PHILHEALTH CIRCULAR NO.31 ALL CASE RATES POLICY NO. 1 IMPLICATIONS FOR OUR PRACTICE

PHILHEALTH CIRCULAR NO.31PHILHEALTH CIRCULAR NO.31ALL CASE RATES POLICY NO. 1ALL CASE RATES POLICY NO. 1

IMPLICATIONS FOR OUR PRACTICEIMPLICATIONS FOR OUR PRACTICE

PHILHEALTH CIRCULARPHILHEALTH CIRCULARNO. 0031, S 2013NO. 0031, S 2013

• All Case Rates (ACR) Policy No. 1All Case Rates (ACR) Policy No. 1

• Governing Policies in the Shift of Provider Governing Policies in the Shift of Provider Payment Mechanism from Fee-for-Service to Payment Mechanism from Fee-for-Service to Case-Based PaymentCase-Based Payment

• Published October 31, 2013Published October 31, 2013

• Implementation Date November 15, 2013Implementation Date November 15, 2013

RATIONALERATIONALE

• Republic Act 7875 (amended) Article 1 Section 2Republic Act 7875 (amended) Article 1 Section 2

• Guiding PrinciplesGuiding Principles

1.1. Universality - Coverage for the entire population Universality - Coverage for the entire population with at least a basic minimum package of health with at least a basic minimum package of health insurance benefitsinsurance benefits

2.2. Equity - provide Uniform Basic BenefitsEquity - provide Uniform Basic Benefits

3.3. Effectiveness - balance economical use of Effectiveness - balance economical use of resources with quality of careresources with quality of care

RATIONALERATIONALE

• Republic Act 7875 (amended) Article 1 Section 2Republic Act 7875 (amended) Article 1 Section 2

• Guiding PrinciplesGuiding Principles

1.1. Cost Sharing - continuously elevate its cost sharing Cost Sharing - continuously elevate its cost sharing schedule to ensure that costs borne by members schedule to ensure that costs borne by members are fair and EQUITABLE and that the charges by are fair and EQUITABLE and that the charges by health care providers are REASONABLE…health care providers are REASONABLE…

2.2. Cost Containment - incorporate features…in its Cost Containment - incorporate features…in its design and operations and provide a viable means design and operations and provide a viable means of helping the people pay for health care servicesof helping the people pay for health care services

IMPLICATIONSIMPLICATIONS

• Lacks a definition of some termsLacks a definition of some terms

• ““basic minimum package of health insurance basic minimum package of health insurance benefits”benefits”

• Equity = “uniform basic benefits”Equity = “uniform basic benefits”

• Effectiveness: economical use of resources ⚖ Effectiveness: economical use of resources ⚖ “quality of care” “quality of care”

• We should define standards of eye care (not We should define standards of eye care (not necessarily CPG)necessarily CPG)

IMPLICATIONSIMPLICATIONS

• Disturbing facetsDisturbing facets

• Effectiveness: economical use of resources ⚖ “quality of Effectiveness: economical use of resources ⚖ “quality of care” care”

• We should define “quality of care” and enumerate the We should define “quality of care” and enumerate the requisites to the provision of that qualityrequisites to the provision of that quality

• Cost sharing - “to ensure that costs borne by Cost sharing - “to ensure that costs borne by (all)(all) members members are fair and equitable and that charges by health care are fair and equitable and that charges by health care providers are providers are reasonablereasonable…”…”

• extends beyond NBBextends beyond NBB

• may lead to fixing out-of-pocket costsmay lead to fixing out-of-pocket costs

FEE FOR SERVICE (FFS) SCHEMEFEE FOR SERVICE (FFS) SCHEME

• Limited PHIC from fully Limited PHIC from fully realising the intents of realising the intents of guiding principlesguiding principles

• FFS leads to FFS leads to

• prolonged hospital staysprolonged hospital stays

• over-utilisation of over-utilisation of diagnostic proceduresdiagnostic procedures

• provision of unnecessary provision of unnecessary and inefficient health care and inefficient health care service without additional service without additional valuevalue

