Why would anyone mention value-based reimbursement, medical necessity and the Jimmo lawsuit in the same sentence? I feel they are all related, but it will be difficult to find the perfect balancing act to maximize the benefits of each topic.

So first let me explain each one:

Value-based reimbursement (sometimes known as pay-for-performance outcomes) is growing in popularity as an alternative payment system, as compared with our current fee-for-service system. A recent McKnight’s news article, “Obama advisors urge faster shift to value-based reimbursement of healthcare providers,” noted how White House advisors feel that, “Fee-for-service payment methods are the greatest impediment to an efficient healthcare system by incentivizing volume instead of better outcomes.” I couldn’t agree more, although I’m not easily convinced that payment based on patient outcomes is the best option for healthcare reform.

Medical necessity must always be proven if a healthcare provider is seeking reimbursement for their specialized skilled medically necessary services. For example, a physical therapist may establish an exercise program for anyone (a friend, a neighbor, a patient); however, it becomes a reimbursable service if that person requires the skill set of the physical therapist to provide this service.

The Jimmo vs. Sebelius lawsuit from 2013 was a major victory for healthcare providers. It reinforced the Medicare Benefits Policy Manual’s regulations that say that billable services are based on medical necessity — and not the patient’s ability to demonstrate outcomes. It primarily targeted our most medically complex patients and emphasizes the importance of prevention, and decreasing further declines of function.

I completely agree that the current fee-for-service payment system is not sustainable; however, I caution healthcare providers against quickly deciding that reimbursement based on patient outcomes is the perfect replacement. I think we need many more discussions on the use of standardized assessment tools; however, the G-coding system for Medicare Part B is working toward creating this national standard.

I also feel that the Jimmo case has provided the healthcare industry with the necessary tools to work toward providing preventative care; however, if we are successful at creating prevention, do we create outcomes based on events that will never occur?

Shelly Mesure (“measure”), MS, OTR/L, is the senior vice president of Orchestrall Rehab Solutions and owner of A Mesured Solution Inc., a rehabilitation management consultancy with clients nationwide. A former corporate and program director for major long-term care providers, she is a veteran speaker and writer on therapy and reimbursement issues.