Case Rate Financing How To Provide Quality Services, Survive, And Even Prosper

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• Case Rate Financing How To Provide Quality
  Services, Survive, And Even Prosper
• Orlando, Florida
• August 15, 2006
• Arthur Schut Lucia Maxwell

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(No Transcript)
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• Structure of the Presentation
• Introduction
• Context National Trends and Florida
• Rate setting process Purchaser issues
• Internal provider organization preparation and
  changes
• Individual agency focus what are we going to
  do?

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• INTRODUCTION
• Who, position with what organization, service
  mix, payer mix
• Key issues for Florida providers
• Trends Marketplace Influences
• Strategic direction

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• Recovery model acute v chronic (and/or)
• How you get paid makes a difference
• What to do now? You dont need to know the
  payment system.

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• Overview of Case Rate Issues
• PROS
• Allows providers to define treatment plans
  without interference from managed care arbitrary
  limits or unit billing.
• Reduces unproductive time spent justifying
  treatment plans and continuing stay to external
  care managers.
• Case rates change practice patterns

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• Overview of Case Rate Issues
• PROS
• Payments are certain so providers can more easily
  plan for financial outcomes.
• Back office billing costs can be reduced because
  of simplified billing procedures.
• Payer administrative costs can be dramatically
  reduced, which in theory should make more revenue
  available to providers to provide additional
  services. 

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• Overview of Case Rate Issues
• CONS
• The assumption that the population is homogenous
  with respect to the treatment they need, can be
  financially devastating to individual or groups
  of providers.
• There is a natural conflict between determining
  the appropriate length of care and revenue
  available to provide it. 

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• Fixed Rate Issues
• CONS
• By financial necessity the focus of treatment may
  be influenced more by the available revenue than
  the presenting problem. 
• Financial managers and planners in actuality may
  have more influence over treatment regimens than
  clinical practitioners.

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• Fixed Rate Issues
• CONS
• If case rate contracts have complicated
  provisions, such as warranty periods, minimum
  lengths of stay, evaluation periods or guaranteed
  outcomes, back office billing costs and software
  development costs will rise.
• Innovation in new treatment solutions which may
  have high start-up costs are necessarily stymied
  by financial restraints. 

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• Fixed Rate Issues
• CONS
• Case rates change practice patterns

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• NATIONAL TRENDS
• What is happening in Florida is NOT unique, and
  IS unique just because it is Florida
• CBO developmental history most started by
  consumers
• Mission and Values important
• Commitment to all, regardless of ability to pay
• Consumer managed entrepreneurial not-for-profits
  profits to indigent services

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• NATIONAL TRENDS
• Diversity of patient population
• Our broad strategic direction - where we are in
  relation to where The Field is going
• Recovery model of treatment targeted at chronic
  illness at one time funded as that, now largely
  funded as an acute care illness

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• NATIONAL TRENDS
• Practice Improvement and/or Buying Outcomes (an
  overview)
• IOM Bridging the Gap
• CSAT - National Treatment Plan
• Crossing the Quality Chasm
• Evidence Based Practices - examples
• Motivational Enhancement/Interviewing
• Cognitive Behavioral approaches
• Matrix model
• TCU
• Medications

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• NATIONAL TRENDS
• Purchasing Levers State and other purchasers
• National Quality Forum (NQF) national EBP
  standards
• ATTCs Technology Transfer
• Practice Improvement Collaboratives (PIC)
• NIDA Clinical Trials Network
• NIAAA Researcher in Residence

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• NATIONAL TRENDS
• Consortia for Drug Alcohol Research and
  Evaluation
• NIATx- process improvement
• Federal Block Grant requirements to states
• NOMs (National Outcome Measures)
• Pay for performance what kind?

