Improving YourCardiovascular Program`s Profitability: Economics and Advocacy

The Economic Importance of Your Cardiovascular Program Cardiovascular (CV) care has been described as medicine’s single largest enterprise, accounting for 20 percent of U.S. healthcare costs and over $200 billion in hospital-based treatment. A CV program is a major contributor to a hospital’s revenuewith a national average of 30-50 percent of total revenue coming from its cardiovascular program. A well-integrated CV program is often a community hospital’s financial foundation, accounting for half of the hospital’s profits.¹ With the much-talked-about graying of America, the CV service line is, and will continue to be, a critical component of a hospital’s ability to meet the needs of the communities it serves. Thus, the CV program must have appropriate resources and, of course, healthy revenue. This article discusses administrative efficiencies that can help and also describes how advocacy speaking up for your hospital and its patients can bolster your bottom line. Capturing All the CV Revenue That’s Due Most administrators are familiar with the baseline tools that can improve a CV program’s profitability, the most obvious involving effective management of capital, human resources, supply costs and other variable factors. The following are sometimes overlooked, however: Accurate and complete coding.Are insurers paying your hospital appropriately for CV procedures? This, too, sounds obvious until one considers that many hospitals leave tens, even hundreds of thousands of dollars on the table by failing to code appropriately for reimbursement. It is critical for your CV program to have an effective relationship with the hospital’s coding officer, billing department and physicians to ensure that all charges sent to an insurer are accurate and complete. At St. Mary Medical Center, in Langhorne, Pennsylvania, Director of Cardiovascular Services Patricia A. Ockford said that to keep up with the latest Centers for Medicare and Medicaid Services (CMS) changes, communication is vital between the Cardiovascular and Finance departments. Reports are sent to Finance on a biweekly basis to track all cardiac implants for reimbursement. Reviews and updates of the Charge Description Master (CDM) are performed on a regular basis, Ockford added, noting that all cardiac cath and electrophysiology coding is within the CDM to ensure proper procedure code assignment. Advantageous contract negotiation. Given the amount of revenue that flows through a CV program in negotiating costs for cardiovascular devices, it is extremely important to work effectively with your hospital’s contracting officer, who is responsible for negotiating contracts with insurers. For example, carve out provisions that separately recognize and provide payment can be negotiated with non-Medicare insurers (who, on average, pay 112 to 123 percent more than Medicare2) for implantable cardiovascular products. Your contracting officer should be taking advantage of these as opportunities for capturing revenue. Lobbying CMS. Most hospitals depend on Medicare payments for nearly half of their revenues. Medicare is in fact the single largest payer for most hospitals. Medicare payments are particularly important to the CV program, since approximately 54 percent of inpatient and 25 percent of outpatient cardiovascular procedures are performed on Medicare patients.3-4 Medicare payment algorithms and policy also inform and influence the rates set by private insurers. Given the importance of Medicare to cash flow, it is surprising that most hospitals and cardiovascular programs do not actively lobby CMS for appropriate cardiovascular service line payments. The pursuit of better Medicare payment is an important way of serving patients and of helping the CV program meet operating and revenue objectives. Serving Patients, Improving the Bottom Line: The Opportunity for CV Administrator Leadership It is relatively rare for a CV service manager to try to influence CMS to ensure appropriate payment for services the hospital provides to Medicare beneficiaries. Nonetheless, CMS is accessible to individuals, informal networks of colleagues and associations. Given your knowledge of the economics of your service line, CV administrators have an opportunity to substantially inform CMS policies. While CMS must operate under all the processes that go with being a federal agency, it respects, appreciates and carefully considers credible front-line perspectives. Simply put, your knowledge can be used to enhance and improve your operating environment so that you can simultaneously improve patient care and the bottom line. Remember that every cardiovascular administrator can comment on Proposed Rules regarding the important coverage, coding and payment issues that CMS addresses. Time constraints. Before going any further, it must be acknowledged that those serving in the position of CV administrator barely have enough time to execute their existing portfolio of responsibilities. That said, the increasing pressure on service line margins, the unique ability of CV administrators to serve as internal leaders of new initiatives, and your ability to leverage the people within and outside of the hospital can help facilitate an advocacy effort that is not an undue burden on your time. Mobilize from within. Advocacy initiatives can start inside the hospital, driven by the CV administrator. For awareness building, self-education and action, bring together a team of stakeholders: CV program members; the Coding Department; Accounts Receivable; the Revenue Cycle/ Charge Master group; the CEO; Finance, Contracting, and External Relations officers. Know how CMS works. Once organized, your team should take responsibility for fully understanding how to access CMS’s Notice and Comment rulemaking cycles. Especially important to hospitals are the proposed and final rules that apply to inpatient and outpatient services. For instance, inpatient Diagnosis Related Groups (DRGs) are updated annually through Proposed Rules utilizing two years’ worth of MedPar data. Typically, a new Proposed Rule will be published in May and open to comments for 60 days thereafter. (This is when you must communicate!) The Final Rule is typically published in August, and the change, if any, takes effect on October 1. Outpatient APCs are updated annually and utilize charge data, but revisions take place on a different cycle. For outpatient services, the Proposed Rule is typically published in August, and the Final Rule is typically published in November, with annual changes taking effect January 1. For both inpatient and outpatient, it is important to submit your comments on Proposed Rules during the comments period. Consider Local Contractors. Hospitals may encounter resistance to the coverage of certain procedures by the local Medicare contractor. Being denied coverage and payment obviously reduces revenue opportunities. Yet few hospitals realize that they can advocate for themselves simply by voicing concern or disagreement with Local Medicare Review Policies (LMRPs). Having your hospital actively engage the medical directors of these organizations can have a real impact. Build outside alliances. Your CV/ hospital advocacy team need not go it alone or reinvent the wheel in its advocacy efforts. There are outside resources to which you can turn, and groundwork that you can access and use. Professional associations. Organizations like the American Congress of Cardiovascular Administrators (ACCA; visit https:// www.aameda.org/Specialtygroups/cardiology.html), Society of Invasive Cardiovascular Professionals (SICP; visit www.sicp.com), and Alliance of Cardiovascular Professionals (ACVP; visit www.acp-online.org) are becoming more active in communicating with federal agencies. CV administrators should encourage action by these and other associations. Conversely, when associations issue their own calls to action for more appropriate Medicare payments, CV administrators and hospital personnel should support their calls. St. Mary Medical Center in Pennsylvania advocates on three levels, according to Patricia Ockford. Our hospital works with the advocacy efforts of our system (Catholic Health East), as well as with the Hospital Association of Pennsylvania and the American Hospital Association to positively affect reimbursement and regulatory issues regarding cardiovascular health. Members of Congress. Communicating your views and actions to members of Congress is a critical step in building a relationship. A further step is to invite your senators and congressional representative to tour your cath lab. Many people members of Congress included have been touched by coronary artery disease, and a visit to a cath lab has considerable appeal not the least of which is the opportunity it presents to speak out on health care issues. A congressional visit to your cath lab will provide a fascinating glimpse of high-tech, high-intensity medicine. More important, it will educate your representatives on your vital role in hospital care and the issues that you face. Use this occasion to communicate your views on Medicare reimbursements for CV procedures. Peers. Do not underestimate the value of grassroots initiatives in the age of the Internet. E-mail your colleagues, and organize e-mail campaigns. Share information. Build constituencies and the momentum for change. Medical device company representatives. Some cardiovascular devices sales representatives are active and experienced advocates with CMS and private payers. If you are interested in influencing a Medicare payment issue, ask your sales representative for detailed information on CMS’s Notice and Comment rulemaking cycles, as well as template letters, contact information, web site resources, and advice on communicating with your congressperson. The Elements of Successful Advocacy Adequate Medicare reimbursement for cardiovascular procedures is important both to patient care and to your hospital’s mission. Advocating toward this goal involves a realization that as CV administrators and hospital leaders, you must create your own future. To recap the key elements for success: make sure that the facts you supply to lawmakers and CMS are accurate, and that your data is credible and straightforward. Form partnerships and coalitions with industry, physicians and specialty associations there is strength in numbers. With a combination of strategic alliances, effective communications and professional commitment, your advocacy efforts can and will be successful. About the Author As Director of Reimbursement and Outcomes Planning for Boston Scientific’s Cardiovascular Division, Tom Meskan is responsible for strategic market development activities with a special focus on directing the Division’s efforts to shape a favorable reimbursement and economic environment for the health professionals and institutions that use the company’s products. Mr. Meskan’s responsibilities include leading the development of strategies and tactics, and deployment of health economic and outcomes resources, to address the coverage, coding and payment policies of both Medicare and non-Medicare insurers. Tom has over 20 years of experience in working with all aspects of the development of federal and state healthcare public policy. Tom Meskan can be contacted at meskant@bsci.com. Tom Meskan discloses an employment affiliation with Boston Scientific Corporation.

