Department of Health

Funding Models Forum 2017 - Acute admitted (WIES24)

  • 18 October 2017
  • Duration: 38:29
  • Thanks Denise.

    I just in the interest of time just in case we run out of time we decided just to go move to WIES24 which is probably just as interesting as the WASE model as you've all found out. So probably the first thing I would like to say is a big thank you for all of you for putting up with me for those that don't but for those of you don't know me I'm Phuong Nguyen and I'm the current manager of health service budgets and I'm the one that manages the policy and funding guidelines, so the first thing is thank you to the funding systems development team Dan, Tyrone, you know who you are, funding policy as well as the other members of my team in putting the policy and funding guidelines together. There were a few hiccups this year unfortunately got out on the 30th of June. The team next year will endeavor try to get out earlier, but I guess over the past three or four years it's been an improvement compared to August, I think in 2013, so we're trying to get it out earlier we're trying to get the materials that you need to do your job so we're also requesting feedback on any of materials provided. So  just to recap your CFO and CEO were provided with the suite materials, I'm not sure how much of it reached you but a lot of the detail that both Dan and myself are about to cover were issued on the 30 th of June these include the policy and funding guidelines which we try to cover as much detail as possible without making it in an encyclopedia, the parameter sheet which the CFO is all know about, there's the model budgets which show all the movements, we've tried to be as transparent as much as possible every year, I know it's very complicated again any feedback on that is greatly welcomed. We also introduced, we also provided the rebase files, Dan kindly did them for me for WIES22, WIES23, and WIES24. We will be reproducing that same file based on the consolidated VAED, when it becomes available so as soon as Dan's processed it we will the SGA for you. We also did the subacute WIES freebase file, we provided all the weight files in Excel, and we also developed a comprehensive suite of PowerPoint presentations which explained the funding model changes. Again we're not sure what materials reached who, but if there is any feedback on those materials, be greatly appreciated so that the concerned can organize what they need to do for next year's suite of documents.

    So WIES24, so I'm just going to give an overview of a few things that you all should be well aware of I'm not going to go through the WIES24 model Dan is much more experienced and much more knowledgeable than me I'll let him do all the talking and he is the brains behind the model. But the things that I want to bring to your attention, is that in terms of WIES24 in17/18 it applies to four cohorts of patients now not just three, so the parameters that were published for WEIS24 apply in the same way to all four program streams, but the way that we count for the revenue is different so we've got public and private WIES, which is the normal PP WIES, majority of your WEIS is WEIS24 is applied at the relevant public and private rate. We've got Department of Veterans Affairs which have also cover shortly and these targets are based on the available targets provided by DVA. They're paid to actual so we might be cash flowing you a bit less now, but if you do more activity you'll get paid at the end of the year the parameters that apply for public and private patients apply to DVA. Likewise with TAC the same parameters apply again a different price to PP as well as DVA and we also reconcile at the end of the year.
    In 17-18 there has been a change there has been changed to how you report in the F1 as well there is a new category called NBCSP, apologies for another acronym, but it's better than typing out National Bowel Cancer Screening Program every single time. So in 16-17 this program was limited to a small number of services it was based in the WIES model in terms of the weight and the price but it was paid as a specified grant during the year. In 17-18 we've introduced a new category of WEIS, a new category of targets for you and it's based on that historical grant as well as increased throughput due to the increasing scope so in everybody's budget there are now four targets, a public private target, a DVA target, a transport commission target and a bowelcancer screening program target. There were three later categories DVA TAC and bowel screening are paid to actual and these were not taken from the PP target, so it's a new funding pool that you have access to, there's no marginal WIES policy applied, you do more you get paid more you do less you will have that funding recalled at full rates at the end of the year.

