Health care reimbursement has a direct effect on the amount and type of care provided to patients by all health care providers, including WOC nurses. To understand the current status of the reimbursement for services provided by WOC nurses, it is helpful to first have an understanding related to the history of health care reimbursement, which is discussed briefly in this chapter. Also, this chapter discusses briefly the impact of WOC nursing on health care delivery and the implications of reimbursement on role justification and marketing of WOC nursing.
Prior to the 1900s, most Americans paid the provider directly for any medical care. In 1908, Workers' Compensation was introduced to reimburse for the medical care of certain federal employees injured when performing specific “hazardous jobs” (Preskitt, 2008). Throughout the early 1900s, many legislative acts were introduced to provide a national health care plan to reimburse medical care for Americans, but these legislative efforts failed (Preskitt, 2008).
During World War II, employers began to offer group health insurance plans to attract employees, and, by 1950, major medical insurance was available to most Americans employed by large businesses and corporations (Preskitt, 2008). As early as 1950, the need for medical payment coverage for the elderly and poor was recognized and Medicare and Medicaid legislation was passed into law in 1966. Later in 1973, Medicare benefits were expanded to include individuals with end-stage renal disease and all railroad retirees (Casto & Layman, 2006).
With the passing of the Medicare Act, the American Medical Association commented that the act would lead to “out-of-control spending” (Preskitt, 2008). Yet, the act remained essentially unchanged for nearly 40 years. Initially, Medicare reimbursement was based on a fee-for-service plan. When medical services were provided and billed, the Medicare payment amount was based on the fee schedule.
As health care costs escalated, managed care was developed to replace the fee-for-service reimbursement model. The first managed care insurance options emerged as health maintenance organizations. This was the first effort to maintain the quality of care while controlling cost. Prevention of disease/disease management was also integrated into this system under a fee-for-service plan (Preskitt, 2008). In this type of reimbursement, one payment is made as the reimbursement for an entire episode of care (Casto & Layman, 2006).
Medicare followed managed care's lead in prospective payment with the advent of the diagnosis related group (DRG) payment system in 1983. If a patient was admitted to the hospital, the payment for service was based on the admitting diagnosis and one payment covered all the care that was provided (Preskitt, 2008). While these efforts were initiated in all acute and long-term care areas, payment was based on the cost of service. The goal was to reduce the overutilization of service while providing necessary quality care (Casto & Layman, 2006).
In today's health care environment, efforts continue to control cost and improve the quality of care that is provided. An emerging payment plan that is currently being investigated by the Agency for Healthcare Research and Quality (AHRQ) is called a “Value-Based Insurance Design” (AHRQ, n.d.; Fendrick, Smith, & Chernew, 2010). Both government-based and private insurance companies are expanding research efforts to explore the cost of health care and determine if quality care is being provided in the appropriate setting (AHRQ, n.d., 2011). Currently, most acute care hospital services are reimbursed by a pay-for-performance plan, which uses quality measures to determine the payment amount.
Other payment alternatives, such as “bundled payments,” are also being investigated. Bundled payment is a method of payment to health care providers based on the predetermined expected costs of an episode of care (AHRQ, 2011). The bundles can be defined in varying ways, cover different periods of time, and include single or multiple health care providers, which might include some or all of the following options:
The intent of bundled payments is to decrease spending while increasing the quality of care. It is believed that bundled payments would create a financial incentive for providers to reduce the number and cost of services contained in the bundle (AHRQ, 2011). For example, in a bundled payment system, payments would be made to a group of providers for the care and treatment of a specified patient population throughout the course of an illness and providers would have discretion over how they utilized resources to treat the patient most effectively (AHRQ, 2011). If the services or therapy did not result in positive health care outcomes in a timely manner, the service provider would be motivated to reevaluate the services or therapy provided.
The health care environment of the 21st century is ripe for WOC nurses to explore opportunities to enhance their practice and gain recognition for their value as clinical experts. Although there are associated costs for the services provided by WOC nurses, an increase in positive patient outcomes will justify the cost of the services. Harris and Shannon (2008) demonstrated that the involvement of nurses with advanced wound and ostomy skills in community-level, chronic and acute wound care was associated with lower overall costs due to a reduction in the amount of time required for 100% closure of wounds and fewer nursing visits.
Achieving effective clinical patient outcomes and reducing financial outlays are critical factors in the delivery of health care that directly affect justification for the utilization of WOC nurses. Turbyville, Saunders, Tirodkar, Scholle, and Pawlson (2011) propose that health plans and practice can create higher value by increasing the quality of care, without large increases in the use of resources, or by maintaining the same level of quality with decreased resources. Therefore, when the focus is to optimize the effectiveness of clinical services and the staff, the WOC nurse must be able to prove effectiveness by obtaining the desired outcomes in a timely and cost-effective manner (eg, patient independence in ostomy care, documentable progress in wound healing, or correction and/or effective management of continence disorders). Recent research has demonstrated that patients in home health care agencies who were cared for by WOC nurses, compared to agencies without WOC nurses, had better outcomes for pressure ulcers, lower extremity ulcers, surgical wounds, urinary incontinence, bowel incontinence, and urinary tract infection (Westra, Bliss, Savik, Hou, & Borchert, 2013). Also, research has shown that despite caring for patients with the most severe wound and continence problems, WOC nurses are effective in achieving positive health outcomes for these patients (Bliss, Westra, Savik, & Hou, 2013).
