How to Fund Your Palliative Care Program: Practical Strategies for the Real World .

1. How to Fund Your Palliative Care Program: Practical Strategies for the Real World. Reimbursement for Hospital Services Mary Ann Gill, MAMount Carmel Health Lynn Hill Spragens, MBAThe Bard Group

2. Center to Advance Palliative Care Mount Sinai School of Medicine 1255 5th Avenue, C-2 New York, NY 10029 212-201-2670 office 212-426-1369 fax 212-201-2680 event line www.capcmssm.org A national initiative supported by The Robert Wood Johnson Foundation at Mount Sinai School of Medicine.

3. Learning Objectives • Understand and apply real life strategies for assessing need for in-hospital palliative care • Understand hospital payment systems and required documentation • Understand ramifications of payer mix and related provider relations strategies • Learn strategies for effective interface with hospital case management and payers

4. Mount Carmel: Multi-hospital System with Vertical Integration • Serving Columbus for 116 years • Three hospitals --53,737 inpatient admissions • 1036 Licensed Beds • Owns College of Nursing, Medicare Choice, Physician practices, ASC’s, Urgent Care Centers. • Owns Care Continuum Services Corporation (Home Health, Hospice, Home Infusion, HME, HI Pharmacy divisions)

5. About Mount Carmel Health • Physician Characteristics • Role of Case Management • Financial Status • Payer Mix

6. About Mount Carmel Hospice ... • Operating since 1985 • Established presence in health system • Integral to hospitals’ bioethics and system-wide pain management program (1994) • In 1995, began process of internal review to create continuum of EOL care

7. The Paradox • Hospice program in community poised to provide care to dying patients yet experiencing stricter utilization standards for non-cancer patients and lower ALOS • Hospitals with many dying patients, no structured palliative care and high LOS

8. Hospice Costs & Revenue vs LOS High initial costs Final Events’ Cost Cost per day $106/day Revenue Days enrolled in Hospice

9. Hospital Costs & Rev vs LOS ICU @ $2500+ Cost Med/Surg @ $1000+ Cost LOSSES! Cost per day Revenue/Case @ $10k ave. Days in acute care bed

10. The Hypothesis • Earlier, smoother transition needed between hospital and hospices • Method needed to identify hospital patient cohort with apparent “hospice-like” needs • Process/structure needed for hospice-like palliative care provided in hospital

11. What was Valued? • Sensitive, humane and coordinated care for seriously ill, perhaps dying patients regardless of setting • Advance care planning starting sooner i.e. during hospitalization • Focus on pain and other uncomfortable sx • Creation of a Continuum of EOL care from hospital to hospice as appropriate

12. Related Research • The SUPPORT Study • The Dartmouth Study • Managed Care References

13. Recommendations of SUPPORT re: Quality • Create palliative care programs in hospitals • Apply what works in hospice: • interdisciplinary team process • patient and family focus • pain and symptom management focus • ready access to Palliative Physicians

14. Findings of Dartmouth Study • Most Medicare deaths occur in hospitals (range 20-51%) • Hospice or “hospice-like” paradigm was typically not present in hospital • Difficult to outpace the unpredictable course of patients w/o in-house Palliative EOL consults • Dartmouth Atlas of Health Care in the United States, 1998

15. Recommendations of Managed Care Experts re: managing hospital EOL costs • Establish common reimbursement methodology with major payors • e.g. Prospective Payment methodology. • Identify patients with intense needs and high utilization • Establish methodology for controlling length of stay • Healthcare Advisory Board

16. Why aligning strategies is important • Easier to do a few things consistently well • Prefer payment methods that reward creative use of staff to improve outcomes, rather than maximizing billable services • Easier to do if your organization can manage “across the continuum” and reallocate funds (advantage of capitation)

17. Comparisons of Payer Strategies “Charges” $$ Case Rates Per Diem Rates DFFS… LOS

18. Defining the Cohort of “hospice-like patients” • High readmission rate ( two or more admissions per year) • High LOS (> 7 days) • Higher ratio of Medicare patients than hospital • Higher non-cancer ratio than Hospice

19. Proposed Collaboration in Palliative Care • Hospice Interest in creating continuum • Governance: Who is in charge? • How will program be financed? • What will hospitals gain?

20. Getting Started • Create Physician Advisory Board • Proposal to Administration approved • Identify benchmark

21. Scope of the Proposed Project • Service Elements • Distinct Units • Direct care team that is specially trained • Consultation team • Operational framework • Initial funding Source

22. Role of Hospitals • Designate space, tailor environment • Designate and screen staff • Support staff education, competency • Accommodate under licensed beds • Accessible bioethics decision processes

23. Role Of Hospice • Apply modified hospice paradigm • Translate clinical/financial impact • Translate value to payers • Provide palliative consultation, mentoring • Train Hospital Interdisciplinary direct care team and ongoing mentoring

24. Defining Acute Palliative Care • By unpredictability of prognosis • By acute and episodic symptom management needs related to life-limiting illness of hospitalized patients

25. Defining Role of Hospice vis a vis Acute Palliative Care • Patients transitioning to Hospice before, during, after hospitalization • Noting potential advantages and risks