    hese  funding pools are not interchangeable due to the nature of the funding source and so we are unable to convert bowel screening WEIS into private WEIS TAC WEIS into public private WEIS etc. So just to recap on the bowel cancer screening program a bigger a broader program was introduced on July 1 2017 and it's really reported it's applicable to patients who are I reported to the VAED and have a funding arrangement code of being bowel screening program intervene. If you satisfy those two criteria you will be eligible for that activity to be counted against the bowel screening target, so that's the only real difference and it's based on whichever DRG you are group to either G48B, G46B are the 2 DRGs.
    So there were two things that I just want to mention in terms of overall WIES parameters and Dan will talk you through the changes that were applied this year and we'll have questions afterwards thank you
    Thankyou Phuong as previously mentioned my name's Dan Borovnicar I am from the funding system development unit within the department and in the time that I have I'd like to take you through a pack of slides that outline the changes that will be implemented in WIES24 so I'm happy to take comments questions or queries after the slides. So just to begin with there are a number of changes introduced to the criteria for reporting to the 2017-18 VAED, the first is the criterion for admission O that's for overnight admissions there now to include patients that are admitted to a designated mental health service, regardless of legal status. The other change is the introduction of a new criterion for admission X and these class patients that are passed through an ED and are admitted to a short stay unit, there are a bunch of changes around adding procedure codes to both the automatically admitted and the not automatically admitted procedure list, there's a removal of a bunch of procedure codes due to development of new codes that better capture these procedures and there's small number of transfer of codes between the NAAPL and the AAPL, there's only a few of them.

    So this slide outlines the main changes that are captured under the WIES24 model it includes refreshing the base WIES model adjusting the thalassemia co-payment there's the introduction of a new VIC DRG for endovascular clot retrieval, the model has been adjusted to anticipate coding changes that are introduced under 10th edition ICD -10-AM. there's a new cost weight  is reduced for admissions to shorts day observation units and there's also a Victorian modification to the episode clinical complexity model that's within AR DRG version 8.

    So the next series of slides going to some more detail about these changes. Firstly the base model has been refreshed to include the latest available cost data so that's 2015-16 the DRG boundaries and the and the same day one day DRG designations they've all been refreshed based on the latest available five years of activity data. Medical indemnity costs continue to be included as reported in the 2015-16 costs there's a normative pricing policy around hip and knee replacements that's continuing, so that basically means that the cost weights are set on the median cost and not the average cost and the also there's cost modeling continuing around eye tissue implants that were previously funded under the Lions Eye donation service, so it's expected that when the costs come in to the next year's model that will all go on to actual cost rather than model costs. So the Thalassemia co-payment was first introduced under WIES5 which is 1997-98, in recognition that Thalassemia cases were much more expensive than other cases in the same DRG.

    Twenty years on the we've reviewed the cost data and what it shows that the cost differences have reduced between thalassemia and non Thalassemia cases within the same DRGs so accordingly we've adjusted the co-payment to aligned with reported costs and that means the cost weight the co-payment for thalassemia has reduced down to 0.1089 of the WIES and that essentially aligns cost recovery to about a hundred percent of cost.

    So there's new VIC-DRG introduced its BO2Y which is endovascular clot retrieval and that's been introduced to recognize the highly specialized higher costs associated with delivering an endovascular clot retrieval service so to get into the DRG you have to originally group to the adjacent DRG BO2 cranial procedures you have to have one of a series of diagnosis codes around stroke which is listed there and you also have to have coded procedure for embolectomy or thrombectomy of intracranial artery they're the, the rules. So this cost weights expected to fund ECR services from Melbourne health, Monash health, Austin and Alfred and St. Vincent's, they're the main providers, it's expected that the cost weight will more equitably cost recover for episodes that receive an endovascular clot retrieval service and also episodes that don't have that service in the same DRG and there's a small cohort of patients that receive endovascular clot retrieval but they group to tracheostomy DRGs and that logic will be maintained because these cases have much higher cost inputs associated with care in ICU so that will be maintained. But they only represent a small proportion of cases.