In addition, WOC nurses must create collaborative work environments with case managers and other decision makers within health care delivery systems. To optimize clinical outcomes, WOC nurses are well prepared for a shift to capitation or value-based payment systems, because their care is focused on the following:
To justify and market themselves effectively, WOC nurses first need to understand the current payment mix within their facilities and agencies. For example, home health care may be capitated in terms of the number of visits and payment per visit or by a capped dollar amount paid per episode of illness. Also, WOC nurses need to know if the capitated payment includes the costs of supplies or if the supply costs are billed/reimbursed separately (Fendrick et al., 2010).
In today's health care environment, the goal is to maintain health and/or to manage illness and injury as cost-effectively as possible. For example, the goal in managing a patient with a pressure ulcer would be to heal the ulcer while minimizing visits and supply costs. An important question is: “How can we improve the bottom line?” An organization's financial bottom line is determined by comparing its expenses to its revenue. The bottom line can be enhanced either by increasing revenues or by decreasing costs.
There are 3 key steps that WOC nurses can follow for effective role justification and marketing in a capitated or value-based system. The first step in effective role justification and marketing within a capitated or value-based system is asking the right questions to learn about the payment of services.
Suggested questions include the following:
The second step in justifying the WOC nurse's role in a managed care or value-based system is to determine specific methods to contribute to both positive patient outcomes and reduced costs. Addressing the potential to increase revenue is an important attribute of WOC nursing care.
The third step in justifying and marketing the WOC nurse's role is to collect data regarding patient outcomes and cost of care. Sample data may include the following:
In summary, to effectively market the WOC nurse's role in a managed care or value-based health care system, the WOC nurse must:
It remains unknown what the full impact will be of the Patient Protection and Affordable Care Act of 2010 on the delivery and reimbursement of health care services. The goal of the act is to provide quality, affordable care to all Americans. It is anticipated that if no further changes are made to the act, this coverage will expand to cover the currently, uninsured population and that the trend to pay-for-performance and value-based reimbursement will continue (Sherman, 2012). WOC nurses need to continue to monitor the changes in coverage and reimbursement and can play an important role in helping to reduce costs while ensuring high-quality care.
On behalf of its members, the WOCN Society is committed to advancing legislative activity that promotes the benefits of WOC nursing for individuals with WOC care needs. The WOCN Society advocates public policy positions, which advance access to care for people with WOC disorders. On an ongoing basis, the WOCN Society's National Public Policy Committee, along with the Society's legislative consultants in Washington, works to inform members of Congress about WOC issues. The WOCN Public Policy & Advocacy Health Care Agenda is available on the Society's Web site under the Advocacy & Policy News section (http://www.wocn.org/AdvocacyPolicyNews). Also, the WOCN Society has prepared the WOCN Advocacy and Grassroots Toolkit as a resource for its members to enhance their own, individual efforts at public policy/advocacy. A copy of the toolkit is provided in Appendix V and is available on the Web site: http://www.wocn.org/GrassrootsToolkit.
Agency for Healthcare Research and Quality. (n.d.). Theory and reality of value-based purchasing: Lessons from the pioneers. Retrieved November 2012 from http://www.ahrq.gov/legacy/qual/meyerrpt.htm. Please advise
Agency for Healthcare Research and Quality. (2011). Closing the quality gap series: Revisiting the state of the science. The effects of bundled payment strategies on health care spending and quality of care. Retrieved November 2012 from http://effectivehealthcare.ahrq.gov/ehc/products/324/716/Closing-Quality-Gap-Bundling_Protocol_20110623.pdf
Bliss, D. Z., Westra, B. L., Savik, K., & Hou, Y. (2013). Effectiveness of wound, ostomy and continence-certified nurses on individual patient outcomes in home health care. Journal of Wound, Ostomy and Continence Nursing, 40(2), 1–8. doi:10.1097/WON.0b013e3182850831
Casto, A. B., & Layman, E. (2006). Principles of healthcare reimbursement. Chicago, IL: American Health Information Management Association.
Fendrick, A. M., Smith, D. G., & Chernew, M. E. (2010). Applying value-based insurance design to low-value health services. Health Affairs, 29(11), 2017–2021. doi: 10.1377/hlthaff.2010.0878
Harris, C., & Shannon, R. (2008). An innovative enterostomal therapy nurse model of community wound care delivery: A retrospective cost-effectiveness analysis. Journal of Wound, Ostomy and Continence Nursing, 35(2), 169–183.
Patient Protection and Affordable Care Act of 2010, H.R. 3590 (2010). Retrieved November 2012 from http://www.gpo.gov/fdsys/pkg/BILLS-111hr3590enr/pdf/BILLS-111hr3590enr.pdf
Preskitt, J. T. (2008). Health care reimbursement: Clemens to Clinton. Proceedings Baylor University Medical Center, 21(1), 40–44.
Sherman, R. O. (2012). The business of caring: What every nurse should know about cutting costs. American Nurse Today, 7(11), 32–34.
Turbyville, S. E., Saunders, R. C., Tirodkar, M. A., Scholle, S. H., & Pawlson L. G. (2011). Classification of health plans based on relative resource use and quality of care. American Journal of Managed Care, 17(8), e301–e309. Retrieved November 2012 from http://www.ajmc.com/articles/AJMC_11augTurbyville_e301to309
Westra, B. L., Bliss, D. Z., Savik, K., Hou, Y., & Borchert, A. (2013). Effectiveness of wound, ostomy, and continence nurses on agency-level wound and incontinence outcomes in home care. Journal of Wound, Ostomy and Continence Nursing, 40(1), 25–33. doi:10.1097/WON.0b013e31827bcc4f