Hello Tanya
Thank you for writing this note and placing costing into its proper perspective.
I know I have made numerous comments in the past regarding the subject of costing. Will expand under this post. My involvement on this subject with the life care planning group started back in the late 1990's early 2000 via Patty McCollum – she invited me to write an article on costing methodology which she published in her journal in 2002. The methodology discussed back then, and I have continued to expand in later articles and discussions is consistent with your points of view. It is further consistent with the following:
IARP Standard
Delineating costs This step includes methodology for determining the costs of future care recommendations.
14. STANDARD: The life care planner uses a consistent, valid, and reliable approach to costs.
PRACTICE COMPETENCIES:
a. Uses a consistent method to determine costs for various categories of available/needed services.
b. Uses geographically relevant and representative costs.
c. Identifies services and products from reliable sources.
d. Follows a consistent method for organizing and interpreting data for projecting costs.
e. Explains the life care planning process to involved parties to obtain needed information.
f. Cites verifiable cost data.
Please note – nothing dictates a percentile. A percentile is just one data point that a life care planner can include in the costing analysis portion of the LCP.
Further, the current IARP methodology is also consistent with the application noted in this recent ruling. For those of you looking for a basis to articulate why the 50th percentile or any particular designation of any percentile is NOT sufficient end point in your analysis this ruling will help you.
SCHIFF MD PhD v. LIBERTY MUTUAL FIRE INSURANCE COMPANY (2024) | FindLaw
I will highlight a few sentences to focus on:
"…relied solely on its 80th percentile bill review methodology to review and reduce payment on….did not do individualized investigations with respect to those bills."
"the insurer engages in unfair practices by failing to conduct an individualized assessment of the reasonableness of a medical providers bill."
"Primary question before centers on what is the meaning of reasonable…"
Read the conclusion several times..
"It is entirely possible that patients may incur reasonable medical expenses greater than the 80th percentile benchmark in a given geographic area and Liberty does not demonstrate how Fair Health provides sufficient information to categorically reject all charges above the 80th percentile…."
"….categorical reduction of any charges over the 80th percentile as unreasonable is too restrictive a measure…"
"individual providers characteristics as one example of relevant factors that may inform the reasonableness of an individual bill" (a quick comment here – don't interpret this as "I am an excellent surgeon so I can charge what ever I want – the only brewing standard is to ding providers for bad outcomes – not rating individual skills- I would interpret this as the measurable skill difference between a brain surgeon and basic routine surgical care versus non surgeons etc)
Finally read point 33 within the ruling word for word….
The relevance of understanding how to interpret UCR analysis on past healthcare services is because the inverse in selecting a "cost" for your LCP sets the stage for methodology.
The bottom line of this ruling is this
1. It supports the IARP standard 14 – define your methodology for selecting your costs. It is based on your research – if you decide that utilizing the 85th percentile is consistent with the individualized assessment of each item in your LCP then so be it. It you use the methodology of researching three specialists in the geographic region for your cost – so be it.
2. The 50th percentile – I have never seen any payor such as the VA, Workers comp, private payor arrangements ever select the 50th percentile as a plausible basis for an end point UCR analysis.
3. In reading this ruling substitute "Fair health" for any data base source – it is the same the argument. They all collect charge data from claims
4. So what is individualized analysis include: think about it – the "claim" has the name of the provider, the geographic location, the diagnosis being treated (intensity of service) any relevant modifier, the license type of the professional rendering care, and the facility in which the care is rendered. The use of the data bases are statistically valid. However, they only have the cpt code and a price. Therefore, you retrieve the price into your plan of care, then add all other components to achieve individualized research.
One more comment: To date, I have not seen anything being produced by the costing committee and a developing costing matrix that would contradict this ruling.
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Rebecca Busch
CEO
rebecca@mbaaudit.com
Westmont, IL United States
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Original Message:
Sent: 05-24-2024 16:23
From: Tanya Rutherford Owen
Subject: Thoughts on costing
Dear colleagues,
I have observed over the last several years an increased focus on life care planning costing. The recent discussion on the IALCP listserv is an example of this focus. I recognize that there are many practitioners who desire guidance on costing practices. I applaud those involved in a search for an empirically sound costing methodology. I would also like to add a voice that cautions each of us to keep our focus on what is important in our specialty practice. To do so, I must lay the foundation.
In my research, the first definition of life care planning that I can find is below.
The original definition, in the early 1980s, of life care planning was:
A consistent methodology for analyzing all of the needs dictated by the onset of a catastrophic disability through to the end-of-life expectancy. Consistency means that the methods of analysis remain the same from case to case and does not mean that the same services are provided to like disabilities (Deutsch & Raffa, 1982; Deutsch & Sawyer, 2002 as cited in Deutsch et al., 2003b, p. 5-7).
Eventually, through consensus, the below definition was established in 1998 and remains the accepted definition in 2024:
A Life Care Plan is a dynamic document based upon published standards of practice, comprehensive assessment, data analysis, and research, which provides an organized concise plan for current and future needs with associated costs, for individuals who have experienced catastrophic injury or have chronic health care needs. [Combined definition of the University of Florida and Intelicus annual life care planning conference and the American Academy of Nurse Life Care Planners (now known as the International Academy of Life Care Planners) presented at the Forensic Section meeting, NARPPS annual conference, Colorado Springs, Colorado, and agreed upon April 3, 1998].
The first definition consists of 49 words while the second definition consists of 47 words, so within 96 words the essence of our specialty practice of life care planning was captured. Of those words, the word "costs" appears one time. In contrast, both definitions emphasize the importance of methodologically sound practice based upon the concepts of standardization and consistency. These definitions remind us of the heterogeneity implicit in our work, hence the value of our empirically based and clinically informed professional judgment. In the 30 years I have been associated with life care planning, I have seen many concerns identified and most, with time, settled. However, this myopic focus on costing, in my humble opinion, is keeping us from focusing on more pressing matters. Those matters include adherence to existing standards, engagement in outcomes-based research, and unification in the identity of our profession. I think it would behoove all of us to "zoom out" on this costing focus and recognize the realities of most life care plans. These realities include the fact that upwards of 50% of the total cost of many life care plans is in attendant care, where percentile choice is not necessary. This is true for many other items in a life care plan including medications, most DME, architectural modifications, vehicle modifications, etc. The harsh reality also exists that attorney fees and litigation costs are subtracted from any award, thereby reducing the amount the individual with the disability will ultimately receive. While I have not tested this assumption, I suspect that comparing two life care plans containing identical items, one reflecting 50th percentile costs and one reflecting 75th percentile cost, the percentage difference in the two plans would be negligible, and likely would not overcome the amount that will be deducted for legal fees and expenses.
I am personally concerned that the professional splintering and divisiveness in the current life care planning community will handicap our ability to continue to meaningfully build upon the important work that people such as Dr. Paul Deutsch and Dr. Roger Weed did for so many decades. I invite all life care planners to consult the rich library of previously published documents in life care planning, as I believe you will find the guidance and information contained in those documents to be invaluable. I truly believe that such an endeavor will provide much more value than debating whether we should use the 50th or 75th percentile when costing medically related items in a life care plan.
Tanya Rutherford Owen, Ph.D., CRC, CLCP, CDMS, LPC, FIALCP
Owen Vocational Services, Inc.
Co-Editor- Life Care Planning & Case Management Across the Lifespan
1706 E Joyce Blvd Suite 2
Fayetteville, AR 72703
(479) 718-6631
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