Reimbursement: Surviving Prospective Payment as a
Recreational Therapist
Chapter 19HPR 453
Challenges of Healthcare Increasing challenges and pressures
regarding financing services CTRSs must be competent in financial
management and accountability of their treatment services
Demand for validation of tx effectiveness and efficiency is vital as healthcare $$ become more precious
Windows of Opportunity RT not included as a rehab service in the Social Security Act In 1990s the language the outdated language was simply
updated so access to RT was still limited DRGs in 1994 by American Rehabilitation Association and
1997 Balanced Budget Act prospective payment system (PPS) bundled services for more flexibility
Move from provider-based specific to outcome-driven bundling
Recognizes offering the most effective mix of tx based on medical judgment of client needs
Medical and rehab services must demonstrate effectiveness and efficiency to be viable under the changes
Identification and coding systems have created opportunities for RT
3-hr screening criteria (3-Hour Rule) Partial Hospitalization incremental billing Skilled Nursing (MDS 2.0 then 3.0) Rehab PPS
Measuring value of RT is solely on benefits delivered to patients
Must enhance value of services at reasonable cost
Labor, resources, technology are primary cost components of any service
Lower average salaries under a capitated reimbursement system are a marketing advantage
Durable and nondurable resources are nominal in cost
High-touch, low tech caring profession does not routinely rely on expensive technology for facilitating effective outcomes
Balanced Budget Act of 1997 Goal- Reduce the spending of healthcare $ Mandated reduced federal healthcare $ Tied payment rates to cost in
Skilled nursing Outpatient hospital Home health Comprehensive rehab Specifics on pgs 309-310
Overview of Prospective Payment Payment for med/rehab services at
predetermined price calculated prior to service delivery
Based on statistically determined price or historical costs Price-based system Rates are set in advance Price is inclusive of all services provided No additional payment or settlement will occur Current year’s actual costs do not impact price
established
PPS is based on 4 principles Cost containment – hospitals must closely
manage both revenue and costs Quality – safeguards include audits and
surveys are 2 methods Access – maintain access to medically
necessary healthcare services Beneficiary Centered – based on specific
resident needs based on resources used daily (RUGs)
Price-Based vs. Cost-Based Payment HC facilities no longer establish price for
services Now the buyer arbitrarily sets the price A more balanced system is needed for the
future PPS comes in 2 different designs
Per diem – skilled nursing – how much per day (day to day service cost)
Per episode – hospital and rehab – discharge, admission or diagnosis
Definitions Reimbursement – recovering the costs of
resources used Coverage – Identification and inclusion as
a tx service within terms of a managed care contract/plan
Prospective Payment – payment for tx services at a predetermined price calculated prior to delivery
Retrospective payment – cost is submitted after service delivery
Routine service – services required by all patients – predictable and manageable
Ancillary services – services specific to patient need – differ in scope, duration, and intensity for each patient
Evolution of Payment and Coverage Fee for service
Provider controls price – bartering for services in “old days”
Boom time for hospitals and healthcare Less frequent today – managed care has
replaced to cut costs Implications for RT
Manager must understand system to account for every $
Tx and services must show outcomes
Examples in RT can be found but vary across the country due to lack of knowledge, misinterpretations of guidelines or resistance to change
Discounted Fee for Service Negotiating price-setting process between
provider and payer Can be accomplished as identification of a
provider and assurance of increased business
Implications for RT Must have fee-for-service system in place RT has traditionally lower direct cost so can
maintain a reasonable net margin Using group procedures with reasonable
expectation of improving patient’s condition using a group design
Example – Aquatic Therapy for a school district # of pts, duration of tx, Frequency of tx, school
personnel assistance with pre and post-pool functions, presence of school personnel in pool
Per Diem Daily charge vs. charge per procedure Fee for service is ordering from menu…Per Diem is
eating the buffet Implications for RT
Increased emphasis on interdisciplinary team Coordination to avoid duplication of services Cost-effective mix of tx services Education for inclusion of RT as covered service is
critical for service manager Licensed skilled nursing settings are driven by Medicare
and Medicade per diem reimbursement
Capitated Per Diem Under per diem if you couldn’t charge more per day
then increase the days Capitated per diem maintains daily charge with limit on
number of days Implications for RT
Quicker results to move patient to next level of care are valued
RT examples Medicare partial hospitalization Long-Term care (100 skilled nursing facility days) If RT is employed in these 2 settings, cost assumed
under per diem amount
Prospective Payment of Care Predetermined amount of payment calculated
on historical or statistical costs First occurred with DPGs Expanded version of per diem (per day) to per
episode (acute care stay or comprehensive rehab discharge)
Classifies pts into groups for payment Implications for RT
Expanded access for RT because it is bundled care for rehab svcs – RT is a primary rehab svc
Examples of RT Payment Under FPP leadership of ATRA, the profession
has received special recognition as a qualified service to satisfy 3-hr rule in comprehensive rehab
RT in acute care setting also covered under PPS based on statistical cost for each DPG
Prospective Payment for Continuum of Care Next generation of payment – delivered under a larger
system or network – Cradle to Grave services Assuring svcs through a continuum
PPS Application and Recreational Therapy Across the Spectrum of Care Acute Care Hospital Inpatient – per episode DPG
payment Inpatient Rehb Facilities (IRF) – per episode
payment in case-mix groups made on per discharge basis
Partial Hospitalization – RT is one of several “Activity Therapy” svcs – per diem basis
Outpatient – RT not covered for outpt Medicare at this time based on outdated Soc Sec language
SNFs – RT covered under Medicare Part A – per diem PPS – must be medically necessary and appropriate
Strategies for Success 6 strategies for recognition and coverage
Assure Active Tx – 1.)individualized plan of Tx or diagnosis 2.)reasonable expectation to improve condition 3.)be for diagnostic purposes 4.)supervised periodically 5.)evaluated by a physician
Specific Physician Orders – Key indicator of medical necessity – scope, intensity and duration
Clear distinction between RT and Activities – RT in addition to mandated activity services in LTC – Some RTs provide both but must be distinct regarding the difference
Cost Analysis and Accountability – be knowledgeable about cost and revenue – from annual to 15-min or every minute
Staffing and productivity – personnel costs are primary expense – ratio of staff hours to tx volume – can vary based on organization mission, patient acuity, and complexity
Compliance with Regulatory Mandates – CMS, JC, CARF – Mgr must be aware of applicable state or local health regulations