Improving Payer Mix

Facility revenue levels depend directly upon the mix of reimbursement for resident care that you achieve through the admissions process. In most states, Medicare reimbursement represents the optimum payer. But optimum payer class is not always so obvious. For example, if your state bases it's Medicaid reimbursement on case mix of your Medicaid patients only, then admitting Medicaid patients who need rehab or subacute care might not pay off on the short term, but can greatly help to improve your facility case mix and overall Medicaid reimbursement. So the right mix of payers requires some careful analysis.

Once you arive at your optimum payor mix, then add your actual payor mix to your dashboard and monitor it weekly. Based on your data, you should redirect your marketing activities to target the particular payor class you need to improve on. You certainly won't turn away patients who are not in your targeted group, but you will focus your marketing and outreach activities to reach patients of your targeted payor group.

Finally, don't be caught in the trap of looking only at what a payor class reimburses you for care without also looking at what it costs you to provide the care. Careful and ongoing monitoring of expenses per payor class is critical, and also should be dashboard. Categories for close monitoring include pharmacy costs, rehab staffing expenses, and co-pay receivables.

Successful operation of long term care facilities is a complex challenge in today's fiscal environment. For more information on these strategies, contact Joseph Tomaino at joseph.tomaino@rsmi.com or 212-372-1640.

Continuing Care InSite is the blog of Joseph Tomaino, who assists his clients with smart approaches to improving continuing care organizations. He can be reached at jtomaino@continuingcareinsite.info