Guidelines for Development and Reimbursement of Originating Site Fees for Maryland s Telepsychiatry Program Prepared For: Executive Committee Meeting 24 May 2010 Serving Caroline, Dorchester, Garrett, Kent, Queen Anne s, St Mary s and Talbot Counties Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 1
Findings Nationally, a majority of states reimbursing through both Medicaid and Medicare offer some form of reimbursement to originating sites; The originating site fee included in CMS regulations, $26, is highly reflective of the underlying cost per client session (determined by time and motion studies); When adjusted for survey activities (evaluations component tied to the HRSA grant) the adjusted rate, $24.9 was almost identical to the CMS rate ($24) for 2010. The most labor intensive phase in the process occurs during the appointment phase, 52% of the minutes per client, compared to pre-appointment and post appointment phases, both less than 25% of the process. This phase is highly operations intensive versus pre-appointment and client follow up activities, which are largely administrative and more variable on a weekly basis. The most labor intensive step in the entire process is Monitor to ensure confidentiality/ availability should support need arise on average 40.83 minutes. The total hours reported across individual sites is relatively stable and consistent with the average hourly rate. Some variability amongst clinics was observed within individual steps, but balanced out between processes. Since the fee is based on the entire process, the overall hours were a more significant measure. Recommendations o An originating site fee at an enhanced rate of $26.07 is reimbursed to sites on the following basis: o The fee is reimbursed per half hour of client time, i.e. $13 per half hour so as to equalize the rate across new and follow up clients and not create unintended incentives to schedule a greater number of clients over fewer clients requiring more time; o Reimbursement should be only for client sessions completed. Reimbursing for clients seen is an incentive towards full utilization of hours, and increased appointment completion rates, which will consequently reduce costs per client; o Recent collaboration between sites having excess hours and those needing hours has been rewarding to the initiative. Sharing of hours should carry an incentive of 50% of the originating site fee for the clinic sharing, and 50% for the clinic requiring hours, contingent appointments being kept. Although neither clinic may claim full reimbursement, both clinics benefit: The Lending clinic, with excess capacity (unscheduled hours) would otherwise have limited opportunity for reimbursement whereas the Borrowing clinic has extra client time as well as a partial reimbursement, for a nominal premium. o Fees will be processed on a monthly basis with adequate reporting of appointment outcomes. Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 2
Purpose The purpose of this report is to recommend a reimbursement formula for originating sites in Maryland s Telepsychiatry Initiative on a per client seen basis for incremental costs associated with the initiative. Imminent regulations to reimburse telepsychiatry in Maryland s Public Mental Health System (PMHS), COMAR 10.21.30, propose an originating site fee fixed by CMS at $24 for calendar year 2010 1. This report examines and recommends the following: Proposed Fee Structure: Examine the extent to which proposed CMS rate ($24 billable under code Q3014) is reflective of underlying site costs/ activities; and recommend a formula based on findings. Reimbursement Method: Apply a reimbursement mechanism which will: o Incentivize clinics toward increased utilization and appointment ratios- 0.7 and 0.72, respectively 2 ; o Promote sustainability, recognizing that clinical sites will play an instrumental role in championing the growth and presence of telepsychiatry each of the seven rural counties; o Promote alignment across multiple sites, integrating client referral and health care delivery systems, and linking all partners to shared goals and outcomes; o Prepare clinics for the passage of COMAR 10.21.30, with a rate and process of approval similar to a third party payer system within the PMHS. Background The Maryland Telepsychiatry Initiative was launched in December 2008, and has served 189 consumers, with 531 client sessions to date. The network partnered with clinical sites in seven rural counties across Maryland (Caroline, Dorchester, Kent, Garrett, Queen Anne s, St Mary s and Talbot counties). In the course of a) scheduling clients, b) conducting sessions, and c) client follow up activities, clinical sites (referred to as originating sites ) incurred incremental costs associated with the initiative. Strategies to reduce cost burden and reimburse originating sites were clearly outlined in the Network s Action Plan adopted in January 2011 3, recommending that partners Document Administrative Costs in each County. Plans to begin site reimbursements in grant year 2011 were in recognition of: Administrative costs borne by originating sites; Originating sites integral role in client referral and service delivery; An originating site fee specified in Maryland s pending regulations COMAR 10.21.30.(See Appendix A, Professional shortages in the seven counties and implications of COMAR 10.21.30) Ongoing stewardship and contributions by sites in the development of a blue-print model for telepsychiatry in Maryland. 1 http://news.aapc.com/index.php/2009/12/cms-sets-telehealth-site-facility-fee-payment, Transmittal 615 see page 3 2 Tying reimbursement to clients seen should increase utilization and appointment rates, consequently reducing cost per client 3 The Telepsychiatry Action Plan was submitted in January 2010 as part of the Health Resources and Services Administration site review process, consistent with goal 2A Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 3
