February 26, 2013
Marcum's National Healthcare Industry Group Leaders Interviewed by The Metropolitan Corporate Counsel: "Reimbursement, Compliance And Other Challenges For Providers In Healthcare."
Editor: Please tell us about your practice areas.
Bavolack: I function as Marcum’s National Healthcare Practice leader, and my background includes over 20 years of experience in healthcare finance, operations and reimbursement. Marcum’s clients represent a cross-section of the healthcare industry and include long-term care providers, home healthcare agencies, residential care homes, physician practices and hospitals.
Miller: I’ve been practicing in the healthcare sector for over 20 years and am now Marcum’s West Coast Healthcare Practice leader. Primarily an audit partner, I am involved in auditing and financial consulting for hospitals and clinics. In general, I work with acute-care hospitals (both standalone and those within systems), mobile surgical centers and various healthcare clinics, both not-for-profits and for-profits.
Editor: Matt, as the American population ages, elder care is becoming a major growth industry. During your years advising clients in this sector, what overall trends have you witnessed, and what trends are emerging in the long-term care and home healthcare arena?
Bavolack: As the population continues to age, and federal and state reimbursement continues to shrink, providers are faced with reinventing themselves to meet the ever-growing demands imposed by increasing costs and outside regulatory influences. Successful providers are continually looking to maintain quality care while also keeping a competitive edge by diversifying themselves, with an eye toward expanding and/or developing new services.
Editor: The rising cost of healthcare for this aging population has become the biggest driver of our long-term debt. One agenda item is changing the way the government pays for Medicare, specifically, linking quality of care to cost. How will this affect nursing home and home-care providers?
Bavolack: Prior to the early ’90s, many providers were paid through a cost-based reimbursement model. With the federal government’s goal of controlling costs, some form of Prospective Payment System (PPS) was implemented. This system reimburses providers on an episodic basis. Trending forward, the federal government continues to evolve payment mechanisms to include a case mix indexing (CMI), ACO and ASO models designed to reduce reimbursement and enhance community-based programs. This is evidenced by the recent 11.5 percent rate reduction to nursing home PPS rates.
At the same time, the federal government continues to impose new audit initiatives to recoup fraudulent claims and payments to nursing home and home-care providers.
Miller: It’s easy to say that linking quality of care to cost is a good thing; everyone can get on that bandwagon. The question becomes, how do you develop the metrics for that? I’ve served on the Dignity Healthcare Audit Committee for five years, and they believe that if you have good quality of care, obviously costs are going to go down – but how can you measure this, let alone administer such a program? Many large healthcare systems grapple with this, because they do want to provide good care, but it’s hard to do when you know that if you spend an extra day with a patient then you’ll be arguing about it for years with Medicare. The RACs (recovery audit contractors) who come into hospitals today are not there on a daily basis and are ill-equipped to assess quality of care.