Empowering staff crucial to prospective payment
Empowering staff crucial to prospective payment
Everyone must understand need to cut costs
Mountainland Rehabilitation & Health Care Staffing Advantage in Salt Lake City has had plenty of practice preparing for the rehabilitation prospective payment system (PPS) because of the company’s experience adjusting to changes under the skilled nursing facility PPS.
If the PPS lessons can be condensed into one essential nugget, it’s this: "You need to evaluate your actual costs and actual revenue, and you have to know your costs thoroughly," says Melissa Guss-Hoffelmeyer, MS, CCC, corporate director of clinical services and corporate compliance for the contract company, which operates 16 outpatient clinics and provides rehabilitation services to nursing homes, schools, hospitals, intermediate care facilities, and home health agencies.
How thoroughly do you have to know your business? Facilities will need to know exactly how much it costs them to provide care to every type of diagnosis and case mix. Once they understand those costs, they can decide whether they can afford to provide various high-cost, high-skilled services that may require hiring staff who are specially trained. If the potential reimbursement is less than what those services would cost, then a facility can decide not to expand or not to continue providing those services.
That’s why a facility must know every last cost detail. Can the facility afford to take on expensive cases, even if Medicare’s reimbursement falls short of costs? "But if you stop providing those services for a Medicare patient, you can’t provide it for patients with other payers," Guss-Hoffelmeyer warns. "You may not want to cut those services, but you’ll need to look at your reimbursement for all payers of patients in a certain diagnosis category and then decide whether they’re financially feasible for you to accept."
Then once you understand your facility’s true cost per diagnosis, you’ll need to explain these costs to your staff because they will do a much better job of controlling costs if they understand how the system works, she advises.
Guss-Hoffelmeyer offers these four suggestions on how to teach staff about PPS and how to control costs under the system:
1. Emphasize efficiency over productivity.
For both rehab and skilled nursing facilities, the buzz word used to be "productivity." Facil ities measured employees’ productivity and set goals based on it. PPS has placed the focus on efficiency, because the employees who spend the most hours on patient care will not necessarily be the ones who help the facility’s bottom line, Guss-Hoffelmeyer says.
Traditionally, rehab facilities may have considered therapists’ productivity in terms of billable hours, which could be enhanced by therapists spending more time on each case. Under PPS, the therapy hours are no longer billable in the same way they were under a fee-for-service system. The goal is to help patients achieve the best outcomes with a minimal number of therapy hours. As a result, the number of billable hours per week may decline, and the number of billable hours per case definitely will decline.
That’s why facilities will have to focus more on efficiency, helping staff make the best use of the billable hours they have. This could mean cramming more patients into a day by giving each patient shorter therapy sessions, or it could mean helping patients achieve their goals in much shorter periods of time.
Also, some facilities will decide not to replace therapists as they leave so the remaining therapists will have to learn to handle more patients, each with shorter total therapy times.
Know your costs to plan your profits
Under PPS, a facility will have accurate data about what it will be paid for each case. Rehab facilities that do their homework also will know what it costs them to provide that service, depending on the final length of stay and therapy hours. With this knowledge, the facility can teach staff to be more efficient to reduce costs and therefore increase profits.
For instance, suppose therapists A and B each are handling cases for which the facility will receive $1,200 for therapy services. Therapist A traditionally has been one of the facility’s most productive therapists, cramming an extra 30 minutes of therapy into each day. In this one case, therapist A gives the patient 100 minutes more of therapy time than what the Medicare case rate would predict. While this gives therapist A high productivity, it costs the facility money because the rehab organization must pay for the 100 extra minutes Medicare will not reimburse.
Therapist B actually spends 30 minutes less time on the case than predicted by the Medicare case rate, but the patient still has the expected outcomes and the rehab facility makes a profit on the case because the cost is lower than the amount of reimbursement.
Therapists should know money matters
Until therapists understand exactly how reimbursement works under PPS, they won’t understand their own impact on the facility’s ability to make a profit or at least to not lose money. "People tend not to involve therapists in the business operations because they feel it’s too frustrating or frightening for them," Guss-Hoffelmeyer says. "And there are some employees who say they don’t want to learn that stuff."
But once a rehab facility gives employees the best information and encourages them to become involved in making decisions about patient care, employees will work harder at making their services more efficient and cost-effective.
2. Design a case management tool.
Mountainland Rehabilitation uses such a tool for skilled nursing staff and has found that it clearly illustrates the importance of using therapy time wisely. Each day, therapists, working together in a team, determine how many minutes of therapy they will provide for each patient. They break down the time between direct and indirect time.
Then they complete a form, recording information as follows: First, they put in their planned number of minutes of therapy. Second, at the end of the day, they record their actual minutes of therapy. Third, they calculate the difference.
For example, under skilled nursing PPS, there is one category that requires at least 325 minutes of therapy per week. On one day, the patient might receive 20 minutes more therapy than planned, and on another day the patient might receive 20 minutes less. The daily form will calculate whether the patient’s therapy minutes are up or down by so many minutes. Then, when the therapy team works with the patient on the next day, the team can adjust planned time accordingly.
The tool also ensures therapists provide Medi care’s required minimum number of minutes.
While the Health Care Financing Administra tion (HCFA) already has announced that it will not use the unit of minutes in its final PPS proposal for rehabilitation facilities, the concept is the same, Guss-Hoffelmeyer says. The rehab PPS might use some other unit of measurement.
3. Show staff how to bank therapy time.
Mountainland administrators also have a tool that collects data on how much a therapist’s labor costs per minute of therapy. It breaks down the therapist’s labor costs into a percentage of revenue, including their total billable and total nonbillable time. The tool gives administrators and therapists a big picture of where each case stands with regard to therapy needs and meeting minimum requirements.
Therapists then can pull a sheet that says patient X needs 30 minutes more of physical therapy that week, but patient Y has received 45 minutes more than required by HCFA. Based on this, the team can arrange schedules to give patient X more time than patient Y. The administrator can pull a report showing the facility’s profitability for the month-to-date. For instance, suppose the facility has a higher-than-expected number of short-term patients who quickly reach their treatment goals and then are discharged at a cost lower than the Medicare reimbursement. That means the treatment team can bank some extra therapy hours that can be spent on patients who may benefit from more services than anticipated by the Medicare case rate payment.
Therapists like being given the flexibility to spend a little extra time with some patients, and the facility doesn’t lose money over their altruism because of the banked time.
4. Give staff feedback.
Mountainland also gives therapists individual reports that outline how much time they spend per case and how that time compares with the agency’s reimbursement and costs of providing the service. "They see no one else’s data but their own, and they are only competing against themselves," Guss-Hoffelmeyer says. "The system builds in quality indicators as well and is set up to have them compete against themselves for the lowest cost for the highest outcome."
Administrators receive reports showing the facility’s overall performance on quality and profit measures. Those reports give the facility a chance to compare its own performance one month with its performance the next month.
The reports take into account the quality of care and the patients’ level of acuity. That way, a facility that treats more ventilator-dependent quadriplegics, for example, would not be expected to have the same profit level as a facility with no patients requiring services of that intensity. However, each facility is compared with its own performance over previous months, and even facilities that showed a loss of $12,000 one month, for example, might be expected to show a smaller loss of $10,000 the next month.
"This tool is imperative," Guss-Hoffelmeyer says. With it, facility administrators can help decide what types of services to provide and when patients should instead be referred to a skilled nursing facility or transitional care unit instead of receiving rehabilitation.
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