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• NATIONAL TRENDS
• Treatment Outcomes
• Positive outcomes are related to access
  engagement retention, length of stay or duration
  of contact (engagement)
• Dose appropriate treatment
• Use of EBP (Evidence Based Practices)
• Very little research of existing or traditional
  methods of treatment

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• NATIONAL TRENDS
• Treatment Issues
• Treatment environment Therapeutic vs. discipline
  based
• Chronic illness vs. acute recovery vs. acute
  Are case rates structured as acute and/or chronic
  recovery model? Or both?
• Attempt to grow implementation of evidence base
  practices

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• NATIONAL TRENDS
• Marketplace Influences
• Private payer market For-Profit Payers
  largely short-term health view
• Criminalization of addiction
• Criminal behavior or disorder or both
• Continuing Discrimination (Stigma)
• Co-O MH SUD Behavioral Health
• Co-O SUD and multiple problems

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• NATIONAL TRENDS
• Marketplace Influences
• Significant relationship to Primary Care systems
• Transformation/demise of Neighborhood Grocery
  store Corner Drug store full service gas station

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• NATIONAL TRENDS
• Marketplace Influences
• HIPAA electronic billing accountability
  requirements electronic communication
• Sarbanes-Oxley
• Systems and Networks health systems, Child
  Welfare Consolidation
• A dearth of attention to cost benefit - cost off
  sets

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• NATIONAL TRENDS
• Marketplace Influences
• Bankruptcies of small not-for-profits cash flow
  solvency sustainability
• No money no mission
• Predictions that Substance Use Disorders (SUD)
  Specialty Providers will cease to exist, or be
  substantially changed. Implications?!

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• There has been the application of similar
  financial management approaches, targeted at
  controlling costs, to both over-funded, bloated
  delivery systems and under-funded, under
  resourced delivery systems

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• There is always a well-known solution to every
  human problem neat, plausible and wrong. HL
  Mencken, Prejudices Second Series, 1920

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Issues Facing Purchasers in Rate Setting
-Considerations for Florida

• The more you understand what is driving the
  purchasers decision making, the better
  negotiator or participant in the process you can
  be. FADAA goal educate providers, support
  participation in process.

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Purchaser issues

• Possible goals for establishing prepaid reduce
  costs, improve quality, increase access (In
  Florida, no goal to reduce costs)
• Rate setting is only as good as the data

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• Valid and reliable data is a real challenge for
  public systems (States) trial and error
• no unique client identifier
• costs are in different systems Medicaid, DOC,
  JJ, local
• inability to associate clinical and financial
  data to measure cost variations by- client
  demographics (e.g. age, pregnant, pp women) -
  severity (co-occurring, history of readmissions)
• IS changes hinder multi-year analysis.

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Planning Process Prior to Setting Rates

• For public purchasers, need analysis that will
  stand up to external scrutiny
• Need to model the interventions that work, but
  impact of outliers
• Need to define and un-bundle services impact of
  regional and agency variations in standards of
  care/ methods of service delivery, factor in
  supportive and ancillary services

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Rate model choices

• by service
• by partial or complete episode of care (move from
  one level to another)
• by population sub sets (e.g. child welfare,
  pregnant women)- if too complicated, may be too
  cumbersome to implement
• separate rate for administrative services

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Payment System Choices

• Partial payment (e.g. first 5 encounters)
• Authorization required to extend stay
• Impose required outcomes (e.g. client functioning
  by key indicators, lower level of care at
  readmission)
• Offer financial or other incentives bonus for
  success
• Penalties for poor performance

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Additional considerations

• Unintended consequences of poorly conceived rate
  system - purchaser (public) pays too much-
  contactor controls access or withholds care-
  service system starved, unable to accumulate
  for system improvements
• Importance of not overestimating volume (e.g.
  Tennessee)
• Assume savings from efficiencies?- lower rate or
  require reinvestment

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• Considerations for Florida
• State says goal is to improve quality and
  efficiency, thereby increasing access
• No covered benefit tighten eligibility (define
  as close to current pattern as possible) but
  retain flexibility
• Share risk state/ local partnership
• Inadequacies of data system, recent conversion

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• Considerations for Florida
• OPPAGA report recommendations eligibility,
  analyze costs by severity, coordination with
  Medicaid, provider networks first, ensure
  continuum
• Need for standardization of assessment, service
  codes
• Enrollment process?
• Impact on provider revenue of ending cost shifting

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• Considerations for Florida
• Role of provider networks contract for funds?
  assign or monitor clients? measure outcomes?
  
