Medicare's "Psychiatric DRGs" - Anticipating the Financial Impact on Hospitals and Private Sector Organizations
On April 5, 2005, the Centers for Medicare and Medicaid Services (CMS) made an important change in its payment system for Medicare inpatients with psychiatric illnesses. Hospitals are now paid on the basis of "Psychiatric DRGs" instead of historical cost-based reimbursement.
Any change to CMS reimbursement can have a profound impact on providers and payors. When DRGs were first introduced in 1983, the hospitals that were informed and prepared sharply increased their profit margins on Medicare patients, while slow-to-react hospitals saw little if any benefit.
The complexity of the Psychiatric DRG system with its "technical adjustments" poses new opportunities and challenges to other private-sector payers, consultants, or insurers. This includes those involved in financing and delivery of psychiatric care. Equity analysts and investment bankers who evaluate hospital financial performance, behavioral health management firms, health benefits consultants, and managed care organizations will all benefit from an understanding of Psychiatric DRGs.
What You'll Learn:
How Psychiatric DRGs "fit" with other Medicare Prospective Payment Systems.
What is the Structure and Logic of the Psych DRG Payment System?
- Why were Psych DRGs developed?
- Who did the research that led to their creation?
- What are the key data elements for Psych DRG assignment?
- When does the new system become operational?
- How will the blending of prospective payment and historical costs be managed?
What Special Adjustments of Psych DRGs should Hospitals and Payers Know About that Create New Financial Opportunities?
- Co-morbid conditions
- Hospitals with full-time ERs
- Outliers
Who are the Likely "Winners and Losers" based on Past Experience with PPS?
What Data Analysis Strategy can Hospitals, Payers and Investment Analysts use to Forecast the Financial Impact of the Psych DRGs?
How Should Hospitals prepare for-or Get into Trouble-Coding Secondary Diagnoses?
What Applications can Private Insurers Implement, Based on Psych DRGs?
- Contracts for Out-Of-Network care, Based on Psych DRGs, Not Usual Per Diem Charges
- Evaluate Case Managers/Reviewers-Actual vs. Expected LOS
- Evaluate Hospital Performance, using Actual vs. Expected LOS
How Can Psych DRGs be used by Private Insurers to Evaluate Behavioral Health Firms when Mental Health benefits are "Carved Out"?
What Changes/Revisions can we expect from CMS? When? Based on what Data Analyses?
Will the Grassley-Baucus "Hospital Fair Competition Act of 2005" and CMS Administrator McClellan's Intention to "recalibrate" DRG Relative Weights have any Effect on Inpatient Reimbursement for Medicare Patients with Mental Diseases/Disorders?
The Details
Original Webcast: July 22, 2005
CD-ROM: $100 for non-attendees.
Our Speakers
Henry G. Dove, Ph.D., Casemix Consulting, LLC;
Lecturer, Yale University Health Management Program
Dr. Dove is a principal in Casemix Consulting, LLC, a firm specializing in applications of patient classification and severity adjustment systems for improvements in quality, reimbursement, productivity and profitability. Typical projects involve analysis of provider payment methods, epidemiology, statistics and financial modeling.
Dr. Dove specializes in applications of the prospective payment systems that are used by Medicare and Medicaid for hospital, physician, HMO, ambulatory surgery, home health and hospice services as well as private insurers. He holds a Ph.D. from the School of Management at Yale University. He is a faculty member in the Health Management Program in the Department of Epidemiology & Public Health at Yale University.
David K. Nace, M.D., Principal, Health Strategy Solutions- Conference Moderator
David K Nace M.D. is a physician executive with over fifteen years of experience managing both small and large healthcare organizations, as well as providing disease management and health benefit consultation services to employers, health plans, and government agencies. Dr. Nace is a founding principal of Health Strategy Solutions, a healthcare benefits consulting firm serving large employers. He was one of the first chairmen of the Healthcare Finance Council of the American Academy of Child and Adolescent Psychiatry. He is a past advisor to the World Federation on Mental Health, the World Health Organization, and the International Labor Organization in addressing health promotion and wellness from an employer policy and healthcare financing perspective.
He currently holds appointments on the Codes and Reimbursement Committee, the Committee on Managed Care, and the Council on Economic Affairs with the American Psychiatric Association .
If you have any questions, please email us at info@soluciaconsulting.com or call 860-676-8808.
