Costing Evidence and Requirements for the Life Care Plan
Ashley Kelly BSN, RN, CLCP
Introduction:
A Life Care Plan is a dynamic and comprehensive document which outlines necessary care, treatment, services, equipment, and the associated costs for an individual who has experienced a catastrophic injury. The costs of the plan should, when medically necessary, span the individual’s lifespan to ensure appropriate care, treatment, and support to facilitate his or her quality of life with maximum independence. Guiding and authoritative requirements for the production of a Life Care Plan are delineated through Consensus and Majority Statements, last published in 2018 within the Journal of Life Care Planning. These statements specify proper methodology that should be utilized when researching and establishing costs for a Life Care Plan. Consensus was obtained through a Delphi study with active participation and involvement by a variety of life care planning organizations and professionals, and is applicable to all Life Care Planners, no matter their professional discipline or educational background.
Specifically, Consensus Statement #85 states:
“Best practices for identifying costs in life care plans include:
a. Verifiable data from appropriately referenced sources
b. Costs identified are geographically specific when appropriate and available.
c. Non-discounted/market rate prices
d. More than one cost estimate, when appropriate”
(Johnson, Pomeranz, & Stetten, 2018, p. 17).
For the purposes of this article, I will be utilizing Consensus Statement #85 as a guide and framework to identify proper practices and methodologies when developing the costs of a Life Care Plan. Each heading directly correlates to a portion of Consensus Statement #85.
Life Care Plans should have verifiable data from appropriately referenced sources.
Certain tools should be applied when developing the costs or charges for goods and services within a Life Care Plan. Medical databases that are published and statistically valid are regularly relied upon as a reference source by Life Care Planners for costing. Databases often used when developing a Life Care Plan are the American Hospital Directory, Context 4 Healthcare, FAIR Health, and the Physicians’ Fee Reference. When using these databases, appropriate medical coding should be used to obtain pricing. Medical coding systems are updated annually, and proper usage of such codes is necessary to create a Life Care Plan with valid and reliable costing.
The following are the most commonly used coding systems and their abbreviations:
- Current Procedure Terminology (CPT)
- Healthcare Common Procedure Coding System (HCPCS)
- International Classification of Diseases 10th Revision Clinical Modification (ICD-10-CM)
- International Classification of Diseases 10th Revision Procedure Coding System (ICD-10-PCS)
- Ambulatory Payment Classification (APC)
- Medicare Severity-Diagnosis Related Group (MS-DRG)
These coding systems serve different primary purposes. Maniha (2020) describes the following:
“The ICD-10-CM represents the why (diagnosis) portion of the scenario. The CPT code represents the who (physician), what (the procedure) and/or the where (outpatient facility). The MS-DRGs represent where (inpatient facility). The ICD-10-PCS represents what (inpatient procedure), The Healthcare Common Procedure Coding System (HCPCS) includes what's included, for example equipment, supplies, orthotics, prosthetics, ambulances, devices, and some professional services” (p. 15).
Also, it should be noted that when creating a Life Care Plan, these medical databases and the correct code for each item or service should be displayed within the plan. Based upon consensus requirements, costing resources must be transparent and consistent for the plan’s reliability and validity.
Life Care Plans’ identified costs are geographically specific when appropriate and available.
Life Care Plans should be individualized to the evaluee. Healthcare goods and service costs vary greatly from one geographic region to another. Therefore, Life Care Planners should apply geographically specific costing parameters when developing their plans. After selecting the appropriate medical code, the Life Care Planner should consider the likely geographic region in which the service, treatment, and/or care will be performed. Charges vary based upon geographic area and evolve over time. Depending on the specific resource used, a geographic adjustment factor (GAF) may need to be applied to the price to calculate the appropriate regional cost.
Life Care Plans should provide non-discounted/market rate prices.
Life Care Plans should be individualized to the needs of the evaluee without regard to funding sources. According to Deutsch & Sawyer (2004),
“At no time during the plan development process should budgetary concerns influence care and rehabilitation recommendations. The life care plan was designed with the intention of citing all of the items and services made necessary by the onset of a disability/injury” (p. 5-6).
With that being said, Life Care Planners are cautioned to use both the highest and the lowest costs for any item. The pricing for items and services should not be driven by referral sources or budgetary concerns, but rather the necessity of the specific items or services needed for the evaluee as a result of a catastrophic injury.