    The next modification is around short-stay observation units there's been a separate new cost weight introduced to fund more equitably and sustainably admissions to short-stay units. So what that means is is two new columns in the cost weight table, it's a column that Flags eligible DRGs for the cost weight and there's another column which contains the cost weight. So there are about and there are 163 DRGs that are eligible for the cost weight and for these DRG's short stay activity represents between 10 and  90 percent of total activity in those DRG's, they are so for the other DRGs where short stay activity represents less than 10 percent or more than 90 percent those DRGs have been deemed to not to deemed to have shorts stay deemed too low or too high to justify a separate cost weight, so it'll be just normal as per what WIES23 was formulated. These are the rules around allocating the weight you have to be eligible for WIES funding in the first place, the episode has to have an accommodation type one of S for short-stay, accommodation type 2 is blank, accommodation type on separation as S and the cost weight applies to same day, one day or multi-day cases.

    Now the majority of short-stay activities either same day or one day and the overwhelming majority of cases stay in shorts day for less than 24 hours and it's expected that the introduction of the weights will provide greater funding equity and sustainability for short stay cases it means reducing cost recovery from about a hundred and twenty seven percent of cost, down to a hundred percent of cost and it'll provide greater equity for non-short-stay cases, cases that go to a ward and also for hospitals that don't have a short stay unit.

    So in 2016-17 version eight DRGs were introduced at the national level and in Victoria and historically DRGs have used patient diagnosis, procedures and administrative variables to determine a DRG outcome, however under version 8 there's significantly more adjacent DRGs that are split on diagnostic complexity. So for example both version 7 and 8 have exactly the same number of adjacent DRGs, non-AR DRG adjacent DRGs that's 403  however under version 8 the number of adjacent DRG that has split on diagnostic complexity has almost doubled, it's increased from 167 to 315. Now the flip side of that is version eight places much less reliance on administrative variables to split adjacent DRG, so if you go through the DRG you'll see same day status, age mental health status, transfers, those sort of variables play much less role in splitting adjacent DRGs the other key features under version 8 is that the principal diagnosis now is involved in the splitting methodology, whereas previously the principal diagnosis did not play a role in splitting and also there's now 12500 diagnosis can that can influence a DRG outcome across the entire classification, compared to about 3200 diagnoses in past versions of DRGs.
    So when we implemented version eight we were expecting that the codes would change the profile and the numbers but more to do with trying to better capture or measure patient complexity. but what was not expected was the magnitude of the change in the profile of diagnosis and the number of diagnoses that were reported and this has resulted in a greater than expected proportion of cases being promoted up the DRG hierarchy and a greater than expected volume of WEIS being generated simply because there's a change in the profile of coding. So to address this we've introduced the modification to DRG version 8 that will be implemented in the WIES funding model to maintain funding equity, stability and sustainability and that involves removing the effect of 44 secondary diagnosis codes for the purpose of grouping to AR DRG version 8 so these codes were identified through consultation with the department's Chief Medical Officer and they've been deemed to be not clinical clinically relevant in determining a DRG outcome under the WIES model. I think the codes are published in the policy and funding guidelines if you have a look about of 44 of them.

    Um during 2017-18 the Department will also work with hospitals to tighten coding standards, develop clinical coder ethics, and also to better regulate the clinician query process. The department's also provided a web link that provides guidance on ethical clinical coding and the department will also remind Health Services that codes shouldn't be reported without supporting documentation for the purpose of maximizing revenue, codes shouldn't be omitted for the purpose of avoiding penalties and the process of engaging with clinicians in querying about codes, they shouldn't be done inappropriately like for example push polling or asking leading questions.

    It bit small but this basically summarizes on the left-hand column the changes to the WIES24 model and the outcomes and if I just verbally take you through it, the first row is the refreshing of the WIES base WIES model it's resulted in minimal changes across health services the adjustment Thalassemia co-payment adjustment has resulted in alignment, of cost recovery towards a hundred percent. Introduction of the endovascular clot retrieval DRG, it provides greater funding equity for that service. There's been minor adjustments around the anticipation of 10th edition ICD-10 AM basically moves a few hundred cases from to the gynecological DRGs the NDGRs, there's a short stay observation unit cost weight which reduces cost recovery from one hundred and twenty seven percent to 100 percent for those for that activity and there's a modification around the forty four codes being excluded which again provides greater sustainability in funding sustainability in 2017-18. That's probably all I'd like to present but I'm happy to take questions from the floor or from the webcam.

