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Written by: Bob Habasevich, PT on Saturday, January 28, 2012 Posted in: Inpatient Rehab

I am not one for making predictions without supporting facts, I’ll leave that to other pendants.  However, based upon the topics of discussion currently filling the Blogosphere, the frequency of comments can be summarized for some interesting speculation about what may come.  Looking to the coming year the post-acute rehabilitation landscape is filled with many issues and opportunities that will influence the future practice of healthcare.  Practice will be influenced by how it is paid. The growing concern for and focus upon quality and value will continue to drive the change from a payment system where the volume of care is the primary determinate of reimbursement and is replaced by a system that rewards effectiveness and value of care delivery as the determinate for reimbursement.

Cost-cutting will intensify
In rehab, as with the rest of healthcare, cost-cutting will become more challenging in 2012.  Cutting waste and saving money will become a major influence in care protocol execution.  Financial leaders will need the full support of the clinical staff. Be prepared yourself for some tough conversations and a lot of pushback.

Payments
Medicare sustainable growth rate formulas are under consideration with repeal of the proposed cuts in physician fee schedules. The Medicare Payment Advisory Commission recommended that Congress eliminate the existing SGR formula and replace it with a plan that includes reimbursement cuts to specialists and a pay freeze for primary care physicians. Either way, your physicians are likely to be unhappy.

There will be greater integration of payment systems with clinical performance and outcomes. 20 percent of health plans will leverage investment strategies started in 2010 and 2011 to integrate care, network and payment strategies. Integrating these systems will help differentiate health plans and will allow for an increase in analytics software investments to support outcomes-based payment programs.

Providers need be prepared for some difficult commercial payer negotiations. Increasing transparency of cost and provider practice data will elevate the payer’s interest in alternative payment approaches. Negotiations could morph and become a dialog about population management.  Moreover, the use of bundled payments will gain a stronger foothold.

Growth becomes an imperative
The survival of some hospitals and health systems is at stake. Cutting costs is not enough; organizations must grow to survive. Two areas CFOs will look at are service line growth and market consolidation.

Service lines like Inpatient and outpatient Rehabilitation Services have long been opportunities for financial leaders to enhance the bottom line. And while picking a service for its reimbursement is no longer prudent program development as reimbursements continue  to decline, growth is possible through patient volume. Baby boomers virtually guarantee increasing volumes.

The bundling of rehabilitation service lines with orthopedics and cardiovascular service lines is key to making these profitable in view of the greater volume in this boomer population. The evolution of joint-service lines become the first step attaining the efficiency requirements of integrated accountable care.

Market consolidation is the quickest way to grow. The post-acute care rehabilitation provider will not exist as an independent freestanding entity.  Rehab payment consolidation will be proposed by new resource/cost prediction models and bundled with acute episode payments.   The inpatient and outpatient Medicare payment models will move closer together as patient data and classification schema evolve new models accelerated by required data for payment initiatives.

Outpatient Payment Alternatives
CMS will evolve new payment methodologies for outpatient rehabilitation with greater attention to cost and effectiveness of care measurement.  Contracts will be written with value guarantees and performance assurance.  Payment will reward high quality performers and penalize poor performers.

Heightened Security Risk
Data and patient information security will become an increasingly greater concern as personal mobile devices infiltrate the hospital or practice environments where existing technology lags behind the accessibility and convenience of personal devices.

2012 promises a continuing challenge for the old guard rehab provider unwilling or unable to respond to the environment of quality-based change.