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STUDY OBJECTIVE: Effective for 1997, health reform legislation in New York resulted in a change in hospital reimbursement for victims of motor vehicle crashes. We evaluated the impact of this change from no-fault to Medicaid rates on the financial viability of a regional trauma center within an academic medical center. METHODS: This study represents a retrospective review of the trauma registry for all motor vehicle-related injuries (meeting the statewide definition of trauma) admitted to a regional trauma center for a 9-month period just before the legislation implementation date. Charges, costs, and projected reimbursement were calculated by standard hospital accounting methods. Profit or loss (reimbursement minus costs) was calculated by standard hospital accounting methods for each admission using no-fault and Medicaid reimbursement rates. RESULTS: One hundred seventy-three cases during the 9-month period generated total charges of $4,112,174, total costs of $3,447,110, and estimated total profit of $800,084 ($4,625 per case) using no-fault reimbursement and a total loss of $184,154 ($1,064 per case) using Medicaid reimbursement. For the 31 patients with diagnosis-related groups (DRGs) that were specifically created in New York to ensure adequate reimbursement for multiple significant trauma (730 through 734 and 792 through 794), no-fault reimbursement resulted in an average profit of $371 per case and Medicaid generated a loss of $6,118 per case. Actual payments for the study population were almost $500,000 less than estimated. CONCLUSION: Changes in rates of no-fault insurance payments to hospitals will result in inadequate reimbursement for motor vehicle crash victims admitted to a regional trauma center, undermining the viability of the regional trauma system.
BACKGROUND: Some physicians are willing to misrepresent clinical information to insurance companies to circumvent appeals processes. Whether characteristics of appeals processes affect the likelihood of misrepresentation is unknown. This study sought to determine the relationship between the likelihood of a successful appeal, appeals process length, and severity of the health condition and physicians' willingness to sanction deception. METHODS: A random sample of 1617 physicians was surveyed by mail to assess their willingness to accept an insurance company restriction, to appeal the restriction, or to misrepresent the facts to an insurance company to obtain coverage for a patient. RESULTS: Most respondents would appeal (77%) rather than accept (12%) or misrepresent (11%) regarding a restriction on medically necessary care. Physicians' decisions were related to the likelihood of a successful appeal (chi(2) = 7.56; P =.02), the appeals process length (chi(2) = 8.53; P =.01), and the severity of the medical condition (chi(2) = 71.10; P<.001). A small but significantly larger number of physicians chose to misrepresent the facts to an insurer as the appeals process became more cumbersome. Among physicians asked about severe angina, their decisions were particularly affected by the hassle associated with appealing, being more likely to choose to misrepresent the facts to the insurer than to appeal as the hassle increased. CONCLUSIONS: Physicians are more willing to sanction deception when the appeals process is longer, the likelihood of a successful appeal is lower, and the health condition is more severe. Changes in the difficulty of appeals processes may ease the tensions physicians face regarding patient advocacy and honesty.
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PURPOSE: A basic overview and definitions of commonly used billing and reimbursement terminology that pharmacists will need to know to obtain reimbursement for cognitive services are provided. SUMMARY: Currently, the profession of pharmacy has been gathering momentum in its efforts to seek and obtain reimbursement for cognitive services. However, there have been major barriers in seeking reimbursement, including the lack of understanding by third-party payers of the pharmacist's role in patient care and the pharmacist's in-depth knowledge of pharmacotherapy, the lack of appropriate billing codes for pharmacists' services, and the lack of detailed knowledge and understanding by pharmacy practitioners of nondistributive reimbursement mechanisms, processes, and terminology. The types of services provided are usually described by the American Medical Association's Current Procedural Terminology (CPT) codes for the face-to-face provision of patient care services by a pharmacist. As of January 1, 2006, pharmacists have been able to indicate the appropriate diagnosis code from the International Classification of Diseases, 9th Revision (ICD-9) (ICD-10 will replace the ICD-9 on October 1, 2007), and CPT code when billing under a major medical plan that recognizes the pharmacist as a patient care service provider. Understanding the billing and reimbursement terminology will aid pharmacist communication with third-party payers, Medicare, and Medicaid. A glossary of the most commonly encountered terms in billing and reimbursement procedures for cognitive services is provided. Also included are lists of Web-based reimbursement resources and references on reimbursement for cognitive services by the pharmacist. CONCLUSION: An understanding of terminology is important in receiving reimbursement for cognitive services.