FEE FOR SERVICE (FFS) SCHEMEFEE FOR SERVICE (FFS) SCHEME

• Inequity in claims paid for Inequity in claims paid for similar conditions when similar conditions when comparing payments to comparing payments to private and government private and government health care institutions health care institutions (HCIs)(HCIs)

• PHIC’s support value PHIC’s support value average <30%average <30%

• Indigent patients still have Indigent patients still have to pay cost-shares for to pay cost-shares for services even in services even in government HCIsgovernment HCIs

GLOBAL TREND TOWARD UHCGLOBAL TREND TOWARD UHC

• Shift to Case-based PaymentsShift to Case-based Payments

• Case-based Payments and DRGs (more advanced) advantageous Case-based Payments and DRGs (more advanced) advantageous to members and healthcare providersto members and healthcare providers

• One uniform rate for the provision of a minimum level of One uniform rate for the provision of a minimum level of quality care under the most modest of accommodations quality care under the most modest of accommodations regardless of member category or nature of healthcare regardless of member category or nature of healthcare institutioninstitution

• Promotes an equitable basic standard that is the same for Promotes an equitable basic standard that is the same for similar provisions whether admitted in government or private similar provisions whether admitted in government or private health care providers health care providers

• We should really define standards regarding the quality of We should really define standards regarding the quality of carecare

CASE RATE (CR)CASE RATE (CR)

• Allows PHIC to improve administrative efficiency Allows PHIC to improve administrative efficiency by reducing turn-around time (TAT) for paying by reducing turn-around time (TAT) for paying health care providershealth care providers

• Allows members to know how much they are Allows members to know how much they are entitled to - entitled to - empoweringempowering

• Reduces discretion of claims processorsReduces discretion of claims processors

• Makes possible the NBB policy for sponsored Makes possible the NBB policy for sponsored membersmembers

ASSUMPTIONSASSUMPTIONS

• There is mounting evidence of the advantages of CRThere is mounting evidence of the advantages of CR

• Initial experiences (PHIC Circ No.11, s 2011) have proven its Initial experiences (PHIC Circ No.11, s 2011) have proven its valuevalue

• TATs improved from 70 days to 45-55 daysTATs improved from 70 days to 45-55 days

• However, since limited to 23 conditions, stymied the However, since limited to 23 conditions, stymied the realisation of the promises of CRs, PHIC BR No.1679, s. 2012 realisation of the promises of CRs, PHIC BR No.1679, s. 2012 approved shift to CR from PFSapproved shift to CR from PFS

• Advantages are procedural and not substantiated with Advantages are procedural and not substantiated with outcomesoutcomes

GENERAL OBJECTIVESGENERAL OBJECTIVES

• To phase out fee-for-service payment mechanismTo phase out fee-for-service payment mechanism

• Will HMOs follow suit?Will HMOs follow suit?

• To simplify reimbursement rates understood by all To simplify reimbursement rates understood by all sectorssectors

• How will the public know the rates?How will the public know the rates?

• To improve turnaround time of processing of claimsTo improve turnaround time of processing of claims

• Will the system handle the volume efficiently?Will the system handle the volume efficiently?

SCOPE AND COVERAGESCOPE AND COVERAGE

• Uniformly applied to all medical conditions Uniformly applied to all medical conditions and proceduresand procedures

• Also apply to all identified day surgeries and Also apply to all identified day surgeries and select proceduresselect procedures

• Also apply to all directly filed claims by Also apply to all directly filed claims by members subject to compliance to rules on members subject to compliance to rules on direct filingdirect filing

DEFINITION OF TERMSDEFINITION OF TERMS

• Case-based Payment - predetermined fixed rate for each Case-based Payment - predetermined fixed rate for each treated case or disease; also per case paymenttreated case or disease; also per case payment

• Case rate (CR) - Fixed amount for a specific illness/case which Case rate (CR) - Fixed amount for a specific illness/case which shall cover forshall cover for

• Fees of health care professionalsFees of health care professionals

• All facility charges including (but not limited to)All facility charges including (but not limited to)

• room and boardroom and board

• diagnostics and laboratoriesdiagnostics and laboratories

• drugs, medicines and suppliesdrugs, medicines and supplies

• operating room fees and other fees and chargesoperating room fees and other fees and charges


