Reimbursement in Physical Therapy Practice - Week 5

Question 1

Retrospective method of Payment

Answer 1

• AFTER services are provided
(dependent on setting that PT services are provided)

• Known as “fee-for-service” or indemnity plans
–> Individual paid fee for health services provided similar to any other purchase of goods or services

• Fees paid are based on what is “usual, customary and reasonable” (UCR) for that area and service.
• Health care providers established their own fees (fee schedule) that specified the cost of their services.
• Providers had little incentive to limit services or costs

Question 2

Prospective method of Payment

Answer 2

• BEFORE services are provided
(dependent on setting that PT services are provided)

• Rising costs of health care created need to set limits on what services would be covered and how much would be paid those services
• Prospective payment system (PPS): payments are established before care is provided
• Fees and services covered set by insurance companies to control payments for high costs of health care
• Providers paid these amounts regardless of the costs they actually incur
• Health care choices now being influenced by insurance companies

Question 3

What were the driving forces behind The Health Maintenance Organization Act?

Answer 3

↑ control of the delivery of health care by third-party payers through government-mandated regulations of health care service = MANAGED CARE

• Predetermined payment schedule for covered services (discounted fee schedule)

Question 4

Managed Care:

Predetermined payment schedule

Answer 4

payment schedule for covered services (discounted fee schedule)

Question 5

Managed Care:
Provider network (panel)

Answer 5

Providers who sign a contract with insurance company and agree to the payment schedule

Question 6

Managed Care:

Established managed care organizations (MCOs)

Answer 6

Restrict access to services by limiting the types of, number of, or payment for services covered

Question 7

MANAGED CARE PROVISIONS

Answer 7

• Features within health plans that provide insurers with a way to manage the cost, utilization, and quality of health care services received by members

Question 8

Pre-admission certification

Answer 8

MANAGED CARE PROVISIONS

- before being admitted have to be certified to receive service

Question 9

Utilization Management/Review

Answer 9

MANAGED CARE PROVISIONS

• medical necessity, appropriateness, and reasonableness of services proposed or provided services to a patient or group of patients to reduce the incidence of unnecessary +/or inappropriate provision of services
• -> Prospective, Concurrent, Retrospective

Question 10

Case Management

Answer 10

MANAGED CARE PROVISIONS

- Cost-control process for patients with high-cost medical conditions

Question 11

Maximum plan dollar limit

Answer 11

MANAGED CARE PROVISIONS

- (caps) often combined with other rehabilitative services

Question 12

↑cost-sharing

Answer 12

MANAGED CARE PROVISIONS

- amount copay ect. are often higher for pt w/ managed care plans

Question 13

Health Maintenance Organization

HMO

Answer 13

Managed Care Organizations
• A health care system that assumes both the financial risks associated with providing comprehensive medical services (insurance and service risk) and the responsibility for health care delivery in a particular geographic area to HMO members, usually in return for a fixed, prepaid fee

• Subscriber sees a PCP, “Gatekeeper”, who coordinates all care including referrals for specialists

Question 14

Preferred Provider Organization

PPO

Answer 14

Managed Care Organizations
• An indemnity plan which provides coverage to participants through a network of selected health care providers (such as hospitals and physicians). The enrollees may go outside the network, but would incur larger costs in the form of higher deductibles, higher coinsurance rates, or non-discounted charges from the providers.

Question 15

Exclusive Provider Organization

EPO

Answer 15

Managed Care Organizations
• More restrictive PPO plan
• Enrollees must use providers from the specified network of physicians and hospitals to
receive coverage
• No coverage for care received from a non-network provider except in an emergency
situation

Question 16

Point of Service POS

Answer 16

Managed Care Organizations
• HMO/PPO hybrid
• POS plans resemble HMOs for in-network services.
• Services by out of network providers are covered, but at a higher rate (similar to a PPO
plan)
• There are typically fewer choices for providers with a POS plan compared to a PPO plan

Question 17

CONSUMER-DRIVEN HEALTH PLANS

Answer 17

• Combines employer contributions with increased employee choice and responsibility and increased health plan and provider accountability
• High deductible health plan with a personal or health savings account (HSA) option
–> lower premiums & higher deductible’s

• An HSA is a type of savings account that lets you set aside money on a pre- tax basis to pay for qualified medical expenses

• -> set amount each month to go to deductibles, copays etc
• -> is a cap to amount of money you can contribute to HSA each year but does roll over to next year

Question 18

HSA

Answer 18

• An HSA is a type of savings account that lets you set aside money on a pre- tax basis to pay for qualified medical expenses

• -> set amount each month to go to deductibles, copays etc
• -> is a cap to amount of money you can contribute to HSA each year but does roll over to next year

Question 19

Health Reimbursement Arrangements (HRA)

