Case Study: Tracking TAVR Halo Effect.

CASE STUDY: Tracking TAVR Halo Effect

When determining whether to begin or maintain a Transcatheter Aortic Valve Replacement (TAVR) program, hospitals are encouraged to analyze the strategic, clinical, and financial impact of the program. While examining the financials of any program, hospital administration should examine both the revenues directly attributable to a program along with revenue generated as a byproduct of the service. This financial analysis, known as the Halo Effect or program economics, can help hospital administration make better informed decisions about programs that may appear economically challenging on the surface.

This case study describes the process of comprehensively tracking and analyzing the Halo Effect of a TAVR program based on a case study at University of Colorado Hospital (UCH). During the first year of its TAVR program, UCH tracked a slight negative contribution margin*. However, after conducting a comprehensive analysis that included all revenue generated by procedures and tests associated with the 120 patients evaluated for TAVR, UCH realized a substantially positive contribution margin.

Specifically, in the first year, UCH saw a significant increase in traditional open aortic valve replacement (AVR) surgery and balloon aortic valvuloplasty (BAV) that was directly attributed to the opening of its TAVR program.

Overview UCH opened its TAVR program in early 2012, performing its first TAVR on March 13, 2012.

During the first year, UCH experienced a small negative contribution margin when evaluating the TAVR procedure economics. However, the hospital’s Heart Team began tracking incremental revenue generated by the TAVR program and found that the overall program recorded a substantial positive contribution margin during this period.

*Contribution margin defined as payment minus direct costs for 37 TAVR cases=-$895 per case.

“It’s important to capture incremental new business to our valve program because every patient who is referred for TAVR does not necessarily go on to have the procedure.”

– Lorna Prutzman, RN, MSN, Executive Director of Cardiac and Vascular Services at University of Colorado Hospital

Qualifying a Patient for TAVR Generates Revenue UCH continues to track all direct and incremental revenues and costs in monthly reports that are presented to hospital administration. In its analyses, UCH tracks two categories of incremental revenues (see accompanying chart at end of paper): 1. TAVR Evaluated - Revenue generated by the procedures and tests associated with determining TAVR eligibility 2. TAVR Incremental - Revenue generated by incremental procedures that may be appropriate when a patient is not suitable for a TAVR. These procedures include AVR, BAV, Percutaneous Coronary Intervention (PCI), Mitral Valve procedures, and others.

TAVR Evaluated Although most patients referred to the valve clinic have been deemed inoperable or high risk by either a cardiologist or cardiac surgeon, UCH tracks the revenue stream associated with ensuring patients meet the strict criteria necessary to become eligible for TAVR. Common procedures in the TAVR work-up include: Cardiac Catheterization Pulmonary function test  CTA and/or MRI  Transesophageal Echocardiogram (TEE) or Transthoracic Echocardiogram (TTE)  Blood work  

TAVR Incremental UCH also tracks revenue from incremental procedures generated by patients who are not deemed eligible for TAVR. Approximately half of the patients referred to UCH for TAVR evaluation do not qualify, making this revenue category essential to track, Prutzman says.

“Although the patient may have been deemed inoperable or high risk by the referring physician, UCH may determine that the patient is operable,” Prutzman says. As a result, “UCH aortic valve replacement volume and balloon aortic valvuloplasty volume have increased. Our hypothesis is that the increase in our aortic volume is related to TAVR because of contact with patients themselves or contact with referring cardiologists.”

“Our analysis captures the volume of new patients and the entire picture of expenses and revenues to manage a TAVR program. If you only look at the patients who end up being scheduled for a TAVR procedure, you are not reflecting the entire program in your numbers.”

– Lorna Prutzman

TAVR provides a halo effect in both reputation and revenues, Prutzman says. By having the program, patients (and often their family members) are attracted to considering the hospital, while the program also attracts new referring physicians.

