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Consultants and others who work with the wound care community say reaction to the new payment systems for Medicare patients has ranged from complete denial to utter panic. There is fear that there won't be enough money available to manage complicated cases, and that facilities won't know how to manage their money because they won't know until the patient comes through the door - if then - how much reimbursement will be paid.
Those concerns are quite valid, says Peggy Dotson, RN, BS, director of reimbursement and payer alliances for ConvaTec, a Bristol Myers-Squibb company in Skillman, NJ. There is some question, for example, as to whether the new payment systems have adequately considered the wounds that don't heal quickly and that require extensive skill, management, and support, she points out. "Providers delivering this care should not be penalized, and there's not a lot of maneuvering room in the reimbursement system," Dotson says.
She recommends that providers document the issues causing reimbursement problems so they can lobby for modifications as the process moves forward. "There are always complicated cases that need additional resources," she adds. "You should document those that need extra coverage to help drive better care in the future."
Meanwhile, here's a look at some of the ways reimbursement will be affected in various wound care settings.
Under the new prospective payment system, skilled nursing facilities (SNFs) will have to do a standardized assessment of the patient, recorded on the Minimum Data Set form, Dotson explains. Assessment data are analyzed by RUGS III software to calculate the appropriate category of reimbursement. (RUGS II software is available commercially). There are seven categories, broken down into 44 subcategories based on acuity, severity, and diagnosis, she says. (See related story for a summary of how Medicare reimburses skilled nursing facilities, p. 88.)
The caregiver must do several assessments - one within five days (for the first 14 days' payment), one by about day 14 (for the next two weeks' payment), and then at 30 days, 60 days, and 90 days. In theory, Dotson says, payment can change depending on the patient's condition.
The tricky part is that the SNF won't know what the payment is until it's done an assessment, making this a critical business factor, she says. "They will need discipline to complete the MDS-II, and need to manage within the coverage amounts they're getting for the RUGs III category."
The interim payment system for home care agencies began going into effect in October 1997, depending on when the facility's fiscal year begins. Since October, Dotson says, the government has added a third calculation for how Medicare will pay: a per beneficiary cost limit.
"In the past, [agencies] were paid by actual costs or by a per-visit limit cap, meaning the government would calculate the regional average cost of care and would establish a cap about 112% above the regional average," she explains. "The agency could reconcile costs at the end of the year so there was help with outlier patients."
With the new system, however, the agency must pick the lowest of three calculations, and the third is fairly restrictive, Dotson points out. The per beneficiary limit was based on the agency's cost report data for 1994, then multiplied by 98%. "If that's the lowest of the calculations, that's the highest [reimbursement] they will get for Medicare beneficiaries, and there's no further reconciliation at the end of the year," she adds.
Beginning in January 1999, wound clinics - which are now paid under a fee-for-service arrangement - will be under a payment system similar to that for ambulatory surgical centers, with set fees for all procedures, Dotson says.
There are a couple of hundred ambulatory procedure codes (APCs) for outpatient clinics, with a subset of those for wound care. The procedure codes already exist, she says, but they will be regrouped.
"By January of next year," Dotson notes, "the majority of care delivery areas will be under some type of predetermined rate system for the management of patients, instead of under fee for service. This is changing how care is delivered, and it begs the question, 'What's the best care that can be given in the most efficient manner?' You need quality care to get results, and efficiency to stay within coverage amounts."