Which Free Clinical Services Generate Shared Savings?

The future of our healthcare system may rest on this very question.

The future of our healthcare system may rest on this very question. As we transition from a fee for service reimbursements system to performance program reimbursement (see 8 Performance Program That Will Change Healthcare), we need to understand which non-reimbursable clinical services improve patient outcomes and reduce overall cost of care. Accountable Care Organizations (ACOs), Bundled payments, Patient-Centered Medical Homes (PCMHs), 30 day readmission penalties and value based purchasing (“performance programs”) programs, each need this insight and guidance.

There is significant research and information on the cost, quality and outcomes of clinical services and treatments that receive reimbursement from the fee-for-service models (hospital stays, physician services, procedures, pharmaceuticals). The research and guidance on non-reimbursable clinical services is only beginning to evolve (see promising new technology and science).

It may take us decades to answer these non-reimbursable clinical services questions:

• Which patients need it?
• Which clinical conditions would be impacted?
• Which services should be provided?
• What should be the intensity of services?

Here are some of the non-reimbursable services questions we can start with:

1. When do you provide “after business hours” clinical services?

Fee-For-Service – Phone consults typically do not receive reimbursement. Patients often get sent to urgent care or the emergency room. If the providers don’t know the patient, they may run a battery of tests. An ER visit may cost $900.

Performance Program – Provide “after hours” eVisit services that are connected to medical records. The cost may be $50 per visit, the shared savings could be $400 (Medicare keeps half of savings, $450 – $50 = $400). Some eVisits have been proven to be as effective as office visits for some conditions.

Which patients should get an eVisit and which patients are better off going to urgent care?

2. How many openings do you leave in schedule for sick visits or complex patients?

Fee-For-Service – Filing up the schedule with the most patients may be an effective way to optimize revenue in the Fee-For-Service reimbursement model.

Performance Program – If there is no room for sick patients, they may end up going where they are unknown and without their medical record. A physician participating in an ACO would be impacted by the total cost of this outside visit. A 3 month wait for a dermatology visit may be fine for most patients. It could prove harmful for a complex patient with 5 chronic conditions.

3. When do you allocate more time based on patient complexity?

Fee-For-Service – If physicians spend more time getting to know patients with complex issues, they will likely reduce their overall practice revenue.

Performance Programs – Getting to know the patient, their goals, their concerns, and uncovering that hidden nugget can only happen with time. This knowledge could help improve overall patient outcomes and cost over time.

4. When do you provide Remote Patient Monitoring? What level of service?

Fee-For-Service – While hospitals get penalized for a high readmission rate for patients after hospital stays, they still get full payment for their services. They do not get reimbursed for remote patient monitoring.

Performance Programs – Reducing readmissions to hospitals is likely the most effective way to improve patient outcomes and generate shared savings. The remote patient monitoring of the patients conditions, medication adherence, physiologic metrics and physician visit follow-up has been proven to reduce readmissions.

5. When do you provide patient education services?

Fee-For-Service – Some patient education for diabetes and treating other conditions gets reimbursed, most does not.  Most education reimbursement needs to be part of a hospital, home health or skilled nursing facility stay.

Performance Programs – Based on a study, only 10% of your health can be attributed to your clinical services. Patient activation through education is critical to empower patients to understand their conditions, how to take care of themselves to ensure quality outcomes.

6. When do you provide Care Coordination?

Fee-For-Service – Once a physician referral or a hospital discharge to a skilled nursing facility is completed, there is no reimbursement for follow-up to ensure an effective transition. Medicare has a new care coordination reimbursement for hospital discharge, yet it doesn’t include follow-up.

Performance Programs – Care coordination programs ensure the patients and providers are prepared for the follow up care. They ensure the new provider has the appropriate information and the patient is fully prepared for the next stage. They also follow-up to make sure it happens.

7. When do you provide Patient Navigation services prior to surgery or a major treatment?

Fee-For-Service – There is not much reimbursement for this. Many hospitals or treatment centers do this to ensure their patients are prepared for surgery and to avoid cancellations.

Performance Programs – Patient navigation programs ensure patients fully understand the process and have realistic expectations about the outcome. A program is Washington demonstrated that when patients are fully aware of the potential outcomes and process of hip and knee replacements, there were 26 percent fewer hip replacements and 38 percent fewer knee replacements surgeries. For the fully informed that proceeded with the surgeries,  there was a 12–21 percent lower cost over six months.

The fee for service reimbursement system is designed for 95% of the patients that use 50% of the services. The new performance program reimbursements will help to address the 5% of the patients that use the remaining 50% of cost. These patients will likely benefit the most from the non-reimbursable clinical services and generate significant shared savings.  Once we understand this impact, providers may develop cost effective approaches to offer them to the rest of the population.

(reimbursements / shutterstock)