In this article, calculations of annual changes in labor and total factor productivity during 1981-86 of hospitals eligible for prospective payment are presented using several output and input variants. Generally, productivity has declined since 1980, although the rates of decline have slowed since prospective payment implementation. According to the series of analyses most relevant for policy, significant hospital productivity gains occurred during 1983-86. This may justify a lower update factor.

Costs and Cost Analysis↗

PubMed1997

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); TRICARE program; reimbursement--DoD. Proposed rule.

This rule proposes to revise certain requirements and procedures for reimbursement under the TRICARE program, the purpose of which is to implement a comprehensive managed health care delivery system composed of military medical treatment facilities and CHAMPUS. Issues addressed in this proposed rule include: implementation of changes made to the Medicare Prospective Payment System (PPS) upon which the CHAMPUS DRG-based payment system is modeled and required by law to follow wherever practicable, along with changes to make our DRG-based payment system operate better; extension of the balance billing limitations currently in place for individual and professional providers to non-institutional, non-professional providers; adjusting the CHAMPUS maximum allowable charge (CMAC) rate in the small number of cases where the CMAC rate is less than the Medicare rate; and implementing the government-wide debarment rule where any provider excluded or suspended from CHAMPUS shall be excluded from all other programs and activities involving Federal financial assistance, such as Medicare or Medicaid, and adding violations of our balance billing or claims filing requirements to the list of provider actions considered violations of the TRICARE/CHAMPUS program.

Government Agencies↗

PubMed1998

Civilian Health and Medical Program of the Uniformed Services (CHAMPUS); TRICARE Program; reimbursement--DoD. Final rule.

This final rule revises certain requirements and procedures for reimbursement under the CHAMPUS program, the purpose of which is to implement a comprehensive managed health care delivery system composed of military medical treatment facilities and CHAMPUS. Issues addressed in this rule include: implementation of changes made to the Medicare Prospective Payment System (PPS) upon which the CHAMPUS DRG-based payment system is modeled and required by law to follow wherever practicable, along with changes to make our DRG-based payment system operate better; clarification of payment reduction for noncompliance with required utilization of publication of list of ambulatory surgery procedures; limitation on ambulatory surgery group payment rates; extension of the balance billing limitations currently in place for individual and professional providers to non-institutional, non-professional providers; adjustment of the CHAMPUS maximum allowable charge (CMAC) rate in the small number of cases where the CMAC rate is less than the Medicare rate; implementation of the government-wide debarment rule where any provider excluded or suspended from CHAMPUS shall be excluded from all other programs and activities involving Federal financial assistance, such as Medicare or Medicaid; elimination of the requirement for non-participating providers to file claims; and revision of the ambulatory surgery cost-share information to enable the cost-share to be assessed against the facility claim instead of the primary surgeon's claim.

Centers for Medicare and Medicaid Services, U.S.↗

PubMed1985

The impact of Medicaid benefit design on length of hospital stay and patient transfers.

The authors examined how the Medicaid hospital benefit structure affects the length of stay of psychiatric inpatients and transfers to state mental hospitals and nursing homes. They hypothesized that length-of-stay and discharge patterns would depend on five classes of variables: patient characteristics, diagnosis, mental health status, hospital characteristics, and benefit structure. Analysis of 976 Medicaid cases showed that the variables together accounted for only 17 percent of the variation in patient length of stay; benefit structure alone accounted for 6 percent of the variation, slightly less than the diagnostic variables. A patient's clinical status was the most important predictor of transfer to state mental hospitals, although benefit structure had a significant effect. It had no effect on patient transfers to nursing homes. The authors discuss the implications of the findings for designing prospective payment systems for psychiatric patients under Medicare.

Hospitals, State↗

PubMed1991

Regulatory change impact upon hospital laboratory operations.

Dealing with the constantly changing regulatory landscape has become a routine aspect of the work of any hospital administrator or clinician in the past several years--and the laboratorian is no exception. Recently, however, two aspects of regulatory change have particular potential to require attention from the laboratory manager. They are the Resource-Based Relative Value Scale (RBRVS) Fee Schedule for Medicare Physician Payment and the Proposed Prospective Payment System for Inpatient Hospital Capital-Related Costs.

Capital Expenditures↗

PubMed1992

DRGs' effects worldwide.

The United States' Prospective Payment System has become a blueprint for healthcare cost-savings efforts worldwide. Not without its critics, PPS is now being modified and adopted in an effort to create a universal healthcare system in Europe.

Cost Control↗

PubMed1999

Nurses' basic guide to understanding the Medicare PPS.

Nurse leaders grappling with changing reimbursement need to know the background and structure of Medicare's Prospective Payment System. The author explains case mix and Resource Utilization Groups, as well as applications for practice.

Diagnosis-Related Groups↗