150

Start of TAVR Program

100

61 50

105 60

55

39

31 14

0 FY 2011

FY 2012

FY 2013

FY 2014

Aortic Valve Replacement TAVRs

The Process of Tracking Incremental Revenues “There is no magic bullet for this; it takes a lot of manual work,” Prutzman says. “But it’s important to provide administration with a complete financial picture because TAVR-specific DRGs historically have not produced a positive contribution margin.”

With the new DRGs, and improving your management of costs, your facility will likely demonstrate a positive contribution margin with TAVR alone, she adds.

In order to track incremental revenues, UCH takes the following steps: 

Scheduling assistant in Valve Clinic registers all TAVR referrals in the hospital’s EPIC EMR and then records the patient’s MRN and date of call in an Excel spreadsheet.



Each month, an abstractor from the hospital’s financial team uses MRNs to pull a report that includes; • Patient last name and MRN • Part of TAVR admit (Y or N) • Performed in cath lab or hybrid OR • Admit and discharge date • Outpatient vs. inpatient • Payor • DRG, ICD 9 Dx, ICD 9 procedures • Attending physician; attending service • Charges • LOS • Reimbursement • Direct Costs • Indirect Costs • Treatment plan • Outcome



A formal report aggregating all patient revenues (with back-up provided by individual patient) is compiled and presented to hospital management by the cardiovascular services director.

Resources UCH uses Allscripts EPSi, which is integrated with the hospital’s EPIC electronic medical record system, to pull and compile this report. The monthly report requires the input of a chart abstractor to collect the data and a financial analyst to finalize the analysis.

EXECUTIVE SUMMARY: A review of direct costs and contribution margins of the TAVR program may find a small or negative contribution margin. However, if incremental revenues generated from TAVR work-ups and alternative therapies are included, most hospitals may see a substantially positive financial result. In addition, hospitals may experience an uptick in valve program referrals overall as a result of offering the TAVR procedure.

Hospitals are advised to implement a formal and ongoing review that will examine and document a holistic financial and volume picture based on the addition of TAVR.

TAVR Halo Effect Report Template Valve Program Dashboard

Reimb. Direct Cost

Halo Effect Summary

Incremental Screening

Clinic Diagnosis

CPT Code

Transthoracic Echocardiogram (TTE)

93306, 93307

Transesophageal Echocardiogram (TEE)

93312, 93313, 93314, 93318, +93320, +93321, +93325

Thoracic/Chest X-Ray

71010, 71015, 71020, 71021, 71023, 71030, 71034, 71035

Contribution Margin

Volume

Reimb.

Direct Cost

Contribution Margin

Volume

Reimb.

Direct Cost

Contribution Margin

Other (Echo Test, Nuc Med Test or Diagnostic Test) Sub-Total

Vascular Imaging

Abdominal Angiogram

36200, 75625, 75630

Abdominal Angio-Lower Extremity

36200, 75716

CTA (Abdomen, Chest, Pelvis)

71275, 74176, 74177, 74178, 74174, 74175, 75635

CTA (Abdomen, Pelvis)

74174

Other Vascular Diagnostics Sub-Total

Cardiac Imaging

Cardiac CT(A)

75572, 75574

Cardiac CT(A) with CA Test

75571

Cardiac MRI

75557, 75559, 75561, 75563

Left/Right Heart Cath

93453

Left/Right Cath with CA

93460, 93461

Right Heart Cath w CA

93456, 93457 Sub-Total

Other

Lab Work (BNP, PT/INR, CBC, BMP/CMP, Sub-Total

TOTAL

Incremental Procedures

Procedures

MS-DRG Codes

Balloon Valvuloplasty (00.24, 35.96)

250, 251

Open AVR (35.11, 39.61, 35.93, 35.21, 35.22, 35.33, 35.25)

216, 217, 218, 219, 220, 221

Mitral Valve Repair (35.02, 35.12, 39.61, 35.23, 35.24)

216, 217, 218, 219, 220, 221

CABG (36.11, 36.12, 36.13, 36.14, 39.61, 231, 232, 233, 36.15, 35.16, 36.17, 36.19) 234, 235, 236 Other (stents, etc.)

TOTAL

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