Make case management profitable in OH medicine
Reader Question
Make case management profitable in OH medicine
Question: How can we make case management services profitable in our for-profit occupational health program? It’s not feasible to just provide the service without expecting it to generate revenue, but how do you go about that?
Answer: Billing for case management in occupational health always has been a challenge, and it appears to be getting even more difficult. Most providers with some experience in the area say you should not count on making any real money from case management. However, there are a few steps you can take to increase your chances.
Some of that frustration with occupational health case management was expressed by the staff of Occupational Health in Pottstown, PA, affiliated with Pottstown Memorial Medical, in an article in the July 1996 issue of Occupational Health Management.
At that time, program director Julie McClellan, RN, said her efforts to bill for case management services were discouraging. The rate of reimbursement was low, sometimes so low that she wondered if it justified the effort put into the billing process.
Much of the problem stemmed from the fact that "case management" in occupational health involves services that the occupational health program traditionally has provided without charging a separate fee, such as communicating with employers and providing detailed reports on the employee’s care. Insurers usually were reluctant to pay separately for those services when billed for case management, and Pottstown received reimbursement for only about 20% of the case management claims it filed.
At the same time, Ray Breswick, general manager of WorkHealth at Frankfurt Hospital in Philadelphia, told Occupational Health Management that he was having similar difficulties. He began billing in 1993 for case management services, at a fee of $50 per month. At first, he received an 80% "customary and usual" reimbursement for about 75% of the requests, amounting to revenue of $35,000 a year.
Now, 2½ years later, McClellan and Breswick both report that they have discontinued all efforts to bill for case management services. McClellan says the minimal revenue from case management did not offset the expense of having a nurse do the case management and billing. The nurse would spend most of the day on the phone for the billing process.
"We also felt that case management really was part of our occupational health service," she says. "We weren’t getting paid anyway."
However, it was important that the program continue to provide the services that had been unsuccessfully billed. Without the case management nurse dedicated to the tasks, many of the functions were handed over to a nurse practitioner who communicated closely with employers as needed.
Reimbursement shrinks until not worthwhile
Breswick reports a similar result. Because of recent changes in Pennsylvania workers’ compensation laws, occupational health billing is now subject to Medicare fee schedules that make it extremely difficult to bill for the type of case management services found in occupational health. By the time Breswick ended the billing for case management, the revenue from it had trickled to less than $20,000 per year — not a huge loss for his program, but also a substantial amount of lost money for a service that still has to be provided.
"We basically just provide case management and don’t charge for it anymore," Breswick explains. "It got to the point that nobody was paying for it anymore, so it just wasn’t worth the effort. Now we consider it just part of the cost of doing business."
There are separate case management companies that can bill for occupational health-related services, but that is different from an occupational health provider trying to bill for it. The problem is that insurers, and many others, often consider case management to be an intrinsic component of any occupational health service and therefore not reimbursable, says Mike Grosh, president of SPAN Corp., an occupational health consulting firm in Ann Arbor, MI.
"Most people do have real trouble selling this," Grosh says. There is a natural suspicion of that kind of self-referral concept."
What services are you billing?
Grosh advocates billing for case management services, but not in the way that some programs have tried and failed. Some programs have tried to generate revenue by billing for the telephone calls and written reports to the employer, for instance, but Grosh says it is hard to call that real case management. Insurers see through that ploy right away, he says.
"I would characterize that as intrinsic to the service, and so would the people you’re billing," Grosh says. "If you’re billing for that, you have to make a pretty strong argument for that being extraordinary service requiring additional billing. That will be hard because most occupational health programs sell themselves as a program that provides those services as the very nature of occupational health, not something separate with another fee."
But if you are providing true case management services, Grosh says you absolutely should bill for it and expect reimbursement. (For his advice on how to successfully bill for occupational health case management, see story, p. 149.)
Sources
For more information on billing for case management services, contact:
• Ray Breswick, General Manager, WorkHealth, 5000 Frankfurt Ave., Philadelphia, PA 19124. Telephone: (215) 831-2211.
• Mike Grosh, President, SPAN Corp., 2621 Carpenter Road, Ann Arbor, MI 48108. Telephone: (734) 973-7717. Fax: (734) 769-6268. E-mail: [email protected]. World Wide Web: http://www.spancorp.com.
• Julie McClellan, RN, Program Director, Occupational Health, 81 Robinson St., Pottstown, PA 19464. Telephone: (610) 326-2300.
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