How data influence third party payers.
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Inadequate funding from payers will doom ESRD capitation.
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Capitation Fee↗
Third-party payers gain most from arbitrated labor dispute.
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Collective Bargaining↗
Health care financing policy for hospitalized pediatric patients.
Prospective hospital payment systems using the federal Medicare DRG payment model are changing hospital reimbursement. Currently, many states have adopted diagnosis related group (DRG) prospective "all payer systems" using the federal model. All payer systems, whereby Medicaid, Blue Cross, and other commercial insurers pay by the DRG mode, prevent cost shifting between payers. New York state has used an all payer system since Jan 1, 1988. This study simulated DRG all payer methods for a large sample (N = 16,084) of pediatric patients for a three-year period using the New York DRG all payer reimbursement system now in effect. Medicaid pediatric patients had (adjusted for DRG weight index) a longer hospital stay and greater total hospital cost compared with pediatric patients from Blue Cross and other commercial payers. Medicaid pediatric patients also had a greater severity of illness compared with patients from Blue Cross and other payers. Pediatric patients in all payment groups (ie, Medicaid, Blue Cross, and other commercial insurers) generated financial risk under the DRG all payer scheme. Medicaid pediatric patients generated the greatest financial risk, however. These data suggest that state and private payers may be under-reimbursing for the care of the hospitalized pediatric patient using the DRG prospective hospital payment scheme. Health care financing policy for pediatric patients may limit both access and quality of care.
Adolescent↗
Health care financing policy for hospitalized nephrology patients.
The Medicare diagnosis-related group (DRG) prospective payment system is now entering its 6th year, with no reported major adverse effects on the health status of the American people. Currently 13 states are using DRG prospective "all-payer systems" for hospital reimbursement; other state may adopt DRG all payer systems. In DRG all-payer systems, Medicare, Medicaid, Blue Cross, and other commercial insurers pay by the DRG mode; New York state has been all-payer since January 1, 1988. This study simulated DRG all-payer methods on a large sample (n = 558) of adult nephrology patients for a 2-year period using both federal and New York DRG reimbursements now in effect. Both Medicare and Medicaid patients had (on average) longer hospital lengths of stay and higher total hospital costs compared with patients from Blue Cross and other commercial payers. Medicare and Medicaid patients also had greater severity of illness than patients from Blue Cross or other payers. However, all payers (ie, Medicaid, Blue Cross, Medicare, and commercial insurers) generated significant financial risk under our DRG all-payer scheme. These data suggest that federal, state, and private payers may be underreimbursing for the care of hospitalized nephrology patients using the DRG prospective hospital payment scheme. As DRG payment rates are further reduced compared with the real hospital costs of treating patients, both the access to and the quality of care for many nephrology patients may be jeopardized.
Aged↗
The relationship of insurance status, hospital ownership, and teaching status with interhospital transfers in California in 2000.
PURPOSE: Public hospitals and academic medical centers may admit more poorly insured transfer patients than do other institutions. The authors investigated the relationship of patient insurance status, hospital ownership, and hospital teaching status with interhospital transfers in California. METHOD: In 2003, data were derived from the hospital discharge abstract database for the year 2000 from the California Office of Statewide Health Planning and Development. Hospitals were categorized by ownership and teaching status; patients were categorized as being "good" or "poor" payers depending on the level of expected insurance reimbursement. Descriptive and multivariate analyses were used to assess the number of poor payer transfers admitted by each hospital group. RESULTS: In 2000, there were 58,509 transfer and 2,320,479 direct admissions. All hospital groups admitted a higher percentage of good payer than poor payer transfer patients (85% vs. 15% respectively for all groups combined). Adjusted for total number of admissions and teaching status, the number of poor payer transfer patients admitted to county-owned and University of California hospitals was significantly higher than the statewide average (both p values < .001), while the number admitted to independent teaching hospitals was significantly lower than the statewide average (p < .001). The number of poor payer transfer patients admitted to independent teaching hospitals more closely resembled that of for-profit hospitals than that of University of California teaching hospitals. CONCLUSIONS: In 2000, the likelihood of a hospital admitting a transfer patient appears to have been affected by both the patient's insurance status and the hospital's ownership. In general, good payer patients were more likely to be transferred than were poor payer patients, with poor payer transfer patients more likely to be admitted to publicly owned hospitals.
