Funding consultation-liaison psychiatry via Medicare screening

Despite offering many benefits to patients, the hospital, and the hospital staff, an academic psychiatric consultation service is difficult to fund. By screening Medicare patients for psychiatric complications and comorbid conditions, the consultation-liaison (C-L) service can generate incremental revenue for the hospital by moving patients from lower-paying to higher-paying Diagnostic Related Groups (DRGs). The C-L service chief can negotiate with the hospital to obtain a portion of these incremental funds to support the C-L service. Concurrent psychiatric disorders that move patients to more complex DRGs include substance abuse, substance dependence, drug-induced delirium, drug-induced organic affective syndrome, and psychotic depression. This paper presents a method of calculating the incremental hospital revenue generated by such screening along with the results of applying the method to selected DRGs at a west coast teaching hospital. Implementing this program at that hospital in fiscal year 1989 would have resulted in screening 142 Medicare patients (2.2% of Medicare admissions), discovering an estimated 25 patients with comorbid psychiatric conditions, and generating $51,800 in incremental hospital revenue. In creating a screening program, a C-L service chief must be prepared to negotiate issues with the medical records department, referring physicians, and the hospital administration.