Published on February 24, 2014
Classification Failure ~ When the Best Coding Does Not Describe a Resource Homogenous Group Colin McCrow Manager ABF Costing
Objectives In this session we will : • Outline why resource homogeneous grouping is critical for activity based funding • Outline the reasons for classification failure • Use real world examples to outline how to analyse the causes for classification failure • Review the key steps in making the case for grant funding to ensure continuity of care
RESOURCE HOMOGENOUS GROUPS & ABF
Funding Models & Classification Systems • All output based funding models are built off actual cost data • Any activity funding system must have a grouping of like data based on comsumption of human and material resources in the production of the unit of output: ie Resource Homogenous Groups. • Actual cost data must be grouped to the classification system so ABF can occur.
Key Assumptions in Activity Based Funding • Classification systems are robust enough to ensure that like patients can be grouped and identified. • A similar amount of human and material resources has been used to create the final products consumed by the patient. • Patients will receive similar treatments, given the same presenting complaints.
Key Assumptions in Activity Based Funding • Patient centric costing systems can provide accurate consumption costing and provide the basis for building funding models. • The introduction of new technology will occur based on clinical evidence and may or may not be cost effective even if clinical outcomes are improved.
Key Assumptions in Activity Based Funding • Classification systems cannot for-see the impact of the introduction of new clinical procedures and include all potential permutations in their design. • There will always be a delay in classification change. • To ensure clinical innovation is supported Funding Models must have mechanisms for interim grants.
CAUSES OF CLASSIFICATION FAILURE
Definition • Classfication Failure in an activity based funding environment may be defined as: The identification of a sub group of patients with a similar pattern of presenting problems, a similar pattern of clinical intervention, but who are distinctly different in their use of human and material resources when compared to the main classfication group.
Definition • This subgroup may form the trigger for classfication review in the future. Normally this patient grouping will have a higher consumption of human and material resources from a cost or volume (or cost and volume perspective). They will have an impact on the relative efficiency of the overall health service.
Definition • Because of the cost differential to the main group, adjustments to funding models may need to be made to ensure service continuity.Where new technology has been introduced that provides a better clinical outcome , a funding strategy is required to support the introduction of that technology.
System Causes • Documentation quality affecting accurate coding. • Complexity levels of PCCL / grouper business rules not reflecting actual patient acuity. • Coding accuracy. • Classfication maturity.
Clinical Causes • Co-morbid chronic condition clusters affecting the healing process or requiring increased intervention. • New Technology that provides improved clinical outcomes but higher cost. • Other clinical factors affecting Rx or length of stay such as mental health conditions.
CASE STUDY – HYPERBARIC TREATMENTS
Oveview • Hyperbaric Treatment has been shown to have a significant clinical outcome benefits. • It however is not cheap technology. • In a purchaser provider enviornment we need to ensure that our hosptals have enough funds to provide for good clinical outcomes….. • But is additional funding over the DRG activity payment required ?
What is ABF Best Practice? Least Intervention + Shortest ALOS + Best Practice + Lowest Cost + Best Clinical Outcome
Building The Study Identify Patient Cost records from Hyperbaric Department Identify DRG for patient admission Identify Revenue for each Episode Identify cost for each episode Build Profit Loss Statement Review ALOS Has ABF Best Practice Been Identified Review Variance to control (No Rx) group Identify Further Areas For Analysis Flag patient records with HP Rx Select all patients with same DRG’s Select all other interventions by PMI for reference year Review Case for Funding Grant
Data Caveat • The slides which follow include sample data to illustrate this process. While these are based on real world data (you will find similar outputs and outcomes like this illustrated in real databases), the examples have been deliberately changed. The purpose is to illustrate the process and initiate further discussion & thought.
Base Data • 87 different DRG’s (version 7) • 7085 patients reviewed • DRG’s with minimal volume in the treatment group where not further investigated
Final HP RX group • • • • 1475 patients Profit making = 507 Loss = 968 ave loss pre patient over $ 400 each when compared to revenue for straight DRG activity based funding
Study Group DRG B82C B82C D67B D67B F65B F65B G70C G70C I82Z I82Z L67C L67C X63B X63B X64B X64B Z64B Z64B Totals DRG Description Chronic and Unspec Para/Quadriplegia W or W/O OR Proc W/O Cat CC Chronic and Unspec Para/Quadriplegia W or W/O OR Proc W/O Cat CC Oral & Dental Disorders, SameDay Oral & Dental Disorders, SameDay Peripheral Vascular Disorders W/O Catastropic or Severe CC Peripheral Vascular Disorders W/O Catastropic or Severe CC Other Digestive System Disorders Sameday Other Digestive System Disorders Sameday Musculoskeletal Injuries, Sameday Musculoskeletal Injuries, Sameday Other Kidney & Urinary Tract Disorders, Sameday Other Kidney & Urinary Tract Disorders, Sameday Sequale of Treatment W/O Catastrophic or Severe CC Sequale of Treatment W/O Catastrophic or Severe CC Other Injuries, Poisonings and Toxic Effects W/O Catastrophic or Severe CC Other Injuries, Poisonings and Toxic Effects W/O Catastrophic or Severe CC Other Factors Influencing Helath Status Sameday Other Factors Influencing Helath Status Sameday hp_rx N Y N Y N Y N Y N Y N Y N Y N Y N Y TotalCount 144 24 101 227 89 50 354 75 432 158 109 52 139 85 99 46 217 131 2532
