Thursday, September 16, 2010

MDRP 2010 Conference - Navigating the Operational Impacts of Health Care Reform

Erinn Hutchinson and Katherine Buckley – PricewaterhouseCoopers

The new healthcare reform allows for additions to the PHS program of the Children’s Hospitals, Free Standing Cancer Hospitals, Critical Access Hospitals, Rural Referral Centers, and Sole Community Hospitals. This expansion in the program will obviously add volume to your PHS sales and thus you will not only be giving more discounts, but you will also have much more data to sort through for validation purposes.

On top of the current list of entities that will be added, there is talk that some DSH entities are considering a change in their designation during the enrollment period. If their center can be determined and designated to be a more specific entity such as the FSCH, CAH, RRC, and SCH it might be better financially for them to apply for the newly available PHS pricing. If there is a shift of designation, your company must anticipate that increase in volume and discounts.

Due to these increases, validation is more important than ever. In looking at the PHS list you will now have to be very diligent in ensuring that the designation code for that entity actually does show the entity as is getting the correct price when purchasing your product. For the smaller companies, this means to use the PHS database and compare it to your PHS sales to ensure they are truly deserving entities which will add burden to your manual process. However, if you have a great deal of PHS sales you may be using a system to compare and exclude those entities which are not eligible, your largest impact may be on processing time for the comparison.

And if you are one of those companies who has not been able to justify the purchase of a system for your PHS entity validation, this new regulation may be the proverbial last straw for the back of the camel. With so many new entities that are currently eligible under the new language, and with the entities that may eventually become eligible there is just so much more detail to review. With the downsizing that has occurred in the industry and the fact that the Medicaid/GP staff has so many more steps to follow in order to comply with the new regulations, it may just not be possible for them to go through each quarterly PHS list release and each PHS sale manually for validation purposes.

No matter your situation, know that the PHS tsunami is coming; prepare and hold on!

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