California↗
Resource-based relative-value scale expansion: implications for performance and quality of care.
OBJECTIVE: To assess the impact on the delivery of physician services from expanded use of Medicare's Resource-Based Relative-Value Scale (RBRVS) by multiple payers. DESIGN: A 1993 survey of insurers and targeted case studies of payers. RESULTS: Approximately one third of surveyed payers were using RBRVS in some fashion to pay for physician services, while another 40% were considering its adoption. The RBRVS is spreading to many types of payers--both public and private--and to health insurance product lines. Penetration of RBRVS is most prevalent within managed-care arrangements, accounting for 75% of all RBRVS-based products among payers. Many payers were found to be modifying aspects of the RBRVS and applying payment policies tailored to their specific needs. Most payers expect to achieve cost control, and several may be using RBRVS to profile physician service utilization. CONCLUSIONS: The diffusion or RBRVS to multiple payers may have a profound impact on the distribution of services provided, how these services are delivered, and the quality of care provided. Providers may respond to RBRVS by reducing some types of services, while increasing others, and using new resource combinations. Managed-care payers are likely to continue using RBRVS for negotiating fee schedules or for allocating payments for bundled service packages and capitation and sub-capitation products among physicians. As larger shares of physicians' incomes are driven by RBRVS, the underlying incentives become more critical. Nevertheless, RBRVS will remain an important payment approach in the future. The impact on quality and delivery of physician services from broader use of RBRVS cannot be measured adequately until future empirical studies are undertaken.
Data Collection↗
Medicare program; Medicare secondary payment--HCFA. General notice.
This notice provides guidelines for complying with 42 CFR 411.25, which provides that certain third party payers for health services furnished to Medicare beneficiaries must furnish certain information to Medicare intermediaries and carriers when they learn that Medicare made primary payment for services for which the third party payer has made or should have made primary payment. The notice also informs third party payers that they should contact HCFA if they wish to discuss arrangements for exchanging, on a voluntary basis, data about beneficiaries for whom the third party payer has a primary payment obligation under the Medicare Secondary Payer (MSP) provisions of the Medicare law. The third party payers affected by this notice are workers' compensation plans and insurers; all liability and no-fault insurers, including automobile insurers; and group health plans under certain circumstances, including plans which are self-insured and/or self-administered. If the group health plan, or workers' compensation plan is self-insured and self-administered, the employer must provide the notice; otherwise the insurer, underwriter or third party administrator must give the notice. This description of information third party payers must furnish is intended to help ensure that, in accordance with the Medicare law, Medicare pays only secondary to primary coverage of third party payers.
Centers for Medicare and Medicaid Services, U.S.↗
Competition among hospitals in the United States.
The value added by acute-care hospitals is in the form of specific procedures (therapy, operations, testing) and the bed care necessary to make the procedures effective. When more than one hospital exists in a local area (defined in many studies as a radius of 15 mi/24 km) they compete for market share, since greater market share has a positive effect on economies of scale, utilization rates, learning curves and levels of quality. Competition is not only with other hospitals (and 75% of all hospitals do have a competitor within 24 km), but also with doctors who now perform some procedures in their offices, and with specialized clinics. The first strategy is to attract physician allegiance since they act as gate-keepers, directing patients to specific hospitals. This is done through personal amenities, professional amenities and enhancement to personal prestige and income. This competition for physician allegiance has a direct effect on utilization rates (doctors want spare capacity to suit their needs), on the range of services and facilities offered (doctors want more support), and on length of stay (doctors want longer stays). All of these increase the hospital's costs. The second strategy is to enter into contracts with third-party payers who will direct their clients to specific or preferred hospitals. The negative effect is that in competitive markets such payers may be able to bargain prices down. However, hospital differentiation makes it difficult for payers to make complete substitutions among them. As well, since the payers compete for clients, they often use hospital alliances as a selling point and therefore are often cooperative rather than confrontational in their negotiations. One tactic used by hospitals is to stress quality of service. But since quality in health care is hard to measure, patients are often unable to make direct assessments of alternatives. Hospitals therefore often 'signal' quality in various ways which may, and often do, increase hospital costs. (Some of these signals also attract physicians). Price is not a major element in competition. Most other strategies and tactics raise hospital costs and therefore price. Pressure from payers is turned back through differentiation (preventing substitution) and hospital-payer alliances for clients. Health care comes in too many packages to allow effective price competition. A final tactic is to increase the range of services or facilities offered. Enhanced services attract doctors by offering more support; attract some patients direct; and help to recapture market share lost to specialized clinics.(ABSTRACT TRUNCATED AT 400 WORDS)
Catchment Area, Health↗
Prompt payment depends on revenue-cycle diligence.
