|
|
Development Rationale Elements |
Lexicon Resources FAQ Miscellaneous |
|
| How to Establish a Palliative Care Program | ||||
 |
||||
Financing Community HospitalsSelect:
Community hospitals receive patient care revenue from a variety of sources. Overall hospital revenue reflects the payer mix from these potential sources and the hospital's case mix. Some funders (eg, Medicare and Medicaid) vary their reimbursement rates regionally to account for the actual average cost of doing care within the given region (mostly related to the cost of labor). There are only modest differences in the reimbursements that hospitals in urban versus rural settings receive. Commercial indemnity insurance pays the fees charged by the hospital no matter where the hospital is located. Managed care pays based on its negotiated contracts. Medicare The DRG payment is determined in the following way. After the patient is discharged, the patient's chart is abstracted for coding. The hospital determines the DRG code that best fits the chart. If a patient is in the hospital much longer than the usual range of days for that DRG, the hospital may code for an outlier status. Since the hospital receives a single amount of money for a given hospitalization, it should be obvious that a hospital is not financially rewarded for keeping patients for longer stays, or engendering higher costs. Hospitals report their charges and cost: charge ratios to HCFA on a regular basis. An individual hospital may receive adjustments to their DRG fee structure based on the overall number of Medicare patients they care for (disproportionate share adjustments). There is no DRG for palliative care. There is an ICD-9-CM diagnosis code for palliative care
that carries no reimbursement. The code was instituted as a research tool to help identify
services in hospitals which included palliative care. (Cassel CK, Vladeck BC. ICD-9 code for
palliative or terminal care. NEJM1996;335:1232-4. Unfortunately, because there was no
reimbursement associated with it, few hospitals used the code. Little useful information was
obtained.
Medicaid Most states administer their Medicaid programs like Medicare. Most pay hospitals using the
DRG system, although there are state-by-state variations. It is beyond the scope of this manual
to discuss each state's program. In general, the payments to hospitals are lower than the
rates that Medicare pays.
Commercial Insurers Fee-for-service indemnity hospitalization insurance plans are becoming more rare. However, there is marked variation around the country. Indemnity insurance is much more common in the midwest and south. In general, fee-for-service insurance pays the hospital the most money for a given set of
services. It does not discount the fee before paying it.
Managed Care
Discounted Fee for Service The hospital receives a percentage of its usual fees. The percentage for an individual contract is confidential, but ranges from 30-80% of the hospital's usual charges. Discount fee-for-service rewards the hospital for accumulating as many fees as possible for an individual patient. The managed care company counters this by reserving the right to determine whether the services are medically necessary and/or which services are covered. Negotiated Perdiem The hospital receives a negotiated rate per patient per day. The amount is confidential, but ranges from $600 to $1500 per day for general inpatient care. Haggling over individual charges is eliminated. The hospital is rewarded for using only appropriate services. The managed care company counters by determining whether the patient meets their criteria for medically necessary hospital days. Under this arrangement, managed care wants to decrease length-of-stay. The financial incentive is to increase length-of-stay. Capitation
The hospital receives a negotiated amount per patient enrolled in the health care plan per month.
The hospital agrees to assume the risk of potential costs of the care of the patient in exchange
for a predictable revenue stream whether or not those services are used. Under this system, the
hospital is rewarded for using only the most appropriate services.
Government (Veterans Affairs, Active Duty Military) These government hospitals are funded under global budgets. Hospitals do not receive per patient payments. However, their overall budgets are determined by overall volume of patients and overall costs. Next, consider the financing of academic hospitals. CAPC Resources:
|
|
Elements |
|||||||||||||||||||||||||