Answer 19

CONSUMER-DRIVEN HEALTH PLANS

• employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year

• -> unused can be rolled over to next years
• -> employer funds & owns arrangement –> employee gets services & pays for it –> then asks for reimbursement from employer

Question 20

Flexible Spending Accounts (FSA)

Answer 20

CONSUMER-DRIVEN HEALTH PLANS

• a special account you put money into that you use to pay for certain out-of- pocket health care costs

• -> don’t pay taxes
• -> used for deductibles, copays, insurance
• -> have to submit claim that service was not covered by insurance
• -> limit of $2,750 each year
• -> don’t roll over for each year

Question 21

Fee-for-Service

Answer 21

PAYMENT METHODOLOGIES

• Each procedure (CPT) that is delivered is billed with a specified fee
• Fee schedule is based on price/unit of care
• Incentive for providers to deliver as many services as possible
–> more codes billed = more money paid to provider

Question 22

Per-Visit (Per Diem)

Answer 22

PAYMENT METHODOLOGIES

• One lump sum payment for each patient/client visit
• Little regard for the specific type of procedures delivered during the visit
• Incentive for providers to deliver fewer procedures per visit and more visits per episode

Question 23

Per Episode

Answer 23

PAYMENT METHODOLOGIES

• Single payment for all services delivered to a patient/client for a given episode of care
• Payments are based on a predetermined fixed amount for that condition (diagnosis code)

ex: bundle payment for care related to diagnosis

Question 24

Capitation

Answer 24

PAYMENT METHODOLOGIES

• Fixed, pre-arranged payment each month for all the covered subscribers for which the provider is responsible
• Payment is the same regardless of the number of interventions provided or volume of patients seen
• if facility sees a lot of patients and charges more than the fixed amount = they loose money
• if see fewer patients and charge fewer than fixed amount = they make money

Question 25

Multiple Procedure Payment

Answer 25

PAYMENT METHODOLOGIES • Subsequent procedures performed during the same session by the same provider are reduced usually by a percentage of the allowable amount • Payer will reduce payment by the number of units billed --> payer pay full price for 1st procedure then they reduce payment for any more procedures in the same encounter

Question 26

PAY FOR PERFORMANCE

Answer 26

* Aim: improve the quality, efficiency, and overall value of health care by linking payment to value (quality and efficiency) of care * The provider is paid based on a metric of desired outcome: meet or exceed agreed-upon quality or performance get financially rewarded - -> Episodic Care of Payments - -> Bundled Payment - -> Shared Savings: the provider(s) will receive a portion of the cost savings associated with managing a condition and achieving a desired outcome

Question 27

Shared Savings

Answer 27

``` the provider(s) will receive a portion of the cost savings associated with managing a condition and achieving the desired outcome --> each facility forms an ACO and each receives a portion of the money that was saved by achieving the desired outcome sooner ```

Question 28

Prompt Payment Act

Answer 28

• Created for delayes in payments for services that are provided * Timely payment for health insurance claims * Determined by individual states * Clean claim rules: claims that are correctly and completely filled out with all required documents attached * Typically time limit for payment of clean claims gives insurers 30 working days to pay such claims before interest charges begin to accrue

Question 29

RETROACTIVE CLAIM DENIALS AND ADJUSTMENTS

Answer 29

* Payers can retroactively deny, adjust or seek refund for an already processed claim * Payers conduct an audit to verify claims were paid appropriately and accurately (not medically necessary, service was coded incorrectly, service was not covered, inadequate documentation, prior authorization was not obtained) * Payers try to recoup payment from a provider for a claim the payer believes was paid in error * Reduce payments currently owed the provider, withhold future payments, or request refund from the provider * depends on state laws and regulations vary

Question 30

Reimbursement changes impact on physical therapy practice

Answer 30

• Discounted fee schedules • ↑ documentation requirements (demonstrate medical necessity, functional gains after each PT session) --> unpaid time (can't do in front of patients) * Limitation on the number of visits and types of services covered * Limits visits by patients who cannot afford co- pays/coinsurance for each visit * Changes in service delivery: necessitated ↑ efficiency & cost- effectiveness of services * ↑ non-billable time to advocate for more visits and documentation requirements for proper reimbursement

Question 31

INCREASED SPENDING ON PT SERVICES

Answer 31

* Aging population * ↑ consumer awareness of PT * Expansion of coverage for rehabilitation and habilitation services under the ACA * ↑ number of covered lives as a result of the ACA Exchanges and Medicaid expansion * Proven value of PT benefit compared with high-risk or invasive alternatives

Question 32

How can PT's be proactive?

Answer 32

* Developing effective collection strategies. * Using and building evidence-based practice to justify interventions. * Using a standardized documentation language that can be understood by multiple stakeholders in the reimbursement process. * Understanding costs to provide PT care. * Advocating to increase the profession’s role as primary care practitioners or practitioners of choice. * Supporting APTA in its efforts to influence payment and health care policy changes.