How effectively you manage the revenue cycle is reflected in the cycle's outcome-whether you receive full and timely payment for all services billed to payers. To ensure prompt and full payment, you should: Educate your patient financial services (PFS) staff on all relevant laws and regulations regarding payment for healthcare services. Make sure your staff is well versed in all of the provisions of your payer contracts. Implement a state-of-the-art patient accounting system that is capable of producing drill-down reports of all aspects of contract performance by payer. Enforce payer compliance by maintaining complete records of dates of service, final billing dates, dates claims were mailed or electronically submitted to the payer, all actions performed by your staff regarding claims, and all communications with the payer.
Accounting↗
Health care financing policy for hospitalized black patients.
The Medicare diagnostic-related group (DRG) prospective payment model is changing hospital payment. Currently many states are using DRG prospective "all payer systems" for hospital reimbursement. In all payer systems, Medicare, Medicaid, Blue Cross, and other commercial insurers pay by the DRG mode; New York State has had an all payer system since January 1, 1988. This study simulated DRG all payer methods on a large sample (N = 6,134) of adult black medical and surgical patients for a three-year period using both federal and New York DRG reimbursement. Both Medicare and Medicaid patients had, on average, a longer hospital stay and total hospital cost compared with patients covered by Blue Cross and other commercial insurers. Medicare and Medicaid patients also had a greater severity of illness compared with those of Blue Cross and others. All insurers (ie, Medicaid, Blue Cross, Medicare, and commercial) generated substantial financial risk under the DRG all payer scheme. These data suggest that federal, state, and private payers may be under-reimbursing for the care of the hospitalized black patient using the DRG prospective hospital payment scheme. Health care financing policy such as that demonstrated in this study may limit both the access and quality of care for many black patients in the future.
Adult↗
The effect of managed care on ICU length of stay: implications for medicare.
OBJECTIVE: To determine whether insurance status (managed care vs traditional commercial and Medicare) influences resource consumption (as measured by length of stay [LOS]) in the intensive care unit (ICU). DESIGN: Retrospective analysis of the 1992 Massachusetts state hospital discharge database, using prospectively developed and validated risk-stratification models. SETTING: All nonfederal hospitals in Massachusetts. SUBJECTS: Of all adult hospitalizations where an ICU stay was incurred (n=104270), we selected those covered by 1 of 4 payer groups (n=88050): (1) commercial fee-for-service (patients aged <65 years); (2) commercial managed care (patients aged <65 years); (3) traditional Medicare (patients aged >/=65 years); and (4) Medicare-sponsored managed care (patients aged >/=65 years). MAIN OUTCOME MEASURE: Mean ICU LOS. ANALYSIS: The ICU LOS regression models were constructed using split-halves validation to adjust for differences in age, sex, severity of illness, diagnosis, discharge status, and payer. Separate models were constructed for those younger than 65 years and those aged 65 years or older. Robustness of the models was explored using goodness of fit and correlation. The effect of payer on hospital mortality was also explored using logistic regression. Observed minus predicted mean ICU LOS and mortality rates were correlated with managed care penetration at the hospital level. RESULTS: The ICU LOS models performed well (R2=0.84 and R2L [likelihood ratio statistic]=0.92 for the development set, and R2=0.83 and R2L=0.89 for the validation set). Significant covariables affecting LOS included age, severity of principal illness, comorbidity, reason for admission, and discharge status (P<.001 for each). Among the cohort younger than 65 years (n=27805), although unadjusted mean ICU LOS was shorter (2.9 vs 3.43 days; P<.05) for those covered by managed care organizations, payer status had no independent effect on ICU LOS (P=.48). Among those older than 65 years, there was neither a difference in unadjusted ICU LOS (3.94 vs 3.88 days; P>/=.05) nor an independent effect of payer on ICU LOS (P=.35). Unadjusted mortality was lower among managed care patients (3.9% vs 5.1% in patients aged <65 years [P<.05] and 8.7% vs 12.1% in patients aged > or = 65 years [P<.05]). Age, severity of principal diagnosis, comorbidity, and reason for admission significantly influenced mortality (P<.001). After controlling for these factors with the mortality model (R2L=0.92 and 0.89, C statistic [12 df]=8.45 and 17.58, and P=.75 and .13 [where a large P reflects good agreement] for the development and validation sets, respectively), payer continued to have a small but significant effect on mortality (odds ratios ranging from 1.67 at 0.1% probability of death to 1.11 at 30% probability of death.) Managed care penetration among the commercially insured varied across hospitals (n=82) from 0% to 68%. There was no correlation between managed care penetration and either ICU LOS (R2=0.04; P=.09) or mortality (R2=0.0; P=.88). CONCLUSIONS: Though patients covered under managed care consume fewer ICU resources, this appears to be primarily attributable to a difference in patient-related factors. Thus, as managed care case mix changes in the future to include sicker and older patients, the initial advantages of reduced resource consumption may diminish.