The purpose of this study was to estimate the level of reimbursement necessary to provide community pharmacies with a reasonable profit on prescriptions dispensed through third-party prescription programs. Data were gathered by means of a literature review and a survey of community pharmacies in Virginia. Results indicated that an average reimbursement of average wholesale price less 15% plus a $6.95 dispensing fee was needed to provide pharmacies with a reasonable profit. This is much higher than the reimbursements currently provided in most third-party prescription programs.
Two private day hospitals and an insurance company offering group health coverage to federal employees undertook a pilot study to determine if providing insurance coverage for day hospitalization on the same basis as for inpatient treatment was a feasible means of controlling the cost of psychiatric care. The study included 31 patients who otherwise would have been hospitalized; most had histories of severe psychiatric disorders and extensive treatment. Using the measure that the day hospital patients would have been in inpatient treatment for the same number of days, the authors estimate that the use of day treatment saved the insurer more than $255,000. They recommend that day hospitalization be reimbursed on the same basis as inpatient care if a day hospital can meet stringent criteria ensuring that it provides active, appropriate treatment, and they present a list of such criteria.
INTRODUCTION: As prescription drug expenditures increase, third-party payors are increasingly scrutinizing costs and reimbursement guidelines, such as for medications that treat chronic conditions that are not necessarily directly life threatening (i.e., obesity, nicotine addiction, and erectile dysfunction). AIM: To review the costs and consequences of pharmacy benefit reimbursement policies related to erectile dysfunction therapies, using sildenafil citrate as the case study. METHODS: Data and references were found through searches of PubMed and Google. RESULTS AND CONCLUSIONS: To meet the varied health needs of a defined population under reasonable resource constraints requires analysis of cost and of the economic and non-economic consequences of a treatment. Based on analysis of sildenafil data, oral therapy of erectile dysfunction provides substantial cost savings when compared with other treatment options and contributes insignificant overall costs to health plans. Regardless, health plans impose controls to limit reimbursement. Because erectile dysfunction is often a precursor to other conditions, such limitations could compromise detection and management of underlying disease (e.g., depressive, cardiovascular, and urogenital). Reimbursement restrictions may also decrease membership satisfaction and re-enrollment rates.
OBJECTIVE: To measure the effect of a change in an insurance company's reimbursement formula on prescription department gross margins for all prescriptions and subgroups of prescriptions. DESIGN: Retrospective descriptive analysis. SETTING: Wisconsin. PARTICIPANTS: Two units of a chain pharmacy. INTERVENTION: Reimbursement changed from usual and customary price to average wholesale price less 10% plus a $2.00 dispensing fee for single-source products, and maximum allowable cost plus a $2.00 dispensing fee for multisource products. MAIN OUTCOME MEASURE: Gross margins for prescriptions dispensed in the month before and after the reimbursement change. RESULTS: The average estimated gross margin decreased 26.9% after the change in reimbursement, and the effect on the average gross margin for generic prescriptions was nearly twice that of the effect on the average gross margin for brand name prescriptions. The effect of the reimbursement change on different therapeutic classes ranged from an increase of 0.7% in the cardiovascular class to a decrease of 68.2% in the eyes, ears, nose, and throat class. The effect of the reimbursement change was greater for low-cost prescriptions than for high-cost prescriptions. CONCLUSION: The large effect of the reimbursement change, combined with continued growth in third party prescriptions, raises concerns about whether pharmacies can accept third party contracts with low reimbursement rates and still maintain current profitability and service levels.
OBJECTIVE: To determine whether patient counseling activities in community pharmacies are related to payment method and practice setting. DESIGN: Randomly selected pharmacists voluntarily performed self-data collection (39 percent participation rate) of counseling activities for 40 hours. Observational data were also collected by trained observers. SETTING: Community pharmacies. RESULTS: Forty-seven pharmacists in national chain pharmacies and 26 in independent pharmacies collected data on 3766 counseling events. Patient counseling rates, defined as percentage of patients counseled per prescription per pharmacist, were significantly higher (p < 0.05) for self-pay (median 12.9 percent) and Medicaid (median 13.0 percent) than for capitation patients (median 7.9 percent). Rates were somewhat higher (p = 0.06) for chain (median 17.7 percent) than for independent pharmacists (10.7 percent). Although there was no difference in terms of pharmacist-initiated counseling, chain pharmacists had higher rates of patient-initiated counseling per prescription (median 4.3 percent) than independent pharmacists (median 2.7 percent) (p < 0.01). Counseling information was related to payment method and practice setting. A significantly higher percentage (p < 0.01) of counseling events for capitation patients pertained to chronic therapies (33.6 percent) compared with counseling events involving patients using other payment methods (21.8-24.8 percent). A strong correlation between observational data and self-reported data was found (Pearson r = 0.696, p < 0.001). CONCLUSIONS: The finding that pharmacists counsel capitation patients less frequently may be attributable to financial incentives or to pharmacists' perception that these patients do not need to be counseled. Independent pharmacists' higher number of capitation patients and increased workloads may have affected their counseling activities. These findings have implications for pharmacy service reimbursement programs, practice conditions, and continuing education programs.