National Originating Site Reimbursement Trends Over the past ten years reimbursement of telemedicine within the PMHS has fuelled the expansion of the modality across states and diverse segments of health care, particularly behavioral health care 4. By 2007, 35 states had adopted regulations to reimburse telemedicine through Medicaid 5. Findings from a study of states reimbursing Medicaid in 2005 6 (28 at the time), revealed all that except one state, Arizona, extended some form of reimbursement to both the originating site in addition to the distant site. A number of states reimburse under CMS fixed originating site reimbursement code Q3014 (described in a later section) however the method of reimbursement is not consistent across states 7. The map in Figure 1 identifies states reimbursing through Medicaid highlighting those states which reimburse originating sites. Figure 1: Trends in Medicaid Reimbursement of States and Reimbursement of Originating Sites Reimburses through Medicaid Reimbursement at both originating and distant No reimbursement through Medicaid????????? Subsequent to the release of the publication, a number of states- Nevada, Colorado, Tennessee, Alabama, Missouri, Wisconsin, and South Carolina have begun to reimburse through Medicaid. Wyoming and Oregon both offer reimbursement though Code Q3014 8, however data was not located for the other states. 4 Reimbursement Reimbursement Report, Office for the Advancement of Telehealth, The Center for telemedicine Law, October 2003 5 Telemedicine Reimbursement: A National Scan of Current Policies and Emerging Initiatives, California Telemedicine and ehealth Center, April 2009 6 Telemedicine for CSHN: A State-by-State Comparison of Medicaid reimbursement Policies and Title V Activities, Telehealth Connections for Children and Youth Institute for Child Health Policy University of Florida, Lise Youngblade, PhD, et al, July 2005 7 Despite extensive literature review and inquiries it is not easily determined which and how many states reimburse under HCPCS Q3014, it is only known how many extend some form of reimbursement to both Distant and Originating sites 8 Oregon; http://wdh.state.wy.us/media.aspx?mediaid=5537 Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 4
Maryland s Proposed Originating Site Fee under Code Q3014 (COMAR 10.21.30 provision 0.9) The Originating Site facility fee described in COMAR 10.21.30 is: Set by the Center for Medicare and Medicaid Services (CMS), published in the Medicare Physician Fee Structure Final Rule and increased annually in accordance with the Medicare Economic Index 9. Reimbursable at the lesser of 80% of the actual charge or $24 per consumer seen, using code 10 Q3014 billable as a Part B payment. Utilized extensively by states in Medicare reimbursements (Maryland??) According to COMAR 10.21.30, fees paid to originating sites can be used for maintenance of equipment, dedicated line charges, programmatic, administrative or contingency support at the originating site. Data from Originating Sites The rationale for quantifying site costs was firstly, to determine the extent to which site fees proposed in a fees for service setting are reflective of actual costs incurred by clinics in the Network project; and secondly as a technical assistance guideline ensuring prospective telepsychiatry providers are aware of site costs and can use the fee as a proxy in budgeting and projecting expenses over time. Two approaches were used to analyze operational steps and evaluate site costs. Firstly, Time and Motion Studies were conducted using empirical data from sites to estimate hours per client at consecutive stages in the service delivery process. Once average time was calculated, Activities Based Costing (ABC) was applied to determine a dollar fee estimate and identify cost drivers at each stage of the process. To achieve consistency across sites, an optimal model based on a number of cost reducing steps (adopted from the action plan) was applied across sites. Restructuring of operations and impact on variable cost per client are described below: Reporting systems: By February 2010, six of the seven sites adopted SharePoint, a common reporting system. SharePoint is a HIPAA compliant system through which clinical data/ records can be accessed and exchanged by providers, clinics and coordinators obviating the need to fax information. Using SharePoint notes and records can be attached to electronic appointment schedules, similar to an EMR. On account of the capabilities inherent to SharePoint, faxing activities have been eliminated from this analysis. Although clinics are afforded flexibility in their reporting system, findings are based on the assumption of optimal use of SharePoint. Survey Administration: Consistent with the action plan and sanctioned by the data committee, the number and frequency of client surveys was reduced. Initially a shorter survey was administered after each client session and a longer outcomes was completed by clients after every third session. Subsequently the two surveys were combined into a single survey administered after every third client visit. The time reported for surveys was conservatively estimated as half of the time previously reported. 9 CMS Manual system Pub 100-04, transmittal 1635, Change request 6215, November 14, 2008 10 CMS Sets Telehealth Site facility Fee Payment, December 31 st 2009 http://news.aapc.com/ see also CMS transmittal R6150 page Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 5
