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Antitrust issues for the nurse anesthetist: areas of concern.

This article is the second of a two-part article on antitrust issues as applicable to certified registered nurse anesthetist (CRNAs). The first part, presented in the March 1992 issue, provided an overview of antitrust law and discussed issues related to establishing jurisdiction under federal law. The second part, presented in this issue, focuses on specific antitrust areas of concern to the CRNA, including staff privileges, peer review, price fixing, and insurance. Specific practical recommendations for dealing with antitrust situations are offered.

Antitrust Laws

RBRVS: still good news for physicians.

Lately, many physicians have been saying they've become disillusioned with the RBRVS. They don't believe the physician payment reform will bring gains for their undervalued evaluation and management services. They don't trust the federal government to live up to its end of the bargain. However, no one should write off the RBRVS. As can be seen from the text below, RBRVS will protect undervalued evaluation and management services in an era of medicare budget-cutting; it will introduce fairness and rationality into the Medicare payment system; it will provide a basis for arguing against unfair cuts in reimbursement (such as the recent ban on payment for most EKG interpretations) and it will bring the profession together to fight against any further cuts in the Medicare program.

Humans

Critical appraisal of the DRG system: problem areas for DRG reimbursement in the USA.

One may conclude that the prospective payment system known as Diagnosis Related Groups is the initial thrust of the government to reduce the rate of expenditures for Medicare patients in the acute hospital setting. More will come and probably soon. Among the criticism and concern, one must not ignore the non-inclusion of the physician provider in this system. Cost shifting to the private payer will probably result in DRGs in that area also. Concern about the ability to provide the technology necessary to render quality care is utmost on the minds of providers. The shift of patients into the alternate health care field will leave hospitals with fewer patients who are overall much sicker and the hospital will have fewer dollars from which to provide that care. There is specific criticism of some of the DRG groupings and concern with the way in which physicians will be brought under the system. The issue of bad debts and care for the indigent must be addressed. A great deal of attention must be paid in the manner in which capital costs are reimbursed. Medical education costs must be satisfactorily addressed on a national basis. MEDPAR data used to provide data base for determining the DRG rates, must be upgraded to bring fairness to the system. Now medical technology must be examined quickly and the costs of those desirable technological advances incorporated into the DRG rate so as not to impede their use. Perhaps the greatest concern relates to the factors which will be incorporated into the rate basis and those which affect the allowable rate increases.(ABSTRACT TRUNCATED AT 250 WORDS)

Costs and Cost Analysis

Psychiatry and the resource-based relative value scale.

Attention to reform of reimbursement for psychiatric inpatient services largely focuses on the use of prospective payment systems, e.g., payment based on diagnosis-related groups (DGRs), for hospitals. Recently, there also has been interest in proposals for altering physician reimbursement (inpatient and outpatient) by using physician DRGs, capitation models, or relative value scales instead of the charge-based, fee-for-service model. The authors review the resource-based relative value scale (RBRVS) as an option for psychiatry. The RBRVS uses the setting, the time spent, the difficulty in treating the patient, the training, and the psychiatrist's role to determine reimbursement rates.

Centers for Medicare and Medicaid Services, U.S.

Development and application of a population-oriented measure of ambulatory care case-mix.

This article describes a new case-mix methodology applicable primarily to the ambulatory care sector. The Ambulatory Care Group (ACG) system provides a conceptually simple, statistically valid, and clinically relevant measure useful in predicting the utilization of ambulatory health services within a particular population group. ACGs are based on a person's demographic characteristics and their pattern of disease over an extended period of time, such as a year. Specifically, the ACG system is driven by a person's age, sex, and ICD-9-CM diagnoses assigned during patient-provider encounters; it does not require any special data beyond those collected routinely by insurance claims systems or encounter forms. The categorization scheme does not depend on the presence of specific diagnoses that may change over time; rather it is based on broad clusters of diagnoses and conditions. The presence or absence of each disease cluster, along with age and sex, are used to classify a person into one of 51 ACG categories. The ACG system has been developed and tested using computerized encounter and claims data from more than 160,000 continuous enrollees at four large HMOs and a state's Medicaid program. The ACG system can explain more than 50% of the variance in ambulatory resource use if used retrospectively and more than 20% if applied prospectively. This compares with 6% when age and sex alone are used. In addition to describing ACG development and validation, this article also explores some potential applications of the system for provider payment, quality assurance, utilization review, and health services research, particularly as it relates to capitated settings.

Adolescent

Refinement and expansion of the Harvard Resource-Based Relative Value Scale: the second phase.