    We will open up to some questions if people have some questions about that, I am sure they will ask them, again roving mics so fun, yeah thank you so.

    Claire Peirce from Monash Health, just want to clarify why in Victoria we need a different grouper than the national grouper?

    So you're referring to version 8, yeah so we're using the same grouper, what we're doing is for the purpose of the funding model only is to remove the influence of 44 diagnosis codes to make funding while at while the models transitioning through the system and through the cost data, to make it a sustainable, you note that the other 12440 odd codes have been honored it's only these high end ones that have generated more than what we anticipated WIES, we've decided to introduce this modification purely as a financial risk moderation strategy and we'll review it in the subsequent cycle, but it's actually a question that can be asked of the National Development DRG development because I think when it was developed it was all around the statistical significance of these codes rather than the clinical significance and so that's probably a question that we'll be feeding back up the line.

    We got a question and then one here.

    I guess it's just a statement I think that's really important I think if we're trying to achieve the consistency across the nation which is what I understand we're trying to do we're not getting enough feedback around what's happening at a national level in terms of that communication back, so we'd like to hear what the response is.

    Yep so we can certainly pass information back so we have representatives obviously on those groups and so we can start to think about how we get communication back out to the sector. It's not coming through.

    I'm just say what a load of poppycock you did not model properly based on the new version of the grouper so what you're trying to do is curb the, the cost rather than by removing the impact of those codes and to say that the Chief Medical Officer can sign off and say that these aren't clinical relevant is rubbish, you'll allow any one of those codes as the principal diagnosis, but not as an additional diagnosis. We are looked at our data and we have patients with six of those codes in their string of codes and very little else and they are in hospital for quite a long time. Things like diverticulosis and a patient has a colonoscopy, so we have to code that because that was the finding on the colonoscopy, so it's removing the 44 codes has got to end after this year in my opinion. We'll continue to code, these codes.

    Yeah of course you can comment Dan, but yes I think you know part of the thing is this is about coding in one sense and absolutely we're saying he says absolutely you should be coding these things as Dan said before it is a funding modification and absolutely you know, we will accept the fact that part of this is about trying to manage financial sustainability going forward and part of this is about making sure that the unintended consequences of clinical diagnosis coding actually is appropriately implicated in to its funding model going forward. First year of this particular DRG coding set means that actually we have found there's substantial risk both on your side and our side in terms of making this go through so, we do need to put a mitigation strategy and we are monitoring it and we will continue to do it is not to say that the coding is inappropriate, it is to say that actually the implications of this have been, probably, to some degree unprecedented in terms of being able to actually predict this happening.

    To say they are not clinically relevant is completely wrong and they are relevant because they've been shown to be relevant in the national costing data.

    Um so what, what we've done is simply revert to how all the other groups have handled these codes and that's to not put all our thoughts on DRG outcomes. So there's always, there scope for the base line recording of this, it's just now we are not going to influence DRG outcomes. We are simple going back to the way that previous groups have handled this, and it won't be only until this change in the coding actually hits the cost data that you'll get a dilution effect that can we can then manage but because all the cost data has been coded to optimized version seven grouper when you move to version eight it's just the funding riskcreated is too large.

    Just add to Dan's point is that it's they're not clinically relevant for what we would believe for funding purposes, we believe they're clinically relevant from reporting kind of management - perspective but the department for a sustainable funding model could not honor these forty four codes to give you a better perspective under the WIES model and the way that we handle rebasing, the same level of activity needs should technically generate the same number of WIES across each WEIS model. There's a bit of each year there's a bit of gain but that's a few thousand WIES under WIES23 when you put the same cohort of patients with the new, the new coding approach we've seen 75,000 WEIS24 increase across the system located at a very small number of patients when you multiply 75,000 by 4500 that's the entire growth bit, we ever had the option of giving the money to those that benefited through this new algorithm or we took out the 44 clinically relevant codes and then distributed growth funds more equally across the system and the departments took our decision and removed the 44 codes will influence the FEDs, we're not even sure, I mean we're honoring the codes in 16-17, what we're saying is we're not we're not honoring them for additional funding purposes above what you got, either under WEIS22 , WEIS24.