Estimating spending for prescription drugs has become increasingly difficult over the past 15 years as extensive changes have taken place within the retail prescription drug industry. Expenditures for prescription drugs in retail outlets grew rapidly during the 1980s and early 1990s. New retail outlets emerged and existing sites lost market share. New mechanisms for reimbursing drug purchases led to the flow of rebates between manufacturers and insurers, bypassing retailers. These and other major industry changes required the development of new estimating methodologies for tracking prescription drug expenditures within the National Health Accounts (NHA).
The objective of this paper is to investigate physician participation in the Medicaid program. In particular, how sensitive is the physician's involvement with Medicaid to variations in Medicaid reimbursements? How important are fee levels in the private market? What is the impact of inflation on the costs of physicians' inputs, particularly if the Medicaid fee remains relatively constant? These questions are explored through an empirical analysis fo data from the California Medicaid program. Two aspects of physician participation form the focus of the study: 1) the percentage of physicians participating in Medicaid in a given county and 2) the average number of nonaged, Medicaid patients treated by each participating physician. Information on these variables and on Medicaid fees and private charges come from Medicare and Medicaid claims records for more than 3,000 physicians. The most significant result of the study is the reaffirmation of the importance of the amounts of both private charges and Medicaid payments in determining participation rates and average Medicaid case loads per participating physician. Both dependent variables are, as expected, inversely related to physicians' average billed revenue per patient and are positively related to average Medicaid payments per patient. In addition, it appears that the long-run impact of a change in billed revenue is significantly larger in absolute value than a corresponding change in the amount that Medicaid is willing to pay.
This first part of a two-part article on how tax laws and Medicare regulations affect hospital malpractice insurance discusses self-insurance mechanisms, particularly trust funds. Relationships among tax exemptions, Medicare and other intermediaries' reimbursements, investment income from such funds, and payments to and from the funds are examined.
Certified professional coders from a multispecialty academic surgical practice used operative notes to identify 10 of the most common deficiencies for reimbursement of services. These 10 deficiencies were then used as evaluation criteria to audit the operative notes used as billing documentation. Twenty-four per cent of operative notes contained no deficiencies, whereas the remaining 76 per cent contained one or more audit criteria deficiencies. The three most common deficiencies identified included an incomplete description of all surgical procedures performed (56%), an inadequate description of the indications for procedures (49%), and only 45 per cent of the operative notes were dictated within 24 hours of the procedure. Thirty-nine per cent were dictated by faculty surgeons, whereas 61 per cent were dictated by surgical residents. Twenty-nine per cent of the operative notes that were dictated by faculty surgeons contained no deficiencies as compared with 20 per cent of the operative notes that were dictated by surgical residents. For a multispecialty academic surgical practice, the operative note is the document of justification for 75 per cent of revenue generated. We conclude that 1) the operative note represents the most important document for justification of reimbursement for surgical services, 2) surgeons should reassess the operative note as a billing document and provide the information necessary to expedite reimbursement, 3) surgical residents should be instructed in the details of an operative report as a billing document, and 4) most of the information needed in the operative note for billing purposes is simple and straightforward data that is important not only for reimbursement but also from a medico-legal and medical records standpoint.
This Notice is to advise that HCFA will begin enforcing the regulations regarding Medicare reimbursement for services furnished by hospital-based physicians. It reaffirms the rule that identifiable professional services will be reimbursed under Part B on a reasonable charge basis only if: (a) The services require performance by a physician in person and (b) they contribute to the diagnosis or treatment of the patient. All other services performed by a hospital-based physician will be reimbursed to the hospital on a reasonable cost basis. This rule was established in a regulation published in 1966, after public comment, but has not been applied uniformly in recent years.
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Current policies regarding reimbursement for oral anticancer drugs are discussed. Several legislative options that might expand such coverage are reviewed.