• Community perceptions will need to change many
  providers mission driven, regard community as
  client
• Political climate - Legislature and
  privatization, Medicaid reform-
  self-directed care- Change in administration,
  pressure for early results- Budgeting for IT
  and finance system conversion- Impact on
  Managing Entity policies?

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• Considerations for Florida
• DCF lack of experience with Medicaid
• MH dominance of the conversation
• Co-occurring, interface with MH

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• Update on DCF Analysis
• Activities preliminary to choosing a methodology
  - what does a successful outcome look like?-
  by modality, seeking average participation and
  average LOS for a successful completer
• Analyzing 2003-2004 data
• Analysis of DCF funding of services to Medicaid
  clients

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• Update on DCF Analysis
• Status of DCF consideration of methadone case
  rate (1800 - 2400)
• Timetable, next steps, key decision points?
• Need legislative change to do DCF eligibility and
  enrollment?

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• Provider Key Issues
• Need transparent process at all phases of
  analysis and rate setting
• Early provider participation, formal mechanism?
• Possibility of pilot for individual data to
  confirm aggregate costs analysis?
• State commitment to early evaluation and
  readjustment
• Need to identify State policies to prepare for
  risk transfer (e.g. ability to accumulate
  reserves)

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• Case Rate Issues for Individual Providers
• Negotiating case rates Being bigger looking
  bigger MBMS or FADAA type or other umbrella
  negotiating coalition partners of unequal size
  profit and not-for-profit
• Payment methods advance, monthly capitation,
  performance withholds and/or incentives,
  reimbursement delays (penalties to the payer for
  that?), electronic vs. check-is-in-the-mail

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• Case Rate Issues for Individual Providers
• Incentives and disincentives for performance
  What performance? Defined how by whom?
• Performance withholds and other permanent
  reductions in income.

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• Rate Setting Process Purchaser Issues
• What is the case rate buying?
• Episode of care? All care for a year? One
  admission? One modality? One provider? Multiple
  providers? All inclusive? (physician? drugs?
  excludes housing?) Minimum Length of Stay?
  Guaranteed or Warranteed Outcome?
• Structure of case rate sub-cap with minimum
  client number, case fee for service, fee for
  service with authorization for outliers,
  pre-authorizations required? Warrantee Period?

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• Case Rate Issues for Individual Providers
• Degree of risk or ability to manage risk wait
  list permitted? Minimum length of stay required?
• Off-setting provider savings elimination of
  pre-authorization calls or continuing stay
  reviews can case rate be a replacement for
  managed care? Manage own care for shared risk?

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• Provider Internal Preparation
• What am I going to do if case rate financing
  starts tomorrow?
• What am I going to do if I cant bill units
  tomorrow?
• Planning for case rates start now small pilot
  projects parallel simulation of case rates
  along side unit rate reimbursement systems

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• Provider Internal Preparation
• Sophistication necessary?
• Providers
• Networks
• Service delivery
• Integrated

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• Clinical, financial, administrative, and
  information systems changes required to move from
  unit rate to case rate reimbursement
• Clinical, Finance, Information Systems,
  administrative aspects of an organization are all
  intertwined
• Change Process needs to acknowledge and engage
  these organizational aspects

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• Essentials
• Tracking key indicators
• Manually initially (pilot)
• Manually if necessary to continue

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• Essentials
• Productivity by clinician and/or unit -- in terms
  of ALOS, fees collected (prefer clients current
  with payment plan), shows, direct service
• Payer Mix diversity
• Client pay co-pays sliding fee income --
  collection rate
• Uniform Screening criteria
• Continuing stay criteria and reviews dosing of
  treatment