The Life Care Planner should use costs that are Usual, Customary, and Reasonable (UCR). According to the American Medical Association the definition of UCR is as follows:
“(a) ‘usual’ fee means that fee usually charged, for a given service, by an individual physician to his private patient (i.e., his own usual fee).
(b) a fee is ‘customary’ when it is within the range of usual fees currently charged by physicians of similar training and experience, for the same service within the same specific and limited geographical area; and
(c) a fee is ‘reasonable’ when it meets the above two criteria and is justifiable, considering the special circumstances of the particular case in question, without regard to payments that have been discounted under governmental or private plans”
(AMA Policy H-385.923, 2021).
Usual, Customary and Reasonable (UCR) pricing typically falls between the 75th to 80th percentile ranges (Weed & Berens, 2018). Life Care Planners should not be using Medicare or other insurance pricing when creating a Life Care Plan, unless jurisdictional or legal venue issues require such to be provided.
Life Care Plans can have more than one cost estimate, when appropriate.
Other resources can be used in addition to medical databases for costing within a Life Care Plan. These additional geographically appropriate and valid resources should provide a range or data point to develop Usual, Customary, and Reasonable pricing for the plan. Direct contact with vendors and/or healthcare providers within the evaluee’s geographical region can be utilized for costing parameters within a Life Care Plan when appropriately documented. When making direct contact with these vendors and/or providers, it is important for the Life Care Planner to request non-discounted costs (i.e., not insurance or sliding scales charges). The evaluee’s recent medical billing records can be another appropriate source for costing information. Billing records from the evaluee’s current treatment providers, and the specific coding from his or her past care, can provide demonstrated data to help determine and/or confirm expected future costs.
Conclusion:
A consistent approach to identifying the costs of medical services and goods is essential to creating validity for a Life Care Plan. The plan should be individualized to the evaluee’s specific medical needs and contain appropriate UCR costs. Ultimately, accurate costing throughout a Life Care Plan is integral for supplying the appropriate care, treatment, services, and equipment, fundamentally promoting quality of life and independence for an evaluee following a catastrophic injury.
About the Author
Ashley Kelly was employed for 11 years at the Medical University of South Carolina in the High-Risk Obstetrics and Gynecology Unit after earning her nursing degree. In addition to caring for obstetric and gynecological patients in the hospital setting, Ms. Kelly was an educator for the MUSC Prenatal Wellness Clinic and received several nominations for the nationally recognized Daisy Award for Extraordinary Nurses. Ms. Kelly completed a 120-hour post-graduate training program in Life Care Planning through the Institute of Rehabilitation and Education Training. She is currently a partner, Certified Life Care Planner and Forensic Nurse Researcher at InQuis Global. She is presently in residency pursuing her Doctor of Nursing Practice (DNP), with a focus in Family Medicine. She received the Medical University Hospital Authority (MUHA) full academic scholarship for her Bachelor of Science in Nursing (BSN), and recently received the Nina Smith Scholarship during her doctoral program. Ms. Kelly is a Registered Nurse (RN), and a Board-Certified Life Care Planner (CLCP).
References:
Article Title/Date: “Consensus and Majority Statements Derived from Life Care Planning
Summits Held in 2000, 2002, 2004, 2006, 2008, 2010, 2012, 2015 and 2017 and Updated Via Delphi Study in 2018/2018”
Journal Title/Lead Author: Journal of Life Care Planning/Johnson, C.
Publication Info: Volume 16, Issue #4, Pages 15-18
Book Title/Date: Life Care Planning and Case Management Handbook (Fourth Edition)/2018
Editors: Roger O. Weed & Debra E. Berens
Publisher: Routledge
Policy Statement: Definition of Usual Customary and Reasonable (Policy H-385.923)
Publisher: American Medical Association (AMA)
Book Title/Date: A Guide to Rehabilitation (Volume 1)/ 2004
Journal Title/Lead Author: Journal of Life Care Planning/Johnson, C.
Publisher: AHAB Press
Article Title/Date: “Components of a Cost/Charge Scenario as Utilized in the Life Care Plan”/2020
Journal Title/Lead Author: Journal of Life Care Planning/Maniha, A.
Publication Info: Volume 18, Issue #4, Pages 13-34
