1. Dollars and Sense of Rehab Part 2: Physician Payment Systems Sue Palsbo, PhD, MS NRH Center for Health & Disability Research

2. Goals for Understanding History of Medicare physician payment Alternatives to FFS payment Spreading financial risk Understand parts of a managed care contract

3. What is Medicare? Federal program Part A -- Inpatient (facility and house staff) -- acute hospitals, rehab hospitals, SNFs Part B -- Outpatient, physician, durable medical equipment, home care

4. Who is Medicare? Aged -- most people age 65+ –Entitled separately to Part A and Part B –Sometimes, your patient will be entitled to Part A, but NOT Part B Disabled -- mostly people with psychiatric disabilities, or people who were employed and then became disabled Sometimes, Medicare beneficiaries are also eligible for Medicaid

5. What is Medicaid? State programs –Combined with Federal money Pays for medical care Often more generous than Medicare when covering durable medical equipment and assistive devices Pays for Rx Pays for transportation to doctor’s appointments

6. Who is Medicaid? Eligibility varies state to state –Poor –Blind –TANF (temporary assistance to needy families) –SCHIP (state children’s health insurance programs) Disabled -- mostly people with developmental disabilities

7. Dual Eligibles People who have both Medicare and Medicaid coverage

8. History of Physician Payments - FFS UCR –Usual (simple average of what you charge) –Customary (what most people in your area charge) –Reasonable (some percentile of what everyone charges) –Insurers pay you the least of these 3 You can BUY this information (so can other payers)

9. Example CPT 99205. Evaluation and management of a new patient, which requires these 3 components: –a comprehensive history –a comprehensive examination –medical decision making of high complexity Counseling and coordination of care with other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the presenting problems are of moderate to high severity. Physicians typically spend 60 minutes face-to-face with the patient and/or family e.g.: Initial office evaluation and management of patient with systemic vasculitis and compromised circulation to the limbs. Others?

10. How Much Do You Charge?

11. Consequences (Gaming the System)

12. History of Physician Payments - RB-RVS

13. Overall PPS Methodology Nation-wide base dollar amount Local geographic wage multiplier Nation-wide condition multiplier Payment

14. Overall Physician Methodology Nation-wide base dollar amount Local geographic practice cost index (GPCI) multiplier Nation-wide RBRVU multiplier Payment

18. Impact of RBRVS Physicians increased volume CMS clamped down on fees to compensate Physicians upcoded complexity CMS rebalanced RVU scale to compensate Physicians declined to “participate” Congress passed limit on non-participating fees (115%?) Cottage industry to develop RVUs for “gap codes”

19. Private Sector Insurance

20. OWAs Per Diem Global Fees Balance Billing

21. Difference Between HMOs and PPOs Deductibles Co-insurance Co-payment

22. You Will Probably Not Be Alone

23. HMO Enrollment

26. Capitation Contracts by Specialty

27. Why Capitate? Shifts financial risk from insurer to you! –Your patient may be on Medicaid; Medicaid capitates the HMO Large numbers of people/encounters Define by CPT Rate books (utilization and pmpm) Risk adjustment (age/sex/condition) –http://www.nrhchdr.org/RAFieldGuide.prn.pdf My advice: Retain an actuary!

28. Contact capitation

29. Stop-loss reinsurance Accumulators –Per patient –In aggregate Thresholds

30. Coordination of Benefits Primary Secondary Auto, etc.