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• Essentials
• EBPs including Stages of Change Client
  engagement
• Managing access to care wait lists
• Managing shows vs. no shows, cancels,
  re-schedules
• Managing engagement and retention
• Length of Stay by type and/or modality of care
• Outcomes

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• Billing creativity (always with the knowledge
  and participation of the payer) - IOP with a
  bed, day treatment with a bed, without a bed,
  etc residential as individual and group hours
  IOP (Intensive Outpatient) as per diem.
• Engaging staff in change
• Clinical Staff
• Administrative/Support Staff
• Management

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• Information systems, claims processing,
  authorizations, recovery focus, organizational
  structures, and available resources
• All integrated conceptually consistent
• Focus on recovery
• Individualized at least NOT one size fits all
• Manage risk at client care level by what is
  appropriate EBP client care not via
  management then integrate management

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• Clarity regarding least restrictive level of care
  ASAM criteria
• Continuous assessment step-down, step-up
• Mechanisms to provide timely and usable
  information to service delivery staff
• Service delivery staff need mechanisms to make
  timely reports of information

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• Need to be able to attribute costs to services in
  some consistent way that does not silo the
  expense.
• There are activities for which it may be worth
  losing money e.g., keeping your own gate.
• Consistency and Fidelity mechanisms e.g.,
  Internal website for forms, procedures, etc QI
  activities, internal audits and monitoring

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• Creative ways to extend care, bundle and unbundle
  care, enhance care one continuum could be
• Free-standing inpatient
• Extended Residential care
• Care with drug-free housing
• Transitional care - Half-way, apartments, etc.
• HUD or private sector housing w/ case management
  and/or fee for service delivery

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• IA Women Children only get case management if
  also receiving DPH or T-XIX care mixed case
  rate and fee for service or double case rate
  payment system
• Co-Occurring clients have a unique Case rate to
  provide case management supplemental to Medicaid
  services

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• Systems for assessment, service planning,
  Inter-agency coordination for an episode of care
  reimbursed by case rate.
• Depends upon service delivery system(s) between
  organizations, or within organizations, or
  umbrella, or two, or all.
• Involvement of an ASO?
• Within organizations (or modalities sometimes
  between modalities in the same organization can
  feel like between organizations)

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• Case management and inter-agency coordination
  will be necessary if the state chooses to
  reimburse for an "episode of care" (e.g., detox
  to IOP, or residential to outpatient to
  continuing care)
• Case Managers/Clinician regular staffings
  (weekly?) joint planning -- transfers
• Directors/administrator Meetings

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• Data collection across organizations
• Sharing of data between all partner agencies
  publication of ALOS, client numbers, range of
  LOS, outcomes
• Clear agreement regarding how to attribute the
  case rate to what activities by which provider.

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• Central Assessment Uniform Screening based upon
  ASAM acceptance of the uniform screen by all
  providers
• Umbrella organization which then pays
• Networks formal/informal
• Inter-agency vs. Intra-agency coordination
• Intra-agency coordination internal website

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• Smart Design Essential
• Developmental change partnerships between payers,
  providers, regulators (e.g., NIATx at a
  state-wide level)
• Pilots of innovative approaches (MCO or State
  reinvestment ) pilot generates data for
  establishment of case rate.
• Pilot of SA screen for MH providers (TCU-Drug
  Screen) MH screen for SA providers (Mini Mini)
  gambling screen (SOGS)

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• Smart Design Essential
• Many data systems, used for planning, produce
  data that are of dubious fidelity largely due
  to design.
• Vigilance for unintended consequences

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• Smart Design Essential
• Design process to discover unintended
  consequences prior to full implementation
• Provider communication of unintended consequences
  is not necessarily resistance
• How it looks from there is not how it looks
  from here.

