Case Rate Reimbursement

Case rate reimbursement is a payment to the provider based on a preagreed fee that includes all aspects of care regardless of additional various costs incurred for the care. These global fees are commonly used in surgical cases. For example, a case rate may include preoperative care and one or two postsurgical visits. Although this is not an actual financial “risk” to the provider, the costs for the entire spectrum of care for some cases may be higher than what the provider gets paid. Efficiency and coordination of care are essential to make these payments beneficial for both the payer and the provider.

The advent of extensive cardiac surgical advances may illustrate the issue.

The managed care company contracts with a provider for coronary artery bypass graft (CABG) at $25,000 per case. The lives covered in the managed care contract would be included as potential cases. The health range in this population would vary greatly from very frail with many health care problems, to hearty with few or no health care problems. Two individuals come to the hospital, both for the CABG surgical procedure. One is a 40-year-old man with no prior medical history except high cholesterol. The other is a 70-year-old man with a history of diabetes, hypertension, and two myocardial infarcts (MIs). It is not too hard to imagine that the younger patient may consume fewer resources than the older patient with the more extensive medical history. The provider is paid the same for both patients, but one uses more resources and time for the same surgery.

The managed care companies and the providers (physicians and hospitals) contract the rates for this reimbursement scheme to benefit all parties. The costs of care have been lowered by hospitals by assuring that the presurgical testing is completed with a standard set of laboratory tests, EKGs, and radiologic services. Standard sets of orders and services are extremely important in this environment to establish an efficient and timely care pattern. Clinical pathways may be used to establish medically sound and cost-conserving services.

Clinical pathways are created by the health care teams, including the physicians and nursing staff as well as other health care providers involved in the care of the specific procedure or disease in question. The team looks at present practice at the hospital and does a literature search to identify the best practices in other institutions. They then generate the pathway, delineating what the care will be for each step or day of care. Order sets with all the appropriate treatments in the correct sequences are completed. After training and “buy-in” from the remaining team members, the clinical pathway is ready for use. It is important to recognize that a physician champion must verbalize to the physicians the need for using the pathway. In addition, the chairs of each of the medical departments must endorse the clinical pathway for the selected population. Data from experience with the pathway constitute important feedback to the physicians and teams, to measure positive outcomes and assess for any changes that may be needed. Good information support systems and administrative commitment to the clinical pathways assure decreased costs and standardized, predictable quality, making case rate reimbursement a viable and reasonable payment method.

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