The Harvard resource-based relative value scale (RBRVS) for physician services has assumed a critical role in physician payment reform. We have demonstrated that the relative resource costs of providing physician services can be defined and measured in a rational and systematic way and that the results are reliable and valid. Consequently, the RBRVS is a viable basis for national payment policy and could be used for establishing a national fee schedule for physician services or to identify "mispriced" physician procedures. Since the release of the final report of the first phase of the Harvard RBRVS study in September of 1988, there has been extensive review, discussion, and criticism of the RBRVS. Dr. Laurence F. McMahon, Jr., in the accompanying article, provides a further critique of our research. In this paper, we review the RBRVS study and results and respond to the major criticisms that have been raised by Dr. McMahon and others. We then describe the tasks we are currently undertaking to expand and validate our research and address the important criticisms and limitations.

Data Interpretation, Statistical

Health status adjustments for Medicare capitation.

The issue of biased selection has taken on increased importance because of the growing numbers of Medicare beneficiaries enrolled in capitated systems. One way to deal with biased selection is through adjusting payment to health plans to reflect enrollee health status. This paper reviews proposed health status adjustors based on perceived health status, functional health status, health service use, program entitlement data, mortality, and risk factors. There is evidence that almost all of these could perform better in a statistical sense than the current Medicare HMO payment formula. For policy purposes, the most practical adjustors at present are measures based on prior use of services. These could be tested and perhaps implemented now as work proceeds on other adjustors.

Capitation Fee

The courts and health policy: strengths and limitations.

In recent years the nation's courts have expanded their influence in health policy in four areas: reviewing insurers' coverage decisions, deciding the adequacy of Medicaid payment rates to hospitals and nursing homes, arbitrating hospital mergers, and assessing hospitals' tax-exempt status. The major problem with developing health policy through the courts is that the courts' focus will be the concerns of the individuals or groups involved in specific cases, not the broader implications and overall objectives of the health care system. As alternatives to litigation to resolve policy conflicts, scholars have suggested negotiation, binding arbitration, clarification of legislative language, administrative courts, contract revision, and general restructuring of the decision-making process.

Charities

The first DRG: lessons from the end stage renal disease program for the prospective payment system.

When Medicare implemented the diagnosis related group (DRG) method of reimbursement for hospitals in 1983, it already had a decade of experience using a prospective payment arrangement for its end stage renal disease (ESRD) program. We reviewed this experience to determine the lessons for Medicare's reimbursement of hospital services. The use of a fixed price for renal dialysis encouraged the introduction of cost-saving techniques. Failure to reduce the price for dialysis in keeping with the cost reductions, however, prevented the government from realizing the full benefits of prospective payment. In addition, there were important changes in medical practice that had independent effects on the program. Similar influences are likely to shape the impact of prospective payment on hospital behavior.

Diagnosis-Related Groups

The effects of regulation, competition, and ownership on mortality rates among hospital inpatients.

We examined the influence of the regulation of hospital rates, state certificate-of-need programs, competition, and hospital ownership on mortality rates among inpatients receiving care under Medicare for 16 selected clinical conditions that were studied as a group. Data were obtained from the records of 214,839 patients who received care in 981 hospitals in 45 states from July 1, 1983, through June 30, 1984. We found significant associations between higher mortality rates among inpatients and the stringency of state programs to review hospital rates (P less than or equal to 0.05), the stringency of certificate-of-need legislation (P less than or equal to 0.01), and the intensity of competition in the marketplace, as measured by enrollment in health maintenance organizations (P less than or equal to 0.05). Hospitals in the states with the most stringent review procedures for hospital rates had ratios of actual to predicted death rates that were 6 to 10 percent higher than those of hospitals in states with less stringent rate-review programs (P less than or equal to 0.001). Hospitals in the states with the most stringent procedures for reviewing applications for certificates of need had ratios of actual to predicted death rates that were 5 to 6 percent higher than those of hospitals in states with less stringent certificate-of-need procedures (P less than or equal to 0.05). There was no statistically significant association between mortality rates among inpatients and either the type of hospital ownership or the number of hospitals competing in the market area. Additional analyses, which examined alternative explanations for these findings, failed to change the results. These findings raise serious concerns about the welfare of patients who are admitted to hospitals in highly regulated areas and those admitted to hospitals in relatively competitive markets. They suggest that it is important to incorporate quality-assurance procedures and systems to monitor patients' outcomes into public and private programs designed to contain costs or promote competition, or both.

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