July 11, 2011

Billy's World: Healthcare Providers: Victims of an Environment They Cannot Control

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That’s not a particularly shocking statement; most of you probably agree. But let’s consider one small example of what it means.

Have you ever noticed how every time someone comes up with some change in payment systems, coding systems, cost containment systems or whatever, consultants (me, for example) seem to come out of the woodwork?

 

Join me as we travel back to 1982: Medicare has been humming along for some 17 years, and HCFA (that’s “Old CMS” for you younger readers) has announced the launch of a new acute inpatient case payment system called “IPPS” based on something called “DRGs.” Almost immediately, every decent-sized accounting firm, healthcare software firm and consulting firm in the country is beating down the doors of hospitals from coast to coast to help them make the transition to DRGs. Never mind that almost no one had any idea what a DRG was a year or so before – or that almost no one had any experience with them – but all of these third parties told us they had all the answers.

Regrettably, it all boiled down to three suggestions:

Shorten lengths of stay;

Start up SNF, rehab, psych and LTCH units, because they still are paid “per diem;” and

Cut costs any way you can, because you’re going to get the same payment for a given DRG no matter what your costs are.

Yes, we heard all the advice, and in the short term it was actually good advice. I was a CFO at the time, and we did all three of those things. But what happened?

A year or so later, Medicare published the first Outpatient Surgery 100 list, representing 100 relatively low-cost, short-stay surgical procedures that no longer were reimbursable when performed on inpatients.

About the same time, HCFA started a 10-year transition to make capital costs part of the DRG payment too! Never mind if you just had built a new facility or purchased one of those new-fangled CAT scanners.

In 1998, our friends in Washington, D. C. created “post-acute care transfers,” meaning you would be short-paid even on some of your discharges to those special units you created 15 years earlier.

And in the first decade of the 21st century, HCFA/CMS converted SNF, LTCH, rehab, psych, outpatient services, ESRD, and ASC to “prospective payment” systems, pretty much neutralizing all those great program ideas the experts-for-hire gave us.

Now we are in the middle of the 5010-D0 conversion (which is supposed to become law in only six months and two days), and we just embarked on a two-year cruise on the “Good Ship ICD-10.”

Have the experts come out of the woodwork in your community? I’m sure they have, once again.

As you work with one or more of us experts – and you really should –just keep that DRG history in mind, and always take what they tell you with a good dose of skepticism.

This is my opinion, and mine alone.

About the Author

Billy K. Richburg, M.S., FHFMA is HFMA-Certified in Accounting and Finance, Patient Accounting and Managed Care. Bill graduated from the U. of Alaska, Anchorage and earned his M.S. in Health Care Administration from Trinity University, San Antonio, TX. Over a career spanning more than 40 years, Bill has held positions including CEO, COO, CFO, and CIO in hospitals ranging from 75 beds to over 300 beds, and in home health agencies, DME stores, and a home infusion company. Bill is a Board Member of the Lone Star Chapter, HFMA, and is Director of Government Programs for the Revenue Cycle Technologies business segment of MedAssets, Inc. His office is in Plano, Texas.

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Read 56 times Updated on September 23, 2013
Billy Richburg, M.S., FHFMA

Billy K. Richburg, MS, FHFMA is HFMA-Certified in Accounting and Finance, Patient Accounting and Managed Care. Bill graduated from the University of Alaska, Anchorage and earned his MS in Health Care Administration from Trinity University, San Antonio, Tex. Over a career spanning more than 40 years, Bill has held positions including CEO, COO, CFO, and CIO in hospitals ranging from 75 beds to over 300 beds, and in home health agencies, DME stores, and a home infusion company. Bill is a Board Member of the Lone Star Chapter, HFMA, and is Senior Director of Government Programs for the Revenue Cycle Technologies business segment of MedAssets, Inc. His office is in Plano, Texas.