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• Financial risk and the importance of tracking
  costs and income in a case rate reimbursement
  system
• How cost is attributed is important.
• Danger in creating silos of cost income.
• Detox residential in the same unit different
  case rates. How to allocate nurses who work in
  both residential and detox? Detox, Medical care
  for residential, insurance payments for 3.7

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• Tracking costs vs. tracking appropriate care
• Clinician awareness of costs??
• Manage the money or manage the patient and attend
  to the money
• Clinician awareness of client payment source
• Sliding fee vs. financial aid/assistance
• Client fee payment as part of treatment
  completion standards

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• e-Wait List tracking by bed x facility x level
  of care x gender x payment (looks like future
  census)
• e-Census tracking -- x facility/modality x level
  of care x payment x primary counselor x legal
  status (PO, CO, PTR, etc.), projected discharge
  date, admit date, recert date, date of last
  staffing (ASAM)

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• Centralized e-Census set discharge date at
  admission (wait list intake staff initially
  enters projected date) regular staffing
  decrease or increase date based upon client need.
  Feeds to available bed info for Centralized
  e-wait list.
• Financial census outstanding balance, current
  payment
• Items remind clinicians of key tasks recerts
  ASAM reviews

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• Slots
• Residential census tracking placement by
  slots public or private
• Payer mix
• Client mix
• Percent limits by category of client (e.g.,Civil
  committals no more than 25)
• Gender
• Flex beds by modality primary residential,
  halfway, detox
• Detox only to whom?
• Detox included for residential admits

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• Centralized appointment calendar covering for
  client appointments regardless of availability of
  specific counselor (agency vs. group private
  practice model)
• Technology enhancements for better utilization --
  Laptop or desktop in staffing modify dates or
  other census info during discussion of clients

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• Track unit costs to construct case rates
• Pilots Co-O outpatient case rate
• Detox case rate
• Woman and Children wrap around
• Case rates require integrated management of
  services
• Cash flow makes for happy CFOs how when you
  are paid is important.

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• Case rate reimbursement can increase client
  satisfaction, and encourage creative treatment
  approaches
• Issues
• One size fits all vs. standardized treatments
• Case rates change practice patterns
• Managed care needs to occur internally within an
  agency whether or not it occurs externally

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• Methods of authorization (pre continuing stays)
  phone, fax, retrospective review
• Can swap reduction in external management for a
  case rate? cost off-set advantages
• Teams of clinical, finance, IS, admin, support
  including line staff and customer input Can
  use NIATx Change process to reduce duplication
  redundancy

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• Ask the customer
• Be a customer

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• NIATx Change process (see, www.NIATx.org)
• 1. Understand and involve the customer
• 2. Fix key problems (and let the CEO sleep at
  night)
• 3. Pick a powerful change leader
• 4. Get ideas from outside the organization/field
• 5. Use rapid-cycle testing

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• www.NIATx.org
• Pilot test all changes with clients to make sure
  they really are an improvement and that they make
  things better for the staff, not worse.
• Do not implement changes until you know they
  work. This process often requires several tries
  or cycles before all the bugs or errors are
  resolved.
• As an integrating device for tying the last two
  principles together, NIATx highly recommends
  using the Model for Improvement by Langley,
  Nolan, et al. It is both simple and flexible.

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Reference Langley, Nolan, Nolan, Norman,
Provost. The Improvement Guide, San Francisco,
Jossey-Bass Publishers, 1996. (Source
www.NIATx.org)
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• INDIVIDUAL AGENCY FOCUS
• How will things change if I cant bill units next
  week?
• What do now?
• What need to do?
• What drives the process?
• Manage the money?
• Manage the care and attend to the money?
• Who knows what about the money? (Clinicians?
  Administrative staff? Finance folks?)
• Who creates income?
• Who creates expense?

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• Planning for case rates start now small pilot
  projects parallel simulation of case rates
• Pick a project
• Residential and outpatient - per hour, per diem,
  per treatment course.
• Sophistication necessary?
• Providers
• Networks
• Service delivery
• Integrated

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• How to Engage staff Others in change
• Clinical Staff - Professions
• Administrative/Support Staff
• Management
• Board
• Referral Sources

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Work Groups