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Discontent over the Health Care Financing Administration’s (HCFA’s) proposed prospective payment system (PPS) for Medicare is widespread. But there’s one segment of the inpatient rehab industry particularly alarmed over what these changes might entail: rehab facilities with specialty services. At stake are treatment programs for burns, spinal cord injuries (SCI), traumatic brain injuries (TBI), and rare diseases, which may face deep reimbursement cuts under PPS.
The $30,000 proposed PPS reimbursement for burn victims could result in as much as a $60,000 cut on some severe cases, says Bonnie Breit, BS, MHSA, administrative director of rehabilitation services for Crozer Keystone Health System in Upland, PA. "We have tried to demonstrate a standard of care to maximize our obligation to patients and also to the community and industry as a whole," Breit says. "We believe we’re doing the right thing, but with the new structure we may not be able to deliver care in the same manner because of the lower reimbursement." Similar concerns are echoed by rehab providers who work with other high-cost patients.
After studying HCFA’s proposed rule, many say that the cost factors and comorbidities do not add up to adequate reimbursement. "The comorbidities they have identified do not represent our population in either SCI or TBI," says Loretta McLaughlin, CPA, MBA, chief operating officer for Magee Rehabilitation Hospital in Philadelphia. The 96-bed hospital is a founding member of the Jefferson Health System.
Some essential comorbidities are not addressed in the proposed rule, McLaughlin says. For example, if a patient who has had a stroke is admitted with a high blood glucose levels that previously were controlled by diet alone, that would not be recognized as a comorbidity because the patient was not insulin-dependent pre-trauma. However, it’s often more difficult to control glucose levels with stroke patients because of their limitations in swallowing and diet.
"My costs of trying to get the patient’s blood sugar under control increase significantly, and that is not recognized as a complication of the stroke," McLaughlin explains.
Not all rehab facilities have completed financial projections of what PPS would mean to their reimbursement, but some of those who have are not pleased with their findings. The Charleston (WV) Area Medical Center completed a financial analysis on its patients between Oct. 1, 1999, and Sept. 30, 2000, and found that it will fare worse under PPS, says Peter Americo, MS, CCC, SP, director of rehab.
"It’s not going to be revenue-neutral for us," Americo says. "The impression we were given was that it would be revenue-neutral, and those that treated people with severe impairments would be treated relatively well," Americo adds. "Well we do that; we have excellent outcomes, and all the benchmarking we do shows we’re doing an excellent job, but the data I’m seeing doesn’t reimburse us well."
Even when comorbidities are factored into the analysis, the center doesn’t receive adequate reimbursement, Americo says. "We looked at every one of our Medicare patients we saw in that period and applied the formula in the Federal Register, dated Nov. 4, and based on that analysis, which is a fairly intense analysis, we do not see that as a revenue-neutral program."
The center has a high number of stroke, TBI, SCI, and multi-system trauma patients. Despite the high percentage of high-intensity patients, the center has a length of stay that is about four days better than benchmark averages, Americo adds. "We’re sending in excess of 90% of patients home even in severely impaired categories," he says. "So we are convinced our quality is high, and we have a low return to acute care."
Although the Roger C. Peace Rehabilitation Hospital in Greenville, SC, has not yet conducted a financial analysis of the proposed rule, a first look at the PPS report suggests the hospital’s traumatic brain injury program could suffer from reduced reimbursement, says Sheldon Herring, PhD, clinical director of traumatic brain injury program. The hospital is part of the Greenville Hospital System. "With brain injury, if you have comorbidity, it does not result in increased payment, whereas for many case mix groups, an identified comorbidity results in about a 10% increase in reimbursement," Herring says.
"HCFA’s assumption is that the severity of brain injury will account for more variability in outcomes and costs than will any comorbidities, and that’s something we’ll have to see whether it’s true in the field," he adds. "I think we’re going to find that comorbidities are more of an issue for select sub-populations of TBI patients, but we don’t have the data to predict who those will be right now."