• Day Surgery - ambulatory or outpatient Day Surgery - ambulatory or outpatient surgeries that includesurgeries that include

• elective (non-emergency) surgical elective (non-emergency) surgical proceduresprocedures

• minor or majorminor or major

• local, regional, or general anesthesialocal, regional, or general anesthesia

• patients are safely sent home within the patients are safely sent home within the same day (DOH AO No.183, s.2004)same day (DOH AO No.183, s.2004)


• Relative Value Scale (RVS) - Systematic listing and coding of Relative Value Scale (RVS) - Systematic listing and coding of surgical proceduressurgical procedures

• Five-digit code - simple and “Five-digit code - simple and “accurateaccurate””

• Relative Value Unit (RVU) - A number assigned to surgical Relative Value Unit (RVU) - A number assigned to surgical procedures by the Corporation that reflects its relative procedures by the Corporation that reflects its relative weight or its degree of complexity as compared to another; weight or its degree of complexity as compared to another; associated with relative difficulty of the procedureassociated with relative difficulty of the procedure

• Inconsistent with case rate where the emphasis is on Inconsistent with case rate where the emphasis is on outcomeoutcome

• Should be more reflective of disability and effect on Should be more reflective of disability and effect on quality of lifequality of life


• ICD 10 - Statistical classification that contains a ICD 10 - Statistical classification that contains a limited number of mutually exclusive code limited number of mutually exclusive code categories which described all disease conceptscategories which described all disease concepts

• Critical Poor - Assessed/identified as poor by Critical Poor - Assessed/identified as poor by Medical Social Welfare who are not listed or Medical Social Welfare who are not listed or registered to the Sponsored Program but can registered to the Sponsored Program but can immediately avail of NHIP benefits; subject to immediately avail of NHIP benefits; subject to validation of the DSWDvalidation of the DSWD

• Sponsored Member - contribution is paid by Sponsored Member - contribution is paid by another individual, government agency, or another individual, government agency, or private entity according to the rules of the private entity according to the rules of the CorporationCorporation


• Geographically Isolated and Disadvantaged Areas Geographically Isolated and Disadvantaged Areas (GIDA) - marginalised population physically and (GIDA) - marginalised population physically and socio-economically separated from society and socio-economically separated from society and characterised by:characterised by:

• Physical factors - distance, weather conditions and Physical factors - distance, weather conditions and transportation difficultiestransportation difficulties

• Socio-economic factors - high poverty incidence, Socio-economic factors - high poverty incidence, vulnerable sector, in situations of crisis or armed vulnerable sector, in situations of crisis or armed conflictconflict


• Charge to future claims - system of charging to Charge to future claims - system of charging to reimbursements that will be claimed by the reimbursements that will be claimed by the Health Care Professionals (HCP) for sanctions to Health Care Professionals (HCP) for sanctions to violations to PHIC policies and other instances violations to PHIC policies and other instances where PHIC should recover what have been where PHIC should recover what have been previously paid forpreviously paid for

• No Balance Billing (NBB) Policy - no other fees No Balance Billing (NBB) Policy - no other fees or expenses shall be charged or paid for by the or expenses shall be charged or paid for by the patient-member above and beyond packaged patient-member above and beyond packaged ratesrates

GENERAL GENERAL POLICIES ON POLICIES ON CASE RATE CASE RATE PAYMENTSPAYMENTS

A.A. FFS is being phased out and preferred mode shall be case FFS is being phased out and preferred mode shall be case ratesrates

B.B. Objective is to reduce the out-of-pocket expenditures of Objective is to reduce the out-of-pocket expenditures of patient-members. patient-members. In no instance shall case rates be added In no instance shall case rates be added to the expenses.(?)to the expenses.(?)

