A cost containment program targeting home infusion drug therapy - includes related information

Physician Executive, Nov, 1994 by John W. Richards, Jr., William J. Taylor

In 1980, only eight diagnoses could be treated in the home. In 1983, that number had risen to 30. By 1991, the number had increased to more than 900. It is estimated that more than 30 percent of what is being done in the hospital today will take place in the outpatient setting during this decade. Specifically, the home infusion market grew from $875 million in 1987 to more than $2.53 billion in 1991, and it is estimated to have been more than $4 billion in 1993. This single component of the home care industry is expected to continue to grow at an annual rate of nearly 30 percent.(*)

Home drug infusion technologies (HDITs) are becoming an integral part of medical care. HDIT is indicated for the stable patient who requires slow, repeated infusions of drugs or nutrients; therefore, its use is applicable in patients encountered in nearly every discipline. When used appropriately, it is safe and effective for a wide range of patients and disease states. In addition to proper patient selection, HDIT use requires a multidisciplinary effort among the clinical pharmacist, the skilled nurse or other trained care giver, and the patient's physician.

The number of companies providing HDIT has grown exponentially over the past decade. This is likely due, at least in part, to increases in price controls on other health care services by payers; doser scrutiny of inpatient care quality by the Joint Commission on Accreditation of Healthcare Organizations; lack of federal and state regulations; lack of formal references for usual and customary pricing; and lack of familiarity with new health care delivery settings, technology, and protocols among insurance claims reviewers and case managers.

The fees that home care companies charge for their goods and services are unregulated and generally not subject, as hospital-based treatment is, to diagnosis-related group (DRG) or precertification requirements. Moreover, types of therapy, components of therapy, and standards for therapy are numerous, varied, and constantly changing. As a result, no pricing standards exist, and payers find themselves paying widely varying prices for similar services within and across local, state, and regional boundaries.

Because of these factors, a computerized database for pricing has not been and may never be developed. Further, because of rapidly changing technology, the ever-increasing number of conditions that are being treated at home, and the subjective nature of decisions as to which adjunct components of therapy (pumps, filters, lines, catheters, nursing visits, blood draws, etc.) to use with the drug, it would be difficult, if not impossible, to maintain any degree of accuracy. However, by having a multidisciplinary team comprising experienced clinicians, reimbursement experts, and claims analysts who actively work in the field evaluate each scenario on a case-by-case basis, reliable and meaningfull estimates of reasonable pricing can be derived.

Study Design

In 1989, a physician, a doctor of pharmacy, and a senior executive from a small group insurer met to discuss possible ways to deal with the mounting costs associated with the care of insureds who were HIV positive. As a service to the insurance company and its case managers, a consulting service on home care pricing was begun. Because there was no database to consult regarding reasonable and customary prices, a target pretax margin of 20 percent was used as the standard.

In cases where therapy had already been administered or initiated, the actual HCFA 1500 and UB 282 forms submitted for payment by the home care providers were evaluated by one or more members of a multidisciplinary team consisting of a doctor of pharmacy, a clinical pharmacist, a home care nurse, a metabolic nutrition specialist, a claims analyst, a reimbursement specialist, and a physician. Insurance company claims analysts and case managers faxed the HCFA 1500 and UB 282 forms to the team, along with pertinent clinical information regarding patients. Formal written case consultations, which included recommended pricing structure, were faxed back to the case manager. The process was led and coordinated by the doctor of pharmacy, who worked directly with the case manager if further discussion was needed. The case manager would then call the provider and suggest alternate pricing for the services.

This protocol evolved to require preauthorization for home care services to the client population. Part of the preauthorization process was for the case manager to fax a "services description and quote sheet' to providers prior to authorization. Once the sheet was completed, signed, and forwarded to the case manager, he or she faxed it to the team for evaluation. The completed consult was faxed back to the case manager, who would then discuss the case with the provider to establish the price for services, a more appropriate level of service, or alternate methods for achieving the same therapeutic goal. These discussions took place prior to authorization of the therapy. The methodology was established with the goal of longitudinally tracking specific case data sets over time. All consults were identified by patient initials and the case manager name and were numbered sequentially. All original paperwork for each case is kept on file.