From 3M Health Information Systems
How can data help you manage your outpatient services
Do you wonder what keeps CFOs up at night? No, just me? Well, in case you were wondering, here are some questions every CFO asks themselves: How can my facility compete in today’s competitive health care market? How has the distribution of inpatient and outpatient services changed over the past several years? What needs to be changed to ensure we provide the appropriate services to our ever-changing patient population?
These questions need to be answered to meet your patient’s needs and to continue to meet your business needs.
As we have seen over the past 10 to 12 years, the trend in health care has been a steady movement away from the traditional inpatient-only service providers to a broader range of outpatient/ambulatory service providers (i.e. hospital outpatient department, ambulatory surgery centers, physician offices, treatment centers, clinics, etc.). New technologies and techniques have made this transition possible.
Advances in technology are not the only reason we see this shift. Rising costs in health care have created a consumer-focused market where individuals can search for the best and most convenient services at the lowest cost. Additionally, insurers have started to cover more procedures performed in an outpatient setting, contributing to the move to find the best services at the lowest cost. Therefore, understanding and effectively managing your outpatient patient population is key to ensuring your success and providing cost effective services to meet increasing health care needs in the United States.
Classification systems are currently used in many states to manage outpatient claims payments distributed by a number of state Medicaid agencies and commercial payers. Understanding the distribution of services in an outpatient setting helps identify resource usage (staffing, supplies, etc.) for budgeting and growth purposes. Data generated by these classification systems help determine which services are being utilized, resulting in the consolidation of service lines as needed to accurately reflect the full scope of the services provided. This leads to the assignment of a grouping methodology used to calculate claim payment for the outpatient visit/services.
Use of an outpatient classification system to calculate payment, however, does not take into account the full value of the methodology. Ambulatory patient groups, like diagnosis related groups (DRGs) for inpatient care, were designed to explain the amount and type of resources used in an ambulatory visit. One key difference between ambulatory patient groups and inpatient DRGs is that more than one ambulatory patient group can be assigned per visit, while only one DRG is assigned per inpatient stay.
The outpatient methodology is used to adjust for case mix differences in payment methods by providing information to analyze data points such as provider utilization, cost, charges and efficiency. Ambulatory patient groups are also used to identify potentially preventable emergency department visits, a key indicator of effective population health management. Service line classifications may be generated by significant procedures, medical visits, ancillary services, incidental services or drugs.
Similar to inpatient DRGs, adjustments for factors such as staffing at your facility can be accounted for when assigning ambulatory patient groups. To generate an accurate case mix, the services of physicians and other professionals who typically bill separately, even when they are hospital employees, can be excluded, resulting in precise data for analytic purposes.
Effectively managing the transition from inpatient to outpatient care requires organizations to analyze the impacts caused by the redistribution of resources for patient care. Identifying resource utilization by relative weight is a meaningful and easy way to determine what services are being used by a revenue center and pinpointing overuse or under use of those resources.
Weights can be adjusted at the line level for packaging, consolidation and discounting, and totaled at the claim level (and visit level if there are multiple visits per claim). Rolling up each service line’s relative weight to a total relative weight by claim will allow the comparison of services that can be based on a service hierarchy which is then compared across the broader spectrum of outpatient care.
I’ll conclude this with a question and possible answer. Why is this so important? Simply, because budgets are tight, costs are rising and quality of care is important in retaining your market share and key clinical staff. Looking at relative weights for outpatient services can tell you which services could potentially be most resource intensive for your facility leading to higher resource use, higher costs and potential reduction in quality of care if staffing is not managed appropriately. Determining volume and patient mix by physician in your outpatient surgery suites will help with your staffing decisions for your outpatient services department. Not understanding your outpatient case mix can have a tremendous impact on quality, outcomes and future growth of your facility or organization.
Gregg Perfetto is a payer account manager for the regulatory and government affairs team at 3M Health Information Systems.