    Couple of questions up the back and then I've got a couple on the online as well. While we are waiting for that one let me just ask this one that's coming in and that is around would there be some assistance available from the department to model the impact between WIES23 vs. WIES24?

    Yes when the 2016-17 data has been consolidated I will be releasing WIES22, 23 and 24 on the activity data for your health service, so that'll be available.

    All your CFO should have already had received a rebase file as a part of the model budgets that contains the one March to 28th Feb 2017 data modelled against the three WIES models all the regional offices have also got a copy of the latest VAED file, which I think it's is all the data except for the last two weeks of 16/17 that is in the process of being distributed if not if it already hasn't been done so and soon as we get the consolidate VAED as well as the July VAED file, we'll run through WEIS22, WIES23 and WIES24 and provide it to you as well.

    I'll just also get Dan, quickly.

    Um the department has hired a contractor to update the WIES calculator and that should become available probably by mid-September so that's now we're addressing the updating of that it's the reason why it's not it's taken some time is because structurally we're introducing new columns into the cost weight table and that means a whole revamp of the calculator but it'll become available mid-September.

    Question up the back.

    I was going to ask about  the WIES calculator because the store using pencils and calculators and rulers to work it out, I just first of all just want to say thank you very much for inferring that health information managers are unethical and therefore you needed to give departmental guidance as to how we should conduct ourselves, to say it was insulting is understating the cause, however I work in Victorian rural hospitals that are WIES funded, I've had a look at the rebase spreadsheet that was sent to the CEOs in a couple of hospitals and you know that the feeling is that the 44 codes that were removed haven't made that much difference in these in these types of hospitals and you know the overall WIES calculation that they're expecting, but as I've said to the CEOs what's made a huge difference that we can't see and that you can't calculate is the Victorian version of ACS 0002 with our very own very specified and prescribed instructions on what we can and can't code in the medical record and in hospitals that have don't have Hospital medical officers, in hospitals that have just VMOs or very a small amount of doctors who come and see the patients, or you know that they're not on site and in the patient profiles that we have when we've done our modelling, just with smaller samples, the impact of ACS OOO2 is it's huge it's absolutely huge and you can't do that because you don't know when you're when you're doing your modeling which codes we've already coded in the past additional diagnoses we can code in the future. So we've had to look at code, regroup using just our principle diagnosis and the change is huge and you've not address that or talked about that at all.

    So I'm might just  answer just comment on the your first comment and I don't think then by any means in you know attempted to infer or the Department issuing guidance was an attempt to infer that coding practice was inappropriate, we actually often and very loudly comment to our national partners in this funding approach that Victoria has a very ethical and professional coding work force that we actually believe are doing exactly the right thing that they should be doing, our issue just to put this in context and again this is not information that is broadly shared and perhaps should be because it will help you understand the context we work in, is that we are currently in a situation with the Commonwealth around the issuing of a direction potentially to the IPPA to go back and look at classification impacts of classification changes and Counting changes at jurisdictional level, that will impact retrospectively, and you may have picked it up on the news around the recent COAG Health Council, about ready to start a battle potentially, where our national bodies will go back, retrospectively, and determine whether or not the impact of classification and counting has actually been, unprecedented, and actually not kind of allowable if you like under the national model and will potentially impact our funding coming forward. So again one of these things is about managing budget risk and our stability going forward, Richard who is my expert on Commonwealth State funding relations will just have a quick comment on that and then we will come back to the second part.

    Thanks Denise, if I can just make an additional comment, Victoria has committed as part of the addendum to the reform agreement to provide an attestation to the IPAA and effectively the Commonwealth on the quality of our data and so they're expecting that there will be certain things that we need to do in that space and these sorts of documents help to support our position back to the Commonwealth and the IPPA, regarding the accuracy of the Victorian data.

