So here we are. It’s the day after Super Tuesday and we are muddling through what all of the election results really mean to us. The first question I got this morning however, was; “Does the election change anything in Wound Care?”
My short answer is yes. The re-election of Obama for another term certainly solidifies the direction that healthcare reform was headed in prior to all of the countless commercials and pundits we had to live through while our candidates were on the election trail. So, due to the healthcare reform plans, there will be changes which will result in effects on wound centers.
Since this blog will fall under “Mike’s Views”, please understand that this is only my opinion, and just because I am always right, should not sway you to agree with any of it!
As a company, we knew that healthcare and reimbursment reform was going to be a certainty at some time. The numbers simply don’t add up if you try to fit all of the new Medicare eligible people into our country’s current payment and healthcare approach. That was why WCA changed our approach in 2006 to reduce costs to hospitals and provide them more control of wound center operations. We knew margins would shrink at some point and allowing hospitals to continue to be financially successful in outpatient centers would be paramount to our ongoing growth. The Accountable Care Act or Obama Care, whether you agree or disagree with it, is now certain to pick up steam as we head into the period (2013-2015) where the most significant and dramatic changes to our healthcare system go into effect. So where does that leave wound care?
I think it leaves us in a pretty strong place. The good news is that most people agree that one of the best ways to reduce overall expense and help healthcare work better, will be through out-patient care programs like Wound Care. The better news which was a nice surprise, is that we saw reimbursment for outpatient wound care services by Medicare increase by 1.8% this past month. The best news however, in my humble opinion, is that healthcare as a whole is headed to a more results-oriented payment scheme. Wound care is an extremely effective approach clinically and financially for hospitals. It can lead to reduced Length of Stays, (LOS) and offers an option for re-admissions aiding with avoidance of the 3% penalty which will be imposed on hospitals that exceed readmission rates set forth by CMS. It also means that the faster and more effectively you can heal a patient, the better. Which means that the best approach for patients may ultimately be the best approach for the providers as well. The key to financial success will be keeping an eye on expenses such as management fees and utilizing resources in the most efficient manner possible such as staff. Although that seems simple and basic, some of the hiccups coming down the road will mandate wound centers to be more efficient than ever.
What “hiccups”? The biggest bump in the road I see at the moment is the pilot program being conducted in several counties of Southern California. This program is focused on dual-eligible patients. (Patients who are both eligible for Medicare and Medical, the California version of Medicaid) This population of patients is being auto-enrolled and must opt-out to avoid being included. Not always easy for seniors over 65 to grasp from a pile of paper in the mail. This program will transfer these patients to one of eight managed care organizations who will oversee their care for the next several years under a managed care agreement allowing these entities the opportunity to determine which services these patients get and more importantly, which they don’t. Though this program will surely show a financial savings, it appears as though it will remove one of the most prized components of Medicare; no authorizations. It may also pose risks to our industry which has seen an average of over 60% of our patients having Medicare as their primary payor.
Another hiccup will be ongoing scrutiny from RAC auditors and other regulatory entities carefully watching every charge and each scrap of documentation. The announced focus on Evaluation and Management codes might have serious implications for centers that have not used a point system in their programs. I would also put a high likely-hood of reimbursement reduction , though I would suspect minimal for wound care over the next couple of years, however I would keep a close eye on Hyperbarics.
I think there are a few simple steps that can be taken to deal with these issues:
For managed care issues and possible payment reductions: keep management fees and expenses low and negotiate upfront with the payors through the hospital being careful to pay attention to “carve-outs”. For audits and regulatory concerns, work with a Wound Center Management company (I might suggest Wound Care Advantage) who’s business is to make sure you are compliant and up to date on billing, coding, and documentation requirements. Verify your center is billing correctly with weekly audits. Also, implement a wound care-focused Electronic Medical Record system.
What I am personally excited about is our industry’s ability to adapt with new approaches and revitalization of old ones in the face of changes. I suspect we will see a period of great ingenuity and entrepreneurial endeavors as a result of these challenges. An example would be the recent addition of traditional wound center management companies providing physician services in Skilled Nursing Facilities.
After this election the course for our healthcare though far from clear, does appear to lean towards more in home and outpatient approaches which falls right in the wheel-house of the wound care industry. For those reasons I think the election may have turned out our way regardless of who you were voting for.