Needs clarification but ominousNeeds clarification but ominous

C.C. Specified procedures in IRR shall be paid in full whether Specified procedures in IRR shall be paid in full whether done as inpatient and outpatientdone as inpatient and outpatient

We should submit a list or a policy statement enumerating We should submit a list or a policy statement enumerating the exceptionsthe exceptions

D. All CR Payment shall be paid to the account of the HCID. All CR Payment shall be paid to the account of the HCI

• The HCI shall be made accountable to PhilHealth and to its The HCI shall be made accountable to PhilHealth and to its beneficiaries for all that happens to the patient beneficiary while beneficiaries for all that happens to the patient beneficiary while under the HCI’s careunder the HCI’s care

• Pressure on HCIs to monitor their doctorsPressure on HCIs to monitor their doctors

• The HCI should facilitate payment to HCP within 30 calendar days The HCI should facilitate payment to HCP within 30 calendar days upon receipt of reimbursement or to a time frame as agreed upon upon receipt of reimbursement or to a time frame as agreed upon by the specific facility management and their professionals. by the specific facility management and their professionals. PhilHealth shall regularly inform HCPs of payments made to HCIsPhilHealth shall regularly inform HCPs of payments made to HCIs

• Empowers HCI to negotiate with the doctorsEmpowers HCI to negotiate with the doctors

• Silent on the formula for splitting the reimbursementsSilent on the formula for splitting the reimbursements

D. All CR Payment shall be paid to the account of the HCID. All CR Payment shall be paid to the account of the HCI

• The HCI shall withhold the expanded withholding tax…for The HCI shall withhold the expanded withholding tax…for their professional fees. The HCI shall withhold final VAT on their professional fees. The HCI shall withhold final VAT on Government Money Payment (GMP) if applicable.Government Money Payment (GMP) if applicable.

• HCI is withholding agent consistent with BIR Regulations HCI is withholding agent consistent with BIR Regulations on Professional Feeson Professional Fees

• PhilHealth shall withhold the income tax as per BIR policy PhilHealth shall withhold the income tax as per BIR policy against the case rate amount to be paid to the HCIagainst the case rate amount to be paid to the HCI

• Tax evasion is more difficult especially if all cases are Tax evasion is more difficult especially if all cases are coveredcovered

E. Credentialing and privileging of doctors (including specialists), and E. Credentialing and privileging of doctors (including specialists), and other heath care professionals shall be delegated to the concerned other heath care professionals shall be delegated to the concerned HCI. PhilHealth shall no longer have tiered payments according to HCI. PhilHealth shall no longer have tiered payments according to training or specialisation of the doctors.training or specialisation of the doctors.

• The HCI can tier payments.The HCI can tier payments.

F. HCIs shall be responsible to file the claims of PhilHealth F. HCIs shall be responsible to file the claims of PhilHealth beneficiaries within the prescribed period of filing (60 days).beneficiaries within the prescribed period of filing (60 days).

G. Direct filing by members shall only be allowed for certain G. Direct filing by members shall only be allowed for certain circumstances as prescribed by PhilHealth.circumstances as prescribed by PhilHealth.

H. The No Balance Billing (NBB) policy shall apply to all indigents and H. The No Balance Billing (NBB) policy shall apply to all indigents and sponsored sectors.sponsored sectors.

I. The Corporation shall set specific case rate for special I. The Corporation shall set specific case rate for special circumstances:circumstances:

1.1. Geographically Isolated and Disadvantaged Areas (GIDA)Geographically Isolated and Disadvantaged Areas (GIDA)

2.2. Health Human Resource Shortage areasHealth Human Resource Shortage areas

3.3. Emergency/acute care - selected emergency department Emergency/acute care - selected emergency department visits that are skilfully evaluated and efficiently managed visits that are skilfully evaluated and efficiently managed without need for further admissionwithout need for further admission

4.4. Other special circumstances…by the CorporationOther special circumstances…by the Corporation

• Incentive to practice in remote areasIncentive to practice in remote areas

MEMBER BENEFITS UNDERMEMBER BENEFITS UNDERCASE RATESCASE RATES

A.A. HCI should deduct the entire CR amount from the patient’s total bill including HCI should deduct the entire CR amount from the patient’s total bill including professional fees at all timesprofessional fees at all times

B.B. Professional services must be provided by accredited health care professionals.Professional services must be provided by accredited health care professionals.