    So by issuing these things it allows us to make sure that we are meeting the commonwealth requirements, it is not a reflection  of our expectation that things have changed in the sector, but it does rely for us importantly in making sure that we've done our due diligence with the Commonwealth. To say yes, we've met all our requirements, yes we're confident that our sector is doing the right thing please do not go back and make changes retrospectively to our classification, we you know kind of impacts which all then actually impact our revenues going forward as well as in the past so keep an eye on the news Dan do you want to talk about the second part?

    It's not my area of expertise but I take your comments onboard and I can refer them to the appropriate colleagues.

    Thanks, other questions from the floor while I just check, one just down here.

    Um Adam from Mildura again, I guess my questions around the pricing and matching that up with the costs and the transparency around that I guess unless we're a massive outlier in Mildura, I kind of find it hard to understand that the price can go up by you know one point something percent or two point something percent within a year, when I know that our organization costs have gone up far greater than that and I wouldn't have thought thatI'm the outlier in the room, on that basis, so if there's any way you can show us we get from your costing data to a price factor and we can maybe even look at us as an outlier if we are?

    Trying to work out who is going to answer this one? Price, I think that is a Phuong Question.

    Price is always a challenge, prices as you're well aware is set by our allocation from Treasury and it has been challenged acknowledged over the past few years with the efficiency dividend of 1% imposed, when Dan creates the weights they are relative based on the cost data and I think we distribute the cost data collection files which underpin the cost weight development usually after the CEO signs the conditions of release, so we can happy to share that. Price is a bit more complicated this is something that's always a controversial topic at every CFO meeting but I think we have to work within the limited pool that we get from Treasury and I understand the additional cost pressures above two and a half percent that all Health Services are facing.

    So I think it is fair to say that the costs in the cost data, drives the relativities within the model rather than actually drives the price now that you know from an economics point of view it kind of doesn't match up but actually that is kind of the difference between what actually happening in the cost is actually driving the cost weight machine rather than actually the price which is very much around how much do we get as a total bucket across the system, how do we divvy that up to seemingly kind of relativity's in terms of being fair around those prices, so there is a disconnect, I would say but what again using both parts of that argument around our business with our central colleagues in terms of DTF to argue the case for actually we cannot continue to hold price, you know, at the rate of growth when we know cost data is actually showing us cost of you know rising delivery in terms of the way that we are actually running our services that is not inefficiency, it is actually a growing cost, so slightly disconnected in the model if you like but actually very important two parts those pieces do get joined up.

    Yep it's a good point over the longer-term price does have to track with cost over the longer term unless and if it doesn't then there must be something else to compensate, but over the longer term they do have to track.

    Other questions from the floor? Another one up the back here.

    Thanks Ruth again I just want to ask you regarding a National Bowel Cancer screening Colonoscopy's, it's often difficult to identify if the patient has had a fecal occult blood test from colonoscopy due to the screening by the National cancer screening or whether you know it's been a rotary or the GP, often the hems HIMs will you know I would imagine would have to actually find out where this has happened in order to fulfill that. Iis it two questions is it okay for them to find out where they have come from and is there any way of linking to the National bowel cancer screening to be able to get a direct fee to know who is a patient?

    I might have to take that one notice, I'm not aware of their being a possibility link between the two data sets I don't think based on my advice from the programs is that I don't think it's inappropriate to find out ifthey had been referred our condition of funding is that they must be referred to count against the bowel screening target otherwise they count against your normal public-private WEIS target.

    Okay if there's no final questions and it looks like there are none but Dan looks like he would like to make a comment.

    Thanks Denise Dan mentioned that we are in the process of updating the WIES calculator and this is an opportunity for you to provide us with any feedback about improvements that we might try to incorporate into the model so if you do wish to put some ideas forward can you send them through to Dan, I'll nominate him, so that we can have a look at whether or not we can include them plus we are looking at expanding the spectrum of the WIES calculator to pick up AN-SNAP and potentially also the WEIS24 model is part of a single calculator.

    So I'll take that as a comment for your information.

    Thanks you I'll just like to thanks Dan for that presentation and Phuong But he is coming back.


Presentation from the Funding Models Forum, 17 August 2017.

Reviewed 18 October 2017


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