The Coyote’s after YOU! Part 2

Motion Analysis: Finding the Value

At the end of Part 1 of this series, I painted a pretty gloomy picture about the reimbursement model for Motion Analysis services. I am sure many of you were jumping up and down saying; “Ah, but you left out the most important part: Facility Fees!” While it is true that facility fees help improve reimbursement for motion analysis, I think it is a mistake to even consider them when discussing the long term viability of the service (or any service for that matter).

To illustrate my point, I need to spend a little time explaining some of the principles behind how CMS reimbursement works (I know there are other insurers but let’s face it: when CMS sneezes, everybody catches the cold sooner or later).

CMS reimbursement:

CMS reimbursement is based on the Resource-Based Relative Value Scale (RBRVS), which ties reimbursement to the following factors:

1.CPT Code: The type of service

2. Relative Value Unit (RVU): the value assigned to service

3. Geographic Practice Cost Index (GPCI): a cost of living adjustment based on geographic area

4. Conversion Factor: CMS reimbursement per RVU

5. Service Setting: CMS facility vs. non-facility

For the first four factors there is an actual logic regarding how these values are calculated. First, CMS assigns a dollar value to the RVU unit. There are three types of RVU assigned to each CPT code. They correspond to the work expense, practice expense, and malpractice expense involved in providing the service. The three RVUs for a given service are then multiplied by the GPCI. The number of total RVUs per service then determines the reimbursement per CPT code.

Put simply, this means CMS reimbursement is for a CPT defined service is based on the expense incurred and work needed to provide the service. CMS also takes into account that these expenses vary among geographic areas and adjusts reimbursement based on those factors.

We can all argue about the rationale behind this system, but at least there is a definite rationale to argue about.

Facility Fees:

Now let’s move on to Facility Fees or what would be factor Number 5, The Service Setting:

A CMS approved facility; meaning a hospital, comprehensive outpatient rehabilitation facility (CORF), or an outpatient rehabilitation facility (ORF) is allowed to bill an additional ambulatory payment classification (APC) fee. For motion analysis this is applicable to codes 96000-96003. In this case, the APC code is 0708 (New Technology Level III). It would not apply to 9600 as that is a professional service.

In short, this means that if you receive a service at a “facility” you can be charged more. I am sure you have all been following the multiple stories about the billions of dollars CMS is taking back from healthcare providers for a variety of reasons. We all have read about the growing government pressure on hospitals to justify facility fees. We know that CMS has increased its focus on these fees

In fairness, if a patient receives a service at a “facility” vs. a “non-facility”, what is the difference? What is the justifiable rationale behind facility fees? Assuming the service is the same service with the same result, we have to admit the answer is there is no difference.  With that in mind, we need to start planning for what is inevitable – the end of facility fees.

It is already happening now, and will only continue to accelerate. If we are depending on earning more simply because of where we perform a service, we will fail. That doesn’t mean there won’t be opportunities to earn more for performing the same service, but the shift will be towards the method and the results, not the location.

The Bright Side:

Always know that in most things, and in all the things I write about, there is always a bright side.

While your Motion Analysis Center may not be making money based on its existing fees; as part of a larger health system, it can definitely be helping other services make more. For example, it has already been demonstrated the value of motion analysis in determining the most beneficial surgical treatments for movement disorders, such as Cerebral Palsy. If these patients are treated in the same system, the many benefits include:

1. Improved identification of surgical candidates.

2. Improved success rates.

3. The ability to document functional gains.

These things are not only better for the patient, but they have actual monetary value. The first can mean increased referrals for legitimate surgical treatments that might have been missed without the proper diagnostic tools. The second can lead to a better reputation for the hospital, free (positive) publicity, fewer malpractice suits and, again: more referrals.

The final befits will not only assist justifying the medical necessity of treatment (and therefore justifying payment for the treatment), but will become even more important as we move from our current fee for service model to an outcomes based ACO model. Similar arguments can be made for other services like physical and occupational therapy, prosthetics and orthotics, and sports medicine to name just a few. Used properly a Motion Analysis center can be a valuable tool to enhance other services, improve efficiency and drive growth. All of which has a real monetary value, albeit one which takes more effort to quantify.

The Road Ahead:

This all ties into the other points I made in Part 1:

No matter how you look at it, you can still generate a positive bottom line.

You will need to make changes regarding how you utilize your lab, but there is definitely incredible value in Motion Analysis, both in its benefits to patients and financially. However, you need to consider the long game.

The key to success is the need for CHANGE. I know what you are thinking. Every corporate cheerleader constantly spouts clichéd slogans about CHANGE. We need to be “CHANGE agents”. We must accept:  “Life is CHANGE”, “To grow is to CHANGE”, or “CHANGE or die.” And the list goes on.

Unfortunately most of these slogans really mean nothing unless they have some sort of context. The problem is that, too often, the leaders who makes these statements think the term CHANGE simply means REPLACE or ELIMINATE. Sometimes it can, but there is more almost always more value to CHANGE when it means REFINE, IMPROVE, and BUILD.

I would argue that only those health systems who have mechanisms like motion analysis to quantify results will achieve the highest rates of reimbursement. I think it likely that we will eventually see a reimbursement model where the amount of reimbursement is based primarily on the overall benefit to the health of a patient, not on what is done to the patient. In a system like that, well integrated services which share data and document outcomes, will also receive the best reimbursement.

If you think it is impossible to establish a system to do this I will tell you we can do it right now. We can already measure blood pressure, cholesterol, blood sugar levels, heart rate, bone density, cognitive ability, cadence, gait symmetry, physical strength, and reaction time, among other indicators. We can detect the increased or decreased presence of many diseases. What we do not do well currently is take all that information and place it in a health “Report Card”.  The systems which will be reimbursed the most will be the ones that improve the patient’s “grades” the most.

This will require a new approach to how we practice, and will make services like motion analysis more valuable than ever before.

More about that in Part 3.

Owner of Logan Healthcare Consulting, Patrick Logan's professional experience covers broad spectrum: executive, clinician, consultant, manufacturer, manager, educator, marketer, lecturer, athlete, motivational speaker, and even an actor. He has over 25 years of leadership experience in the healthcare field at all levels including budgeting, administration, and project management. He is a recognized expert on the healthcare market, with specialization in the integration of ancillary care models into hospital systems, facility design, and the development of best practices for national, regional and local organizations. He can be contacted through LinkedIn.