Responsibility of HCI to inform PHIC members on status of accreditation of their Responsibility of HCI to inform PHIC members on status of accreditation of their HCPsHCPs

• The method will be dependent on the HCI unless the IRR puts specific rulesThe method will be dependent on the HCI unless the IRR puts specific rules

There should be at least one PHIC accredited doctor managing the caseThere should be at least one PHIC accredited doctor managing the case

If services are provided by nonPHIC accredited professionals only, then the claim If services are provided by nonPHIC accredited professionals only, then the claim shall be deniedshall be denied

• nonPHIC accredited doctors can still perform the surgery as long as the signatory nonPHIC accredited doctors can still perform the surgery as long as the signatory is the accredited doctor is the accredited doctor

C.C. Patients with multiple medical conditions, co-morbidities or requiring multiple Patients with multiple medical conditions, co-morbidities or requiring multiple procedures per confinement, PHIC shall endeavour to pay for all admissible medical procedures per confinement, PHIC shall endeavour to pay for all admissible medical conditions and/or procedures subject to limits set by PHIC Board, which will subject conditions and/or procedures subject to limits set by PHIC Board, which will subject of a separate PhilHealth circularof a separate PhilHealth circular

OTHER PROVISIONSOTHER PROVISIONS

• SYSTEM ENHANCEMENTSYSTEM ENHANCEMENT

• PhilHealth database PhilHealth database designed and improved to designed and improved to generate real-time, quality generate real-time, quality and responsive and responsive information/evidences for information/evidences for evidence-based policies and evidence-based policies and rates adjustmentsrates adjustments

• COMPLIANCE MONITORINGCOMPLIANCE MONITORING

• Regular Post-audit Regular Post-audit monitoring and evaluation monitoring and evaluation of HCPsof HCPs

OTHER PROVISIONSOTHER PROVISIONS

• PERIODIC REVIEW, EVALUATION AND PERIODIC REVIEW, EVALUATION AND ADJUSTMENTS IN POLICY AND RATESADJUSTMENTS IN POLICY AND RATES

• Reviewed annually and as necessaryReviewed annually and as necessary

• ……Proposed costing and grouping from medical Proposed costing and grouping from medical societies and organisations,…shall be used to societies and organisations,…shall be used to enhance the rates and groupings for the case enhance the rates and groupings for the case ratesrates

• Opening for PAO to pro-actively study the rates Opening for PAO to pro-actively study the rates and groupings, and make proposalsand groupings, and make proposals

PENALTIES AND SANCTIONSPENALTIES AND SANCTIONS

• Appropriate penalty and sanctions pursuant to Appropriate penalty and sanctions pursuant to R.A.7875, amended by R.A.1066, its IRR and other R.A.7875, amended by R.A.1066, its IRR and other issuancesissuances

• Any violation included in Provider Engagement Any violation included in Provider Engagement through Accreditation and Contracting for Health through Accreditation and Contracting for Health Services (PEACHeS); Penalties charged to future Services (PEACHeS); Penalties charged to future claimsclaims

• The DOH, PRC, and other concerned agencies shall The DOH, PRC, and other concerned agencies shall be furnished a copy of decision against HCI for be furnished a copy of decision against HCI for information and appropriate actioninformation and appropriate action

FINAL PROVISIONSFINAL PROVISIONS

• REPEALING CLAUSEREPEALING CLAUSE

• SEPARABILITY CLAUSESEPARABILITY CLAUSE

• EFFECTIVITYEFFECTIVITY

• 15 days after 15 days after publicationpublication

GENERAL COMMENTSGENERAL COMMENTS

• The underlying philosophy that the change in the The underlying philosophy that the change in the payment scheme will improve the quality of care is payment scheme will improve the quality of care is fallaciousfallacious

• The quality of care in terms of standards of care and The quality of care in terms of standards of care and eventual outcome must be defined and monitored eventual outcome must be defined and monitored to refute or substantiate PHIC claimsto refute or substantiate PHIC claims

• The healthcare environment the PHIC intends to The healthcare environment the PHIC intends to create is discouraging and may eventually lead to a create is discouraging and may eventually lead to a reduction in healthcare providersreduction in healthcare providers

Documents

PHILHEALTH CIRCULAR NO.31 ALL CASE RATES POLICY NO. 1 IMPLICATIONS FOR OUR PRACTICE