Another concern is how rehab facilities will discharge TBI or SCI patients who live in rural areas that do not have adequate alternatives to inpatient rehab care, Herring says. "It’s not uncommon for a patient’s length of stay to be extended many weeks or months based on difficulties, and outlier reimbursements are not sufficient to pick up that cost," Herring says. "In the more rural areas, the discharge alternatives for these folks are reduced, and anytime that’s reduced the length of stay will go up, and we don’t feel like the outlier process is going to help cover that cost real well."
If HCFA goes ahead with the rule as proposed, it’s possible rehab hospitals like Roger C. Peace will have to more closely monitor its admissions, giving first priority to patients who come from within the immediate Greenville area, Herring says.
When patients suffering catastrophic injuries live in rural areas that lack adequate rehab options they often are discharged home without receiving any rehabilitation. "This new emphasis on a funding model is going to cast a brighter light on the continuum-of-care gaps that exist in some of the rural states," Herring adds.
The Children’s Institute of Pittsburgh has a small but very important population of adult patients who receive Medicare, and this group could see their reimbursement severely cut under the proposed plan, says Charles Schuessler, chief financial officer of the freestanding rehab facility, which specializes in treating children and about 60 to 75 adults a year who have Prader-Willi Syndrome.
"Prader-Willi Syndrome is a chromosomal disorder that manifests itself with extreme eating aberrations," Schuessler explains. "Patients eat anything and are very obese with low muscle tone and mild developmental delays and behavioral problems."
Those suffering from the disorder have relentless hunger, incomplete sexual development, short stature, and often do not live long into adulthood. About half of the adults treated by the institute receive Medicare coverage because of their disability. The problem is that these adults do not fit into any Medicare category that is proposed under PPS, Schuessler says. "In the past, we had cost reimbursement."
As one of the only providers treating this condition, The Children’s Institute receives many of the most severe cases. "By the time they arrive here they are in a very extreme, life-threatening state in many cases," Schuessler says. The institute’s program typically results in a 60-day length of stay in which the adult patients are treated with a program that focuses on weight loss, managing behavior problems, controlling eating, and improving motor skills and muscle tone.
The cost averages $45,000 per case, Schuessler says. "If we get paid fairly well [by Medicare PPS], we’ll still lose $25,000 per case, over half of our costs."
Treatment entails a regimented diet combined with therapy and round-the-clock supervision. A core team includes a psychiatrist, physician, psychologist, occupational therapist, physical therapist, speech therapist, and dietitians who specialize in this syndrome. The patients’ hunger is so extreme that they often exhibit behavioral problems, and the rehab facility works with them on controlling these.
The facility also helps the patient manage and control comorbidities associated with obesity, such as diabetes and heart disease. A 60-day stay is necessary for the patient to achieve a maximum weight loss and reconditioning. Without these outcomes, the patient’s life-expectancy would be lower. In previous decades, children who had this disease rarely lived until adulthood, Schuessler notes.
"Our board supports our mission even though we’ll lose money, but we would have to think about how far we could go," Schuessler says. "I think this at best would be looking at losses of one-half million dollars a year, just from Medicare patients."
The rehab institute has asked HCFA to carve out a niche category, providing adequate reimbursement, that would apply to these types of patients, Schuessler says. "I don’t know what the possibility is of that happening."
Rehab facilities should keep in mind that HCFA and the RAND Corp., which helped to develop the proposed PPS, are continuing to look at these areas of concern and may come up with solutions before a final rule is published, suggests Richard Linn, PhD, director of the Uniform Data System for Medical Rehabilitation and the Center for Functional Assessment Research in Buffalo, NY.
Researchers with RAND are trying to do a good job to make sure the payment system is fair, Linn says. However, as the rule is now written, rehab providers with very specific programs may not weather the PPS storm very well, Linn adds. "They’ll do either very well or very poorly."