Avoid Loss in Bundled Payment By Billing Some Services Separately
Published on Wed Dec 01, 1999
Its not uncommon for an oncology practice to accept bundled payment for chemotherapy services. This includes the costs of the chemotherapy drug, its administration, and intravenous solutions, tubing, start kits and a host of other services the payer wants to include.
Physicians accept this bundled arrangement out of fear of being cut off from patients and/or in exchange for being paid faster by the HMO. The hope is that they can provide a high level of service while not exceeding the amount they will be paid. But oncology practices are finding it increasing difficult to break even in bundled payment situations.
But it doesnt have to be a losing proposition, says Barbara J. Girvin, RN, CCS, CCS-P, president of Medical Management Resources, a Columbia City, IN-based heathcare management firm, whose services include consultation to oncology practices.
Control Costs
The solution lies in the preparation and negotiation of managed care contracts, she says. Girvin advises that oncology practices take the following steps:
1. Know your costs: Too often, physicians enter into managed care contracts without a clear picture of how much it costs them to deliver services. Without that knowledge, its impossible to gauge whether a proposed bundled payment is adequate.
Further, failure to cost out the services included in a proposed bundled payment agreement leaves physicians unable to determine whether the proposed payment takes into consideration all services that can occur for a specific service, such as chemotherapy.
Consider a proposed payment of $220 for one round of intravenous chemotherapy (96408-96414). Included in the payment are the basicsadministration of the agent, nursing time, the chemotherapy agent itself, IV solutions, tubing and start kits. What if the contract includes all other services that might occur as a result of the treatment? For example, the patient might require blood products, such as Epotin Alpha (HCPCS Q0136) to treat anemia, a common side effect of chemotherapy. This expensive drug could easily put the cost of care above the assigned bundled price for chemotherapy treatment.
Girvin advises practices to prepare a worksheet that lists services provided under broader bundled payment categories, such as chemotherapy. For instance, calculate the total for the basic services and supplies listed above and then begin adding the costs of other treatment services.
2. Carve out services you know payment will not cover: As practices begin to assess their costs they will soon learn which items are potentially crippling to their bottom lines. Girvin mentions a few common services that are often unaccounted for but could be included in a bundled payment arrangement:
- Additional hydration for patients who experience chemotherapy-induced vomiting.
- Administration and cost of Zofran to relieve chemotherapy-induced vomiting (HCPCS J2405).
- Additional medication associated [...]