Comparing Ave Profit Loss Rx and Control Group $4,000.00 $3,000.00 $2,000.00 $1,000.00 $0.00 $1,000.00 $2,000.00 $3,000.00 N Y N Y N Y N Y N Y N Y N Y N Y N Y B82C B82C D67B D67B F65B F65B G70C G70C I82Z I82Z L67C L67C X63B X63B X64B X64B Z64B Z64B Ave Profit Loss $(750 $3,50 $(400 $(450 $(100 $(400 $(430 $(870 $(135 $(115 $(420 $(590 $(645 $(620 $(1,4 $(2,3 $(490 $(530
Ave Profit Loss Rx & Control Group- Chronic and Unspec Para/Quadriplegia W or W/O OR Proc W/O Cat CC $4,000.00 $3,500.00 $3,000.00 $2,500.00 $2,000.00 $1,500.00 $1,000.00 $500.00 $0.00 $500.00 $1,000.00 Ave Profit Loss N B82C $(750.00) Y $3,500.00
Ave Profit Loss Rx & Control Group- Other Injuries, Poisonings and Toxic Effects W/O Catastrophic or Severe CC $0.00 $500.00 $1,000.00 $1,500.00 $2,000.00 $2,500.00 N Y X64B Ave Profit Loss $(1,475.00) $(2,300.00)
Ave Profit Loss Rx & Control Group - Peripheral Vascular Disorders W/O Catastropic or Severe CC $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 $300.00 $350.00 $400.00 $450.00 N Y F65B Ave Profit Loss $(100.00) $(400.00)
Ave Profit Loss Variance drg B82C B82C D67B D67B F65B F65B G70C G70C I82Z I82Z L67C L67C X63B X63B X64B X64B Z64B Z64B Totals hp_rx N Y N Y N Y N Y N Y N Y N Y N Y N Y TotalCount Ave Profit Loss 144 -$ 750.00 24 $ 3,500.00 101 -$ 400.00 227 -$ 450.00 89 -$ 100.00 50 -$ 400.00 354 -$ 430.00 75 -$ 870.00 432 -$ 135.00 158 -$ 115.00 109 -$ 420.00 52 -$ 590.00 139 -$ 645.00 85 -$ 620.00 99 -$ 1,475.00 46 -$ 2,300.00 217 -$ 490.00 131 -$ 530.00 $ 2,532.00
Non Treatment Study Group Interventions by Visit Type 1% 1% 8% 1% 9% 11% Admitted Emergency Presentation Non Admitted Emergency Presentation Allied Health/Nursing Outpatient Visit Diagnostic Outpatient Visit 23% Medical Outpatient Visit Other Acute Admission Other Procedure Clinic Other Sub-Acute Admission 23% Outpatient Hyperbaric Rx Study_Admission 17% 6%
Treatment Study Group Interventions by Visit Type 1% 2% 11% 2% Admitted Emergency Presentation Non Admitted Emergency Presentation 7% Allied Health/Nursing Outpatient Visit Diagnostic Outpatient Visit 3% 0% Medical Outpatient Visit 0% Other Acute Admission Other Procedure Clinic Other Sub-Acute Admission 63% 11% Outpatient Hyperbaric Rx Study_Admission
Annual Interventions where no study admission included Hyperbaric Rx HP_RX N N N N N N N N N N Totals Study_Record Admitted Emergency Presentation Non Admitted Emergency Presentation Allied Health/Nursing Outpatient Visit Diagnostic Outpatient Visit Medical Outpatient Visit Other Acute Admission Other Procedure Clinic Other Sub-Acute Admission Outpatient Hyperbaric Rx Study_Admission Vol 2004 2393 5150 1232 3749 5106 198 187 124 1881 22024
Annual Interventions where study admission included Hyperbaric Rx HP_RX Y Y Y Y Y Y Y Y Y Y Totals Study_Record Admitted Emergency Presentation Non Admitted Emergency Presentation Allied Health/Nursing Outpatient Visit Diagnostic Outpatient Visit Medical Outpatient Visit Other Acute Admission Other Procedure Clinic Other Sub-Acute Admission Outpatient Hyperbaric Rx Study_Admission Vol 30 12 157 23 110 46 1 1 167 926 1473
Does Hyperbaric Rx reduce Health Interactions? Volume Of Health Care Interventions Total Health Interventions by PMI 25000 20000 15000 10000 5000 0 Volume Hyperbaric Rx with DRG 1473 No Hyperbaric RX with DRG 22024
Conclusions • From the data the following can be concluded : • Hyperbaric treatment does add to the cost of intervention on a visit by visit basis. It does not therefore meet the ABF best practice criteria of lowest cost. • LOS was not a factor in review between the RX and non Rx group
Conclusions • Numerous clinical studies strongly support improved clinical outcomes so this criteria is met. • There was a significant difference in the total number of other health interventions when considering the Rx to non Rx group this ABF best practice criteria was defintaly met.
Further Analysis Required • Detailed review of total health care intevention products utilised by the Rx and non Rx group should be undertaken to help build best practice. • All data should be confirmed for validiaty and accuracy with the service providers. • While in the same LHN a number of the patients in the non Rx group where cared for in smaller associated facilities.
THE CASE FOR ADDITIONAL FUNDING
Criteria to be met • A sub-group of patients with costs consistently greater than average ABF reimbursment. • Improved clinical outcomes (supporting new technology). • Reduction in other health interventions (but this may lead to funding loss in other areas that would occur if no Rx). • More efficient use of health resources.
Discussion • Activity Based Funding is complex … there will always be winners and loosers within classfication groups. • Classfication systems need to be reviewed where there are changes in clinical practice but there always will be a delay • The decision to provide or not provide additional funding is always an area of tension in purchaser provider arrangments.
Questions & Contact Information Please direct any questions to: Colin McCrow Manager ABF Costing ABF Model Team System Policy & Performance Division Queensland Health Email : firstname.lastname@example.org
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