Adult↗
Reimbursement for nurse practitioner services.
Whether a nurse practitioner (NP) is employed by a medical practice or is self-employed, the reimbursement policies of third-party payers will determine whether an NP continues to provide care on a long-term basis. The payers--Medicare, Medicaid, indemnity insurers, and managed care organizations--each have their own reimbursement policies and fee schedules, and each operates under a separate body of law. Some payers have a history of reimbursing for NP services in the same manner as they reimburse for physician services. On the other hand, some payers have recently begun to reimburse NPs directly, either as separate and apart from an employment relationship with a physician practice or following NP-specific rules and policies regarding reimbursement. This article offers basic information necessary to communicate with practice managers, billing experts, and the payers about reimbursement mechanisms and problems. It covers how to set up provider relationships with the various payers, how to submit bills, and how to deal with denial of reimbursement when it occurs.
Forms and Records Control↗
Indirect cost assessment in patients with rheumatoid arthritis (RA): comparison of data from the health economic patient questionnaire HEQ-RA and insurance claims data.
OBJECTIVE: To render information on the accuracy of patient-reported indirect cost data compared with payer-derived data of the real indirect costs on a patient-by-patient basis concerning disease-related productivity losses in rheumatoid arthritis (RA). METHODS: The assessment of indirect cost data was part of a clinical, multicenter, randomized RA trial. A total of 234 patients of working age with a diagnosis of RA (according to 1987 American College of Rheumatology criteria) were recruited. Demographics of the cohort were mean age 53 years, mean disease duration 8 years, 76% were women, and all had membership in the regional statutory health insurance plan. Every 3 months corresponding indirect cost data were derived for the cohort from a health economic questionnaire for cost assessment in patients with RA and the payer's database over a period of 18 months. Comparative statistical analyses were performed between patient-reported and insurance claims data. RESULTS: The mean annual productivity losses due to sick leave amounted to 14 and 17 days per patient (questionnaire versus payer data), and productivity losses due to work disability amounted to 3 days (both); monetary valuation renders overall costs of 1,240 and 1,590, respectively. The difference of 17% in overall productivity losses is not significant. Comparison of productivity losses reveals a strong correlation of r = 0.83 in those due to sick leave and of kappa = 0.84 in those due to work disability between questionnaire and payer data. CONCLUSION: The comparison of questionnaire and payer data shows that RA patients report their productivity losses adequately. Indirect cost assessment should therefore be included in further RA trials and observational studies.
Adolescent↗
Effect of state legislation prohibiting denial of emergency department patient claims.
STUDY OBJECTIVE: On July 1, 1996, two Florida state laws were implemented to prevent denial of legitimate patient claims. Our objective was to determine whether the laws have been effective in reducing inappropriate denials as measured by the proportion of claims and charges denied. METHODS: A comprehensive set of claims for in-state emergency physician services from a physician billing company were analyzed for the period January 1996 through June 1997, covering 6 months before and 12 months after the effective date of state legislation. The number of facilities included in the data varied from 55 to 67 (mean 63). Denials were classified into 6 categories by payer type. Gross denials were those claims that were completely not paid by the payer, net denials represented the amount denied after patient payments. Downcoding was not examined in this study. Main outcome measures were the proportion of claims and charges denied before and after July 1, 1996. RESULTS: The classification of relative proportions of primary payers did not change appreciably over the study period. The proportion of denied claims decreased significantly (Kruskal-Wallis P <.001), starting 2 months after implementation. CONCLUSION: After initiation of state legislation, payers continue to inappropriately deny claims, although the number of claims and total charges denied has decreased. In response to this legislation, payers are denying larger claims and patient copayments have increased.
