1. PHILHEALTH CIRCULAR NO.31 ALL CASE RATES POLICY NO. 1
IMPLICATIONS FOR OUR PRACTICE

2. PHILHEALTH CIRCULAR NO. 0031, S 2013
All Case Rates (ACR) Policy No. 1
Governing Policies in the Shift of Provider Payment Mechanism from Fee-for-Service to Case-Based Payment
Published October 31, 2013
Implementation Date November 15, 2013

3. RATIONALE Republic Act 7875 (amended) Article 1 Section 2
Guiding Principles
Universality - Coverage for the entire population with at least a basic minimum package of health insurance benefits
Equity - provide Uniform Basic Benefits
Effectiveness - balance economical use of resources with quality of care

4. RATIONALE Republic Act 7875 (amended) Article 1 Section 2
Guiding Principles
Cost Sharing - continuously elevate its cost sharing schedule to ensure that costs borne by members are fair and EQUITABLE and that the charges by health care providers are REASONABLE…
Cost Containment - incorporate features…in its design and operations and provide a viable means of helping the people pay for health care services

5. IMPLICATIONS Lacks a definition of some terms
“basic minimum package of health insurance benefits”
Equity = “uniform basic benefits”
Effectiveness: economical use of resources ⚖ “quality of care”
We should define standards of eye care (not necessarily CPG)

6. IMPLICATIONS Disturbing facets
Effectiveness: economical use of resources ⚖ “quality of care”
We should define “quality of care” and enumerate the requisites to the provision of that quality
Cost sharing - “to ensure that costs borne by (all) members are fair and equitable and that charges by health care providers are reasonable…”
extends beyond NBB
may lead to fixing out-of-pocket costs

7. FEE FOR SERVICE (FFS) SCHEME
Limited PHIC from fully realising the intents of guiding principles
FFS leads to
prolonged hospital stays
over-utilisation of diagnostic procedures
provision of unnecessary and inefficient health care service without additional value

8. FEE FOR SERVICE (FFS) SCHEME
Inequity in claims paid for similar conditions when comparing payments to private and government health care institutions (HCIs)
PHIC’s support value average <30%
Indigent patients still have to pay cost-shares for services even in government HCIs

9. GLOBAL TREND TOWARD UHC
Shift to Case-based Payments
Case-based Payments and DRGs (more advanced) advantageous to members and healthcare providers
One uniform rate for the provision of a minimum level of quality care under the most modest of accommodations regardless of member category or nature of healthcare institution
Promotes an equitable basic standard that is the same for similar provisions whether admitted in government or private health care providers
We should really define standards regarding the quality of care

10. CASE RATE (CR)
Allows PHIC to improve administrative efficiency by reducing turn-around time (TAT) for paying health care providers
Allows members to know how much they are entitled to - empowering
Reduces discretion of claims processors
Makes possible the NBB policy for sponsored members

11. ASSUMPTIONS There is mounting evidence of the advantages of CR
Initial experiences (PHIC Circ No.11, s 2011) have proven its value
TATs improved from 70 days to days
However, since limited to 23 conditions, stymied the realisation of the promises of CRs, PHIC BR No.1679, s approved shift to CR from PFS
Advantages are procedural and not substantiated with outcomes

12. GENERAL OBJECTIVES To phase out fee-for-service payment mechanism
Will HMOs follow suit?
To simplify reimbursement rates understood by all sectors
How will the public know the rates?
To improve turnaround time of processing of claims
Will the system handle the volume efficiently?

13. SCOPE AND COVERAGE
Uniformly applied to all medical conditions and procedures
Also apply to all identified day surgeries and select procedures
Also apply to all directly filed claims by members subject to compliance to rules on direct filing

14. DEFINITION OF TERMS
Case-based Payment - predetermined fixed rate for each treated case or disease; also per case payment
Case rate (CR) - Fixed amount for a specific illness/case which shall cover for
Fees of health care professionals
All facility charges including (but not limited to)
room and board
diagnostics and laboratories
drugs, medicines and supplies
operating room fees and other fees and charges

15. DEFINITION OF TERMS
Day Surgery - ambulatory or outpatient surgeries that include
elective (non-emergency) surgical procedures
minor or major
local, regional, or general anesthesia
patients are safely sent home within the same day (DOH AO No.183, s.2004)

16. DEFINITION OF TERMS
Relative Value Scale (RVS) - Systematic listing and coding of surgical procedures
Five-digit code - simple and “accurate”
Relative Value Unit (RVU) - A number assigned to surgical procedures by the Corporation that reflects its relative weight or its degree of complexity as compared to another; associated with relative difficulty of the procedure
Inconsistent with case rate where the emphasis is on outcome
Should be more reflective of disability and effect on quality of life

17. DEFINITION OF TERMS
ICD 10 - Statistical classification that contains a limited number of mutually exclusive code categories which described all disease concepts
Critical Poor - Assessed/identified as poor by Medical Social Welfare who are not listed or registered to the Sponsored Program but can immediately avail of NHIP benefits; subject to validation of the DSWD
Sponsored Member - contribution is paid by another individual, government agency, or private entity according to the rules of the Corporation