Time and Motion Study Due limited data publically available for similar initiatives, the study relied on empirical data, i.e. data collected from clinical sites based on their own experience. In approaching the study it is recognized that there is both a referral and service delivery component to client service at originating sites. As shown in figure 2, three broad process flows, or stages were identified, each involving a series of steps, namely: Pre-appointment stage: Administrative in nature-completion of client referral forms, exchanging client notes/ records with the provider, scheduling appointments. Appointment Phase: Operations intensive- equipment set up and shut off, client orientation of the equipment, a staff member being available in event of an emergent situation or equipment failure. The protocols and standard operating procedures detail requirements. Post Appointment Activities: Follow up activities - reporting appointment outcomes (kept, cancelled, rescheduled), administering satisfaction survey, and following up on post appointment contingencies- prescriptions, filing information, etc. To ensure comparability across clinics, data was collected in a uniform, consistent manner, using the form below, which listed each stage and step in the operational process. Figure 2: List of Process Stages and Activities (Form given to clinical sites) Stage 1-Pre-Appointment Minutes Scheduling appointment- discussion with client Entering information- referral forms, schedules Placing reminder call Stage 2-During Appointment Minutes Prepare equipment for use Accompany clients to Room with equipment Orientation on use of equipment Monitor to ensure confidentiality / Availability should need for support arise Turn off and Secure equipment after client leaves Stage 3- After Appointment Minutes Client satisfaction survey ---Reduced the number of surveys administered by one third Follow through on individual client Clinics were notified of the implications of the study, via email and during site visits, and site personnel were asked: To review and assign time to activities based on the experience of the staff member/s most frequently engaged in the activities; To furnish the combined salary and benefit rate for the staff member/s primarily involved in the performing the operational/ administrative activities. Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 6
Analysis and Findings Six out of seven clinics responded and aggregate results are detailed in Table 1, which breaks out output by process phase and activity. Sub-totals are assigned to process phases. Table 1: List of Steps for Sites from Scheduling to Outcomes Reporting Pre-Appointment (scheduling and discussion) Output Scheduling appointment- discussion with client 12.83 Entering information- referral forms, schedules 8.83 Placing reminder call 3.15 TOTAL 24.82 During Appointment Output Prepare equipment for use 4.33 Accompany clients to Room with equipment 2.33 Orientation on use of equipment 1.80 Monitor to ensure confidentiality /availability should support need arise 40.83 Turn off and Secure equipment after client leaves 1.67 TOTAL 50.67 After Appointment Output Client satisfaction survey 3.83 Follow through on individual client 17.20 TOTAL 21.03 Average Salary and Benefits $ 34376.40 Average Hourly rate 16.18 Average Time per Client (hours) 1.61 hours Average Salary per Hour $16.18 Average Expense per Client $26.04 Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 7
Defining a Hourly Rate- Summary of Activities Based on data captured in Table 1, activities are summarized in a Gantt chart (below) detailing cumulative stages of completion for each process Pre Appointment Scheduling, entering data 24.82 minutes /96.52 = 26% During Appointment 26% C Equipment set up, orientation, monitoring, shut off 50.67 minutes/ 96.52 = 52% Post Appointment 78% Complete Survey, follow through 21.03 minutes/ 96.52 = 22% As the chart reveals, the most labor intensive step is during the appointment, and the most significant cost driver in that activity grouping is staff member availability in event of equipment failure or emergent issue arising, consistent with clinical protocols. The most frequently recurring response, or mode was 60 minutes, and the average time spent was 40.83 minutes, ranging from a minimum of 5 minutes to a maximum of 60 minutes. Overall there was not a significant degree of variability observed in hours per client for entire the process. The range observed was 1.35 <=x <= 1.95. As shown in figure 3, there is a little kurtosis, in that the average time per client 1.61 is somewhat skewed toward the maximum score, 1.95. Although there is a considerable interval between the minimum and maximum, the average hours per client is only slightly higher than following grouping of cut points which clusters around 1.57 (<4 minutes). Aggregate minutes converted to hours Variability observed between processes and steps, had a propensity to balance out over the entire process, yielding a reliable measure of overall hours per client. Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 8
