Recommendations for Responding to Changes in Reimbursement Policy

Byrnes, John; Fifer, Joe
September 2010
Frontiers of Health Services Management;Fall2010, Vol. 27 Issue 1, p3
With profound changes in reimbursement policy on the horizon, organizations are preparing a variety of responses to ensure long-term success. Most are anticipating decreases in reimbursement rates from most payers. Whether due to nonpayment for hospital-acquired complications and infections, reductions due to high readmission rates, or a move toward value- based purchasing and bundled payment models, the impact is predicted to be substantial. Because of these sweeping changes, organizations must quickly prepare a thoughtful, effective response to ensure their financial stability. At the heart of these global changes in reimbursement, including those in the healthcare reform legislation, is a drive toward integration, the formation of integrated delivery systems in response to changing financial incentives. How- ever, the new integrated systems must be not just an assemblage of the required components, but a true functional integration in which patients experience a seamless continuum of care that is highly coordinated, efficient, effective, and accessible. In this article, we'll address changes in reimbursement and recommended responses from three perspectives. First, we offer a three-pronged approach for managing general decreases in reimbursement. Second, we highlight strategies for managing nonpayment for readmissions, focusing on the demonstration project in the state of Michigan, MI STAAR. And finally, we review managing patient care in an environment of bundled payment, including the interventions at the center of the PROMETHEUS demonstration project.


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