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Advocating for Increased Medicare Payment: Boston Scientific’s Drug-Eluting Stent (DES) Case Drug-eluting stent technology has the potential to change the standard of care for coronary artery disease. In August 2002, CMS created two new Diagnosis Related Groups (DRGs) for drug-eluting stent procedures one DRG for patients with acute myocardial infarction (AMI), and one DRG for those without AMI. However, most hospitals felt that payments for these two new DRGs did not adequately address DE stent procedure resource use in contrast to bare metal stent procedures. In September 2002, Boston Scientific began meeting with officials from CMS, the White House, and Congress to increase their understanding of the potential clinical and economic value of DE stent procedures. From this increased understanding, we wanted to increase Medicare payments to hospitals for inpatient DE stent procedures. In addition, in early 2003, the company mobilized CV administrators, hospital leaders, physicians, and professional and physicians’ associations providing them with action steps and contact information to enable these voices to be heard by CMS during its Notice and Comment cycle. CMS’s Final Rule in August 2003 was disappointing: reimbursements for drug-eluting stents did not meaningfully increase. At the urging of our customers, and after the publication of the Inpatient Final Rule for FY04, Boston Scientific went back to work, analyzing historical information on the co-morbidities and procedural considerations that would influence the amount of resources utilized to provide a coronary stenting procedure. As most readers know, reimbursement for coronary stenting falls into four DRGs: Given that the goal of structuring DRGs is to capture clinical and resource use coherence, we examined the co-morbidities and procedural considerations inherent in coronary stenting to determine if there was a more coherent way of capturing resource use. That analysis has led us to suggest to CMS new coronary stenting DRG pairs. In short, instead of patients being differentiated as with and without AMI, we have suggested that the four above categories be changed to coronary stenting procedures with and without co-morbidities and complications: We have met with CMS to describe our data, gain their feedback and finalize our suggestion. If it follows typical procedure, CMS will publish its Inpatient Proposed Rule in May 2004, and then all of us interested in appropriate stenting procedure payment will have 60 days to comment. The Final Rule will be issued in August and implemented in October. For more on advocacy in favor of appropriate reimbursement rates for DES procedures, contact Tom Meskan at meskant@bsci.com or Deb Lorenz at lorenzd@bsci.com. 1. Health Care Strategic Management, October 2000 2. MedPAC-sponsored analyses of private insurers’ fees, August 8, 2003 3. 2001 Healthcare Cost and Utilization Project data from Agency for Health Research and Quality 4. 2001 Solucient outpatient data

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