Cost Analysis Activities Based Costing Activities based costing was used to add the cost component to the analysis. Having determined a time factor of 1.61 per client, a cost per client analysis was completed by asking that clinics furnish hourly salary and benefits rate of the staff member/ s primarily involved in the telepsychiatry activities. The average salary per clinic was found to be $16.18 per hour. The $16.18 was applied to 1.61, the average number of hours per client, to conclude a rate of $26.03 per client. Notably, the $26.03 was similar to the originating site facility fee fixed by CMS at $24 per client. In fact the $2 enhancement in rate was accounted for by survey activities, per calculation. 96.52 minutes (hours per client converted to minutes) less 3.83 minutes (Survey) = 92.69 minutes (1.54 hours per client) 1.54 hours * $16.18 per hour = $24.9 per client compared to $24 fixed by CMS Reimbursement Policy After determining a rate structure of $26 per client, careful consideration of reimbursement mechanism yielded the following insights: a) Reimbursement to be based on clients seen Reimbursement based on clients served incentivizes clinics to increase both the utilization and appointment completion rates, ultimately driving down the third party payer cost per client. b) Reimbursement to be quoted and equalized at a half hourly rate: Applying a direct rate of $26 per client could have unintended consequence of offering a greater reimbursement for scheduling four follow up clients versus two one hour clients. Equalizing the reimbursement rate for each half hour set at $13.02 per half negates this possibility. Therefore in designing the mechanism to reimburse it should be expressed as $13.02 per half hour of client time instead of $26 per client c) Reward clients for cost sharing activities: Conclusion Recently clinics with excess hours have begun to share time with other clinics needing hours, yielding higher utilization and lower costs. To encourage these collaborations it is recommended that reimbursement be split between the two clinics entering into the sharing arrangement. An originating site reimbursement fee is an effective approach to building a comprehensive telepsychiatry infrastructure inclusive of all parties, and one which aligns all partners to common goals and outcomes. Partners are mindful however of the following caveats which underscore some of the reimbursement methods chosen: Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 9
The mechanism for reimbursement must be structured as a single rate per half hour client time used, so as not to differentiate between type of client scheduled nor compromise client access; Ensure that sharing arrangements are rewarded under the cost reimbursement mechanism. Effective June 2010, an originating site fee of $13 will be reimbursed to clinics per half hour of client session time. Although it has been previously stated, Table 2 presents a snapshot summary of recommendations and rationale underscoring the proposed originating site fee. Table 2 Captures a Summary of Recommendations Recommendation The fee is only applied to clients seen The fee is applied per half hour of client time versus per client seen For clinics in time sharing arrangements, the clinic willing to share the hours will share the originating site fee equally with the clinic gaining the hours Discussion with clinics Rationale Incentivizes increased utilization and appointment rates which in turn drive down telepsychiatry costs per client (Producing a net gain over fee paid Est. at $133-rate). Partners will track changes over time to evaluate the net gain. To ensure that there is no unintended incentive to schedule follow up clients over new clients, the fee must be reimbursed at a single rate per half hour of client time Sharing of hours has proved an effective system for increasing the utilization and ensuring productive use of provider time, matching excess capacity with needed capacity. The originating site fee reimbursement should continue to promote this relationship. If the lending clinic is unable to schedule clients, they may still gain a partial fee for their willingness to share hours. Similarly, although the borrowing clinic is not fully compensated, they have received needed hours over those available to other clinics and the 50% is a premium based on the need. Extensive discussion needs to take place between coordinators and clinics to ensure appointment outcomes are reported in a timely manner, so that reimbursement can be efficiently processed. Clinics make every effort to ensure that client appointments are kept, however the use of a fee based on appointments kept may reinforce the more controllable factors in appointment completion, for example placing reminder calls and notifying coordinator of transportation needs in advance of appointments. Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 10
APPENDIX A Professional Shortages in Counties Served and Implications of COMAR 10.21.30 Table 2 evidences the extreme shortages in psychiatry in the counties served under the Telepsychiatry initiative. Anticipated retirements of 8 out of 20 practicing psychiatrists over a five year period will compound the already chronic shortages in these persistently underserved counties. Table 2: Maryland Physician Shortage Study- Psychiatrist FTEs by Age Group and County Total Physicians FTE ALL <65yrs >65 yrs ALL <65yrs >65 yrs Caroline 1 -- 1 1 -- 1 Dorchester 5 3 2 2.7 1.7 1 Garrett 2 1 1 1.1 1 0.1 Kent NA NA NA NA NA NA Queen Anne s 2 1* 1 1 -- 1 St Mary s 4 4 -- 4 4 Talbot 7 4 3 4.4 2.4 2 Total 20 12 8 14.2 9.1 5.1 Source: Maryland Hospital Association, 2008 * Subsequent to the release of the study, 1 FTE was added at Queen Anne s County Enactment of regulations COMAR 10.21.30 is one measure to directly increase the supply of physicians to these areas and alleviate barriers confronting PMHS consumers, including inordinate waitlists, lack of access to specialty care, travel time and distance to access care, interim emergency department utilization for care, lengthier inpatient stays- all symptomatic of mental health provider shortages. Authored by Jean Honey Telepsychiatry Project Coordinator, MSMHS Telepsychiatry Network Initiative 11