Healthcare insurers urged to query bills

Health insur

ance companies should query claims for inpatient treatment where cheaper alternatives are available, a new report on cost containment in the sector says.

Insurers should query the payment of claims for subscribers treated in hospitals if there is evidence that the particular procedures could have been carried out on a day-care basis or in a side room, the report says.

The report also calls for insurers to be permitted to pay public hospitals on the basis of particular procedures carried out on their subscribers rather on the number of days for which they have been admitted.

Fixed

-price rates
The report, carried out by a group headed by former health service official Pat McLoughlin, says that at present public hospitals are reimbursed on a

per-day basis while private hospitals have negotiated fixed-price rates for surgical and diagnostic procedures.

It says a case-based charging system would set a fixed payment for each case or patient episode.

“Implementation of this system would help to drive cost efficiency because fixed payments encourage hospitals to eliminate unnecessary services, to reduce lengths of stay and to develop a competitive advantage in areas in which they are high performers. It would also incentivise hospitals to move towards treating particular conditions on a day case or outpatient basis as opposed to an inpatient basis,” the report says.

“The approach would also deliver greater alignment between the way that public and private hospitals are reimbursed.”

The report says Minister for Health James Reilly "should pursue implementation of a case-based charging system using diagnosis-related groups [DRGs] for private patients in public hospitals".

Case-based charging system
It says the Department of Health and the Health Service Executive, with appropriate input from the private health insurers, "should develop plans as early as possible in 2014 for the implementation of a case-based charging system using DRGs for private patients in public hospitals".

The report also maintains that to ensure that patients are treated at the lowest possible cost consistent with quality, “insurers should use existing information on the appropriate treatment locations for individual procedures”.

It says the Irish health service’s case-mix system already has a list of procedures that could be carried out on a day-care basis, and that the British Association of Day Surgery has a similar list.

“Insurers should use information of this kind to query cases claimed as an inpatient which might have been carried out on a day basis or as a side-room procedure,” the report says.