Ambulatory infusion: The key to success

Why reimbursement is the name of the game

Every industry has its buzzwords and hot trends. For home infusion providers, one of the latest trends is following the ambulatory infusion center down the road to riches. But not every road leads to a pot of gold. There are dead ends and potholes along the way.

All the research in the world may be for naught if you fail to analyze your reimbursement sources carefully and overlook the various ambulatory infusion center models.

"It’s important to find out who will pay for the service before you provide it," explains Michael Tortorici, RPh, MS, president of Dayton, OH-based national health care consulting firm Alternacare of America. "There are people out there promoting ambulatory infusion as a panacea, and I want to caution people that if they plan on getting into this endeavor, they first need to find out if they will get paid and who will use it."

How are different models reimbursed?

First, you need to be aware of the three models of ambulatory infusion centers and the nature of each model’s relationship to reimbursement, says Alison Cherney, principal of Cherney & Associates in Brentwood, TN. If you understand these relationships, you’re well on your way to successfully evaluating whether an ambulatory infusion center is for you.

The three models are:

1. Outpatient center.

Cherney notes that this model is a hospital-based model and can bill for all reimbursement classes.

"You can also set up a freestanding outpatient center, but you may need to meet Certificate of Need requirements in your state," she says.

Or you can consider having a local hospital outsource work to you. "If you have an independent infusion pharmacy, you can contract with a hospital to provide the compounded medication and the final product to the hospital’s infusion center," says Gary Collins, president of Professional Reimbursement in Orlando, FL. "I’m finding that hospitals are understaffed, or else their pharmacists are trying to jockey for position under the hood."

2. Physician office-based center.

"If your biggest referral source is a physician, and he wants you to take care of his Medicare population, it makes sense to set up the center where the patients come into the physician’s office and Medicare will pay for it," according to Cherney. "It’s the whole concept of joint marketing, much like McDonald’s and Disney. There is a mutual gain to be had there."

However, if you receive referrals from numerous physicians, that could be a different story. "Technically, the physician referring the patient would have to turn the patient over to the physician for the infusion," she says.

She adds that there also may be some education involved should you work with a physician, regardless of the model.

"If you ask Dr. Brown how many patients he can refer to you, he automatically thinks to send you just the home care patients," says Cherney. "It’s much like home care was in the early 80s. We have to educate and work with physicians."

3. Freestanding center.

These centers are few and far between for one simple reason: reimbursement.

"We don’t have very many for the simple reason that Medicare will not pay for it, although there are some states where Medicaid will pay for it," says Cherney. "If someone has a Medicare-based patient population, they are going to have to set up either a physician-based center or an outpatient-based center. Those are the only two options you have. It is that cut and dried."

However, if you have enough managed care business, you may be able to succeed with a freestanding center. But you’ll still have to do plenty of upfront work to guarantee success.

"The best case scenario would be to get an exclusive contract with managed care," says Tortorici. "Some organizations have signed nonexclusive managed care contracts, and the business they receive is marginal because the managed care organization has signed multiple contracts. If you are going to spend the money up front for an ambulatory infusion center, you need a certain commitment from managed care to support it."

Be creative when looking for an exclusive contract. Tortorici notes that you can carve out geographic exclusivity or an exclusive niche contract such as pediatrics or HIV.

Medicare, Medicaid prove tight-fisted

Once you’re familiar with the various ambulatory infusion center models, it’s time to play mix-and-match between your own reimbursement and the model that best suits your payer sources.

Tortorici sums it up best: "It is very difficult for a freestanding ambulatory infusion center to get reimbursement from Medicare and Medicaid," he says, adding the managed care isn’t necessarily a cash cow, either. "Many managed care contracts do not include ambulatory infusion center services."

To prevent this problem, Tortorici recommends meeting with your managed care providers to negotiate a rate for therapies provided in your ambulatory infusion center. Although the rate will be less than the one for home care, you should be able to make up the difference by having the nurse in the center treat more patients in a day than in the home. Keep in mind that some costs will increase, such as liability insurance.

In the end, the agreement should benefit both sides of the equation.

"An ambulatory infusion center must be profitable for the provider, and the payer must save money," says Tortorici.

Along those same lines, it’s important for your center to bring in new patients rather than simply changing therapy locations for patients.

"I’ve seen organizations that have cannibalized their home care business, so do the appropriate homework," says Tortorici.

Billing goes hand in hand with reimbursement, so it only makes sense that you consider potential billing problems as well. But you don’t need a specialist — just a willingness to train your current billing staff. According to Tortorici, training would likely be necessary for any new pricing schedule, special coding required by payer sources, or new formats when submitting bills.

One of the best ways to take care of potential problems is to meet with the payer up front.

"There is no substitute for meeting with the payer to determine what is necessary," says Tortorici. "And bring billing staff to subsequent meetings to avoid initial problems. The last thing anyone wants is to start a program that causes a distraction."