She began by giving us an overview of the PPS changes, including a graph showing the average case weight mix for each of the last seven years. Starting at about 1.3 in 2000, Case Weights dipped during 2001, 2002, and 2003 and then trended upward beyond the starting point. This graph shows the data points that led to the concern for "Case Mix Creep" that we heard Bill Dombi talking about. CMS has written a rule that will reduce home health payments by 2.75% to account for this "creep" in case mix.
Amanda then went on to talk about the industry impact of the new PPS based on that available data and some practices that OCS has identified.
Looking at the projected case weight by agency type and translating that into dollars, she was able to project the following financial changes per episode:
- Urban Agencies - +$28
- Rural Agencies - -$131
- Not For Profit - +$99
- For Profit - -$93
- Free Standing - -$22
- Facility Based - +$63
The overall range of the impact will be plus or minus 5%, but there will extremes where agencies see a swing of plus or minus 30%.
Some Snappy Facts:
- 50% of agencies will do better
- Large, Not For Profits have the greatest magnitude of positive change
- Organizations with the most positive change have increased management and staff stability
- Organizations with the most positive change have disease management programs and point of care in place
- Organizations with the mose positive change are more likely to have case management in place
The Impact on Sales & Marketing
I was very interested to hear Amanda's comments on how these changes will affect sales and marketing in successful home health care organizations. Since the beginning of PPS, we've been saying that your agency could increase its case mix weight and revenue by focusing your sales and marketing efforts. To do that, you need to understand and apply the principles that drive the PPS reimbursement system.
Amanda made several points throughout here presentation the show the increased need to focus your sales efforts:
- One of the attributes of home health organizations with the highest profitability is that they have a formal marketing department
- In adjusting to the new PPS, successful companies will revise their sales and marketing plans to identify what patients and referral sources to target
- Industry leaders interviewed by OCS are planning a number of additional strategies, including changing their marketing focus.
If you would like some assistance in refocusing your sales and marketing plans and training your sales team to go after the right target patients and referral sources, give us a call at Leading Home Care at 502-339-0653, or send an email to Stephen at leadinghomecare.com