Using the episode-of-care approach to billing
Using the episode-of-care approach to billing
Tom Pedersen, a consultant with Phoenix HealthCare in Redondo Beach, CA, and Mitch Fillhaber, vice president of marketing and managed care at the Shepherd Center in Atlanta, offer these tips for rehab units interested in the episode-of-care approach:
• Know your costs and your experience in the area in question. "Know your business inside and out, including what it costs to perform each procedure, what ancillary support or procedures are typically required, and what your rehab time and costs are," Pedersen says. This can be determined by looking at historical information your hospital has that lists every service provided for a particular procedure, and what each procedure costs.
• Ensure you have a quality information system to track costs and performance. This should include a relational database which will be able, with appropriately trained staff, to generate accurate and meaningful reports showing utilization of services, costs, and net income, Pedersen says.
• Choose high-volume diagnoses for these types of agreements. "If you’re a general rehab hospital, you probably wouldn’t want to do (episode of care) for a patient population if it’s less than 10% of admissions. Pick high-frequency diagnoses that you’ve mastered care paths for and have a clear understanding of costs," Fillhaber says. If your community has several hospitals with strong rehab units, your hospital can gain a competitive advantage by offering a different type of pricing structure, he adds.
• Pick your partners carefully. It’s necessary to have a strong contractual relationship with either a multi-specialty independent practice association or a hospital PHO in order to get a good handle on costs of care delivered outside the hospital, Fillhaber says. "Identify physicians who have practice patterns that meet the financial viability of your model. It’s really no different from what a hospital would do to profile its medical staff and get costs under control."
• Have a strong case management component, preferably in-house. Good case managers track any variances from a standard care plan or costs, and inform the administrator or other accountable parties if there are deviations.
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