26. Designing the Elements of the APCS • Daily team rounds, weekly IDT conferences • Palliative physician mentoring role • Admission and discharge criteria • IDT ongoing education/development plan • Role of palliative consultation team • Process for data collection

27. Building Quality and Financial Control into the Program • Patient, family, physician and PC Team determine care plan together • Plan checked daily for validity by the palliative care team • Benefits/burdens of treatment weighed daily • Active discharge planning initiated on entry • Family support

28. Attending physician Palliative/Hospice nurse clinician Palliative /Hospice physician Unit nurses Social worker Volunteers Chaplain Dietitian Pharmacist Patient care assistant Respiratory Therapist Identifying & Training the Palliative Care Team

29. Articulating Desired Outcomes • Informed Choice • Optimal pain and symptom management • Continuum of EOL care starting earlier • Dual Management Model applied • Cost avoidance through utilization control

30. Operational Framework:Financial Implications • Staffing with primary and secondary assignments to reduce impact of fluctuating census • Understanding implications of payor mix • Defining service to payers initially and advocate re: denials on ongoing basis • Physician billing to support APCCS • Establishing parameters for use of donations

31. Summary: Who funds what? • Staff on inpatient unit? • Overhead, space, support services? • Physician time? • Other team members?

32. Building Trust: Response to “crises” • Hospitals on overload needing APCU beds • Hospitals’ reaction to initial APCU denials • Physicians’ concerns re: role of Palliative Physician • Severe Nursing shortage impacting Hospice and hospitals

33. Building Trust:Managing Care • Clinically validate need for acute hospitalization • Systemic focus on key symptom management • Efficient and timely discharge planning

34. Hospitals Vs APCS: Implications of Payer Mix • Hospitals APCS • Medicare 29.2% 58.7% • Medicaid 7.4% 4.4% • Commercial 46.0% 15.8% • Medicare Risk 13.1% 14.3 • Uninsured 4.0% 1.2%

35. Implications of Diagnosis type Primary Diagnosis n % Cancer 1992 38.6% Non Cancer Cardiac 875 17.0% Pulmonary 789 15.3% CVA 497 9.6%

36. Implications of Discharge Destinations Continuum Hospice Home Hospice 25.2% ECF Hospice 8.8% ECF-Skilled 7.1% Homehealth 3.7% Other 3.9%

37. Physician Ratings • Six months post implementation • After one year • After two years • Current

38. Impact on Hospice program • Actual 10 days increase in ALOS •  patient deaths from 0-7 days by 12% •  system awareness of EOL care •  Patient/Family preparedness for Hospice care

39. Systemic Impact • 1996 - only 9% of hospitalized dying patients received structured palliative care • 2001, 43% of hospitalized dying patients received acute palliative care • High numbers of patients revise RS status • LOS reduced

40. Key Financial Impact: Hospital LOS • Impact on LOS significant when comparing patients directly admitted to APCU vs. patients who transfer from another area of hospital to APCU

41. Controlling LOS • APCS’ largest payer reimburses on case rate • Hospitals seek to control LOS • APCS daily coordination of care, rapid • intervention and early discharge planning • Reduced LOS • Cost Avoidance re resource consumption • Revenue Producing ?

42. LOS: Transfer Vs. Direct Admission • Patients transferred to the APC Units from elsewhere in hospital: • Hospital ALOS of 10.8 days • Hospital only ALOS 7.1 days • APCU only ALOS 3.7 days • Mortality of 63.4 % • Patients directly admitted to the APC Units : • ALOS 3.7 days • Mortality of 55.1 %

43. Characteristics of the Two Groups • Variance due to patient characteristics? • Variance due to physician characteristics? • Common Factors Identifiable? • Clinical and Financial Impact?

44. Calculation of Savings • Reduced LOS • Change of Setting • Change of Payer • Coordination of Services

45. Caveats: Potential Financial Risks to Hospital • What if Acute Palliative Care extends hospitalization e. g. LOS? • What if Acute Palliative Care prevents Hospice referrals and results in unreimbursed care? • What if payors translate all EOL care as Hospice care and reimburse at Hospice GIP rate?

46. Important Local Market Considerations • Payor Mix • Presence of Medicare Choice products • Hospitals’ use of Standardized Admission Criteria • Impact of “Boutique” hospitals • Oncologists use of Hospice programs • Insurance Case Management processes

47. Implications of Payor Mix • Primarily DRG based PPS (Medicare) • Medicare Choice often-but not always- will replicate Medicare PPS • Chronic EOL patients often exceed national anticipated ALOS • Can hospital volumes absorb Palliative utilization rates?

48. Review: Medicare PPS System • 25 MDCs • 506 Diagnosis Related Groups (DRGs)-- discharge rates based on patient condition, related treatment strategy and market conditions + • Primary Diagnosis • Procedures • Age • Discharge Destinations • MedPac Report to the Congress: Medicare Payment Policy March, 2002

49. Review: DRGs • Discharge Diagnoses • + Principal Dx ( main problem) • + Up to 8 Secondary Diagnoses • + Comorbidities • + Complications • MedPac Report to the Congress: Medicare Payment Policy March, 2002

50. Review: DRGs • 72 hour rule • Early Discharge Rule • 10 DRGs incorporating SNF, HC, Rehab, Psych payments • MedPac Report to the Congress: Medicare Payment Policy March, 2002