Emergency Service, Hospital↗
Adolescent pregnancy, infant mortality, and source of payment for birth: Alabama residential live births, 1991-1994.
PURPOSE: To assess potential impact of programs to prevent adolescent pregnancy on infant mortality. METHODS: Infants (n = 247,503) born alive to Alabama residents from 1991 to 1994 were identified from birth cohort files and linked to infant death records. Deliveries funded by Medicaid, private insurance, and self-payers were studied separately. Relative risks (RR) and population attributable risks were calculated. The latter provided estimated percentages by which infant (<1 year) death risks would have decreased if adolescent (< or =19 years) pregnancies had been prevented. RESULTS: Infants of mothers <16 years of age were at higher risk of death than were infants of mothers aged 20 to 34 years (adults): the RRs were 4.1, 3.4, and 1.4 for self-payers, private insurance, and Medicaid groups, respectively. In the self-payer and private insurance groups, but not the Medicaid group, infants of mothers aged 17 to 19 years were more likely to die than were infants of adults. Infants from repeat adolescent pregnancies comprised nearly one-third of all infants born to adolescents, and in each payer-group were more likely to die than were infants of adults: The RRs were 4.9, 2.5, and 1.3 for self-payers, private-insurance, and Medicaid groups, respectively. Theoretically, preventing all adolescent pregnancies and preventing only repeat adolescent pregnancies would have reduced infant mortality in the total population by 8% and 4%, respectively. CONCLUSIONS: Programs to prevent first and subsequent adolescent pregnancies probably have little effect on infant mortality. Efforts to prevent adolescent pregnancies should not have a short-term goal of notably reducing infant mortality.
Adolescent↗
The effect of medical insurance coverage on the obtainment of pressure garments.
Pressure garments are used to alter the appearance of immature burn scars. These garments are costly, and delays in obtaining them are frequent. The purpose of the study was to determine the nature of the delays in the obtainment of pressure garments and to examine the role that the payer plays in these delays. The billing and medical records of all patients with burns measured for pressure garments between January 1, 1998, and August 1, 1999, were reviewed. The distribution of payers was as follows: workers' compensation, 37%; state-funded insurance, 32%; health maintenance organizations, 12%; private insurance, 16%; and other, 3%. Payment authorization time for pressure garments was 37 days for state payers and less than 10 days for all other groups. Patients with state-funded insurance waited an average of 67 days to receive their garments as opposed to a wait of 20 to 30 days for other payers. The percentage of billed charges paid was least for patients with state-funded and HMO insurance (58% and 51%, respectively). The interval to payment of charges was longer than 60 days for all groups. Marked delays in authorization exist for state-funded reimbursement of pressure garments. Reimbursement for patients with state- and HMO-funded insurance was lower than for other payers. These differences may have an adverse effect on outcome.
Adult↗
Third-party reimbursement for nurse practitioners' services on trauma teams: working through a maze of issues.
Third-party payers reimburse for physician services performed by nurse practitioners, if the services are within the scope of practice of a nurse practitioner and the payers' rules are followed. However, some hospitals and trauma services have been reluctant to bill the services of nurse practitioners they employ or to hire nurse practitioners, because the rules are complex, vary from payer to payer, can be difficult to find, and because operations are not always set up so that nurse practitioners' services are bundled in ways which conform to the rules. Medicare has developed detailed rules on billing nurse practitioners' services, but neither Medicaid nor commercial payers necessarily follow Medicare's rules. The situation is further complicated by wide variations in state law governing nurse practitioner scope of practice and requirements for physician collaboration. Despite all of these variables, it may be worth the time and effort to sort out the requirements for utilizing nurse practitioners and billing for their services, considering the limitations on residents' hours, the data on quality of nurse practitioners' clinical services and the potential for generating revenue. This article describes the legal and business issues, provides the general rules for billing nurse practitioners' services, and provides a plan for obtaining third-party payment for nurse practitioners' services on trauma teams.
Centers for Medicare and Medicaid Services, U.S.↗