The Health Care Environment

1
The Health Care Environment

• PT Services in Context

2
Health Care Access for All

• A Worthy Goal

3
Problem

• Finding Ways to Finance the Cost of Health Care

4
Social Security Act of 1935

• Unemployment insurance
• Old-age assistance
• Aid to dependent children
• Grants to the states to provide various forms of
  medical care (e.g. visiting nurse services).

5
1965 - 19801

• The Social Security Act of 1965 created the
  Medicare (Title XVIII) and Medicaid (Title XIX)
  programs resulting in
• Unlimited funding
• Growing consumer demand
• Expansion of the health care system

6
Medicare1,2

• Federally administered
• Targeted to provide for the health care needs of
  the elderly
• Social Security Administration Amendments of 1972
  expanded coverage to persons with permanent
  disabilities
• Initially, provider reimbursement was on the
  basis of reasonable costs

7
Medicaid1,2

• State administered (but optional) with expenses
  shared between the federal government and the
  state
• Targets poor, low income elderly and disabled
  persons
• Can supplement Medicare if person eligible for
  both
• Benefits vary from state to state

8
Persons with Disabilities

• Over the age of 65 Medicare
• Under the age of 65, and
• Have otherwise qualified for Medicare based on
  number of years paying into the system Medicare
• Have not qualified for Medicare Medicaid
• Special programs for poor children (e.g. Florida
  Kidscare)

9
Cost Containment Efforts2

• Began in the 1980s as national expenditures for
  physician and hospital services increased from
  148.4 billion in 1980 to 250 billion in 1985,
  with a projected increase of 53 over the next
  five years.
• Goal to improve access while controlling costs
• Result
• Changes in payment methodology
• Rapid and continuous change within the health
  care system and in the health care needs of the
  population

10
Changes in Payment Methodologies2

• Third party payers
• Require consumer to pay more in traditional plans
  (deductibles, co-payments)
• Have shifted from traditional plans to managed
  care plans (PPOs, HMOs)
• (Note The patient is the first party the
  provider of care is the second party and whoever
  is paying for care e.g. insurance company,
  employer or other is the third party payer.)

11
Third Party Payers

• Indemnity Health Insurance Plans
• Deductibles
• Co-payments
• Amount over usual and customary rate
• Health Savings Plans
• Managed Care Organizations (MCOs)
• Preferred Provider Organization (PPO)
• Health Maintenance Organization (HMO)

12
Changes in Payment Methodologies2

• Medicare
• Prospective Payment System (PPS) a fixed rate
  payment system
• Balanced Budget Act of 1997 Balanced Budget
  Refinement Act of 1999

13
Prospective Payment System2

• Created by the Tax Equity and Fiscal
  Responsibilities Act of 1982 (TEFRA)
• Effort to control costs of Medicare program
• Eliminated payment based on reasonable costs
• Established a Prospective Payment System (PPS)
• Uses patients primary diagnoses to categorize
  them into a diagnostic-related group (DRG)
• Fixed amount paid for DRG regardless of how much
  actually spent caring for the patient

14
Balanced Budget Amendment of 19971

• Intended to eliminate the federal deficit with
  widespread cuts in Medicare and Medicaid payments
  to hospitals, home health agencies and skilled
  nursing facilities (SNFs)
• Imposed 1500 cap per beneficiary for combined PT
  and ST (and 1500 for OT) provided by CORFs,
  SNFs, and physicians offices
• Result many elderly with unmet needs

15
Balanced Budget Refinement Act of 19991

• Plan to restore 12 billion in cuts to Medicare
• Moratorium on caps on PT ST, and OT
• Postponed reductions for home health agencies and
  restored funding to some patients in SNFs
• Mandated PPS for SNFs
• Created the Outcome and Assessment Information
  Set (OASIS)
• Moratorium on caps expired January 1, 2003

16
What Happened When the Cap Expired?

• HIPAA concerns prevented immediate implementation
• HIPAA concerns were worked out (information on
  how much has been spent and how much is left is
  not a HIPAA violation)
• Annual cap of 1,590 on all out-patient therapy
  (except hospital out-patient therapy), went into
  effect on September 1, 2003 and cap was in effect
  for 98 days during 2003
• Medicare paid 1,272 (80)
• Beneficiary paid 318 (the 20 co-payment)

17
Medicare Prescription Drug, Improvement
Modernization Act of 2003

• Most famous for establishing the prescription
  drug benefit
• Suspended enforcement of the Medicare therapy cap
  on December 8, 2003
• Imposed another moratorium through December 31,
  2005
• The Act also had provisions on Direct Access
• Required MedPAC (Medicare Payment and Advisory
  Group) to study and report to congress, the
  impact of direct access to PT

18
What Now?

• Moratorium expired 12/31/2005 new cap is 1,740
  in 2006
• APTA is promoting legislation to repeal the
  Medicare therapy cap.
• APTA is promoting legislation to allow PTs direct
  access according to their state laws.
• Check APTA web site for latest information
• http//www.apta.org/AM/Template.cfm?SectionMedic
  are1TEMPLATE/CM/ContentDisplay.cfmCONTENTID303
  09

19
Effect of Therapy Cap

• Exceptions
• Automatic CMS has published a list of procedures
  and diagnoses that qualify for an exception to
  the cap (e.g. PT evaluation and re-evaluation
  hip replacement)
• Manual If there is not an automatic exception,
  PT can write to CMS and get an extension of up to
  15 visits.
• Prompt billing is important 1st in, 1st out
  payment is not based on date of service.