18. DEFINITION OF TERMS
Geographically Isolated and Disadvantaged Areas (GIDA) - marginalised population physically and socio-economically separated from society and characterised by:
Physical factors - distance, weather conditions and transportation difficulties
Socio-economic factors - high poverty incidence, vulnerable sector, in situations of crisis or armed conflict

19. DEFINITION OF TERMS
Charge to future claims - system of charging to reimbursements that will be claimed by the Health Care Professionals (HCP) for sanctions to violations to PHIC policies and other instances where PHIC should recover what have been previously paid for
No Balance Billing (NBB) Policy - no other fees or expenses shall be charged or paid for by the patient- member above and beyond packaged rates

20. GENERAL POLICIES ON CASE RATE PAYMENTS

21. FFS is being phased out and preferred mode shall be case rates
Objective is to reduce the out-of-pocket expenditures of patient- members. In no instance shall case rates be added to the expenses.(?)
Needs clarification but ominous
Specified procedures in IRR shall be paid in full whether done as inpatient and outpatient
We should submit a list or a policy statement enumerating the exceptions

22. D. All CR Payment shall be paid to the account of the HCI
The HCI shall be made accountable to PhilHealth and to its beneficiaries for all that happens to the patient beneficiary while under the HCI’s care
Pressure on HCIs to monitor their doctors
The HCI should facilitate payment to HCP within 30 calendar days upon receipt of reimbursement or to a time frame as agreed upon by the specific facility management and their professionals. PhilHealth shall regularly inform HCPs of payments made to HCIs
Empowers HCI to negotiate with the doctors
Silent on the formula for splitting the reimbursements

23. D. All CR Payment shall be paid to the account of the HCI
The HCI shall withhold the expanded withholding tax…for their professional fees. The HCI shall withhold final VAT on Government Money Payment (GMP) if applicable.
HCI is withholding agent consistent with BIR Regulations on Professional Fees
PhilHealth shall withhold the income tax as per BIR policy against the case rate amount to be paid to the HCI
Tax evasion is more difficult especially if all cases are covered

24. E. Credentialing and privileging of doctors (including specialists), and other heath care professionals shall be delegated to the concerned HCI. PhilHealth shall no longer have tiered payments according to training or specialisation of the doctors.
The HCI can tier payments.
F. HCIs shall be responsible to file the claims of PhilHealth beneficiaries within the prescribed period of filing (60 days).
G. Direct filing by members shall only be allowed for certain circumstances as prescribed by PhilHealth.
H. The No Balance Billing (NBB) policy shall apply to all indigents and sponsored sectors.

25. I. The Corporation shall set specific case rate for special circumstances:
Geographically Isolated and Disadvantaged Areas (GIDA)
Health Human Resource Shortage areas
Emergency/acute care - selected emergency department visits that are skilfully evaluated and efficiently managed without need for further admission
Other special circumstances…by the Corporation
Incentive to practice in remote areas

26. MEMBER BENEFITS UNDER CASE RATES
HCI should deduct the entire CR amount from the patient’s total bill including professional fees at all times
Professional services must be provided by accredited health care professionals.
Responsibility of HCI to inform PHIC members on status of accreditation of their HCPs
The method will be dependent on the HCI unless the IRR puts specific rules
There should be at least one PHIC accredited doctor managing the case
If services are provided by nonPHIC accredited professionals only, then the claim shall be denied
nonPHIC accredited doctors can still perform the surgery as long as the signatory is the accredited doctor
Patients with multiple medical conditions, co-morbidities or requiring multiple procedures per confinement, PHIC shall endeavour to pay for all admissible medical conditions and/or procedures subject to limits set by PHIC Board, which will subject of a separate PhilHealth circular

27. OTHER PROVISIONS SYSTEM ENHANCEMENT
PhilHealth database designed and improved to generate real- time, quality and responsive information/evidences for evidence-based policies and rates adjustments
COMPLIANCE MONITORING
Regular Post-audit monitoring and evaluation of HCPs

28. OTHER PROVISIONS
PERIODIC REVIEW, EVALUATION AND ADJUSTMENTS IN POLICY AND RATES
Reviewed annually and as necessary
…Proposed costing and grouping from medical societies and organisations,…shall be used to enhance the rates and groupings for the case rates
Opening for PAO to pro-actively study the rates and groupings, and make proposals

29. PENALTIES AND SANCTIONS
Appropriate penalty and sanctions pursuant to R.A.7875, amended by R.A.1066, its IRR and other issuances
Any violation included in Provider Engagement through Accreditation and Contracting for Health Services (PEACHeS); Penalties charged to future claims
The DOH, PRC, and other concerned agencies shall be furnished a copy of decision against HCI for information and appropriate action

30. FINAL PROVISIONS REPEALING CLAUSE SEPARABILITY CLAUSE EFFECTIVITY
15 days after publication

31. GENERAL COMMENTS
The underlying philosophy that the change in the payment scheme will improve the quality of care is fallacious
The quality of care in terms of standards of care and eventual outcome must be defined and monitored to refute or substantiate PHIC claims
The healthcare environment the PHIC intends to create is discouraging and may eventually lead to a reduction in healthcare providers