20
How to Contact Your Representatives

• APTA has a members only web site that allows
  you to access information about your legislators,
  current issues dealing with PT, and pre-written
  letters that can be printed and mailed or
  e-mailed to your representatives. All you need to
  know is your zip code
• http//capwiz.com/amerpta/home/
• Latest issue Student loan repayment aid for
  physical therapists Urge your U.S.
  Representative to co-sponsor H.R. 5134

21
Managed Care2

• Driven by the need of third party payers to
  control costs
• Shift from traditional insurance (which paid all
  or a percent of reasonable costs) to managed care
  plans
• Comprehensive approach that encompasses
• Planning and coordination of care
  (preauthorization gatekeeper)
• Patient and provider education
• Monitoring of quality care (utilization reviews)
• Cost control (capitation)

22
Managed Care2
23
Changes in the Health Care System1, 2

• Emphasis on cost-effective and efficient outcomes
• Shift to prevention and wellness
• Integrated service delivery
• Shift from hospitals to other levels of care

24
Changes in the Health Care Needs of the
Population1

• Increase in proportion of persons with
  disabilities
• Chronic disease (e.g. heart disease, sickle cell
  anemia, cancer)
• Sensory (e.g. hearing or visual loss)
• Physical (e.g. amputation, SCI)
• Learning disorder (e.g. dyslexia, ADD)
• Cognitive (e.g. Alzheimers)
• Mental health condition (e.g. bipolar disorder)
• Increase in the elderly population

25
Challenge and Opportunity New Skills Needed by
PTs2

• Case management skills
• Accountability for patient outcomes
• Assess the relative value of various elements in
  the delivery of care
• Demonstrate the value your services bring to the
  health care delivery process
• Advocacy skills (w/ legislatures, insurance co.)
• Creativity in identifying and meeting the needs
  of the underserved
• Adaptability to a changing health care delivery
  environment and health problems

26
The Health Care Delivery System2

• Type of Care
• Type of Setting
• Continuum of Care

27
Type of Care2

• Preventive
• Wellness programs
• Health screenings
• Health education
• Immunizations
• Primary
• The initial point of patient contact with the
  system
• Specialty
• Services, equipment and facilities not offered at
  the primary care level

28
Examples in Physical Therapy2

• Preventive care
• Teaching workers about back injury prevention
• Primary care
• With direct access, providing an evaluation to an
  injured worker prior to the patient having seen a
  physician
• Specialty care
• Providing physical therapy to an injured worker
  referred by a physician

29
Type of Setting2

• Ambulatory care
• Meets the needs of patients who are able to
  arrive for and depart from the health care
  setting on the day of service
• Inpatient care
• Offers 24-hour skilled medical care
• Home care
• All health care provided in the patients
  residence (be it a private residence, a
  residential care setting, or a homeless shelter)

30
Ambulatory Care2
31
Inpatient Care2
32
Home Care2
33
Continuum of Care2

• Wide range of services
• Preventive, Primary and Specialty Care
• Ambulatory, Inpatient and Home Care
• Organized around a patients changing needs and
  provided to the patient as the patients
  requirements change
• Coordinated among providers to ensure a smooth
  and coordinated progression
• Driving force for Integrated Delivery Network
  (IDN)

34
An Aside About Hospitals . . . 2

• Tertiary
• Emergency Care
• Cardiac
• High Risk Neonatal
• Major Trauma

• Secondary
• Routine surgical
• Routine medical
• Obstetrics
• Pediatrics
• Geriatrics
• Oncology

35
Integrated Delivery Network1,2
Baptist Health Care Systems

• A horizontally and vertically integrated health
  care delivery system
• Horizontal integration the network includes two
  or more like providers (e.g. hospitals),
  primarily to cover a large geographical region
• Vertical integration the network includes a
  variety of services that make up a comprehensive
  health care delivery system

36
References

• Curtis K. Physical Therapy Professional
  Foundations. Thorofare, NJ Slack, Inc. 2002
• Nosse LJ, Friberg DG, Kovacek PR. Managerial and
  Supervisory Principles for Physical Therapists.
  Baltimore Lippincott Williams Wilkins 1999.