Most delivery system reforms, like ACOs and medical homes, are coupled with non-fee-for-service payment methodologies. A brief from PWC’s Health Research Institute explores in a relatively superficial manner the use and growth of these methods, which include bundled or episode-based payments for treatments for certain conditions and various risk-based approaches for taking responsibility for all of a patient’s care needs. (PWC Report) CMS has indicated that it hopes to have more than 50% of payments in a value-based reimbursement model by 2018 and 90% at least partly dependent on quality improvement efforts. In addition to CMS’ efforts, many private payers are also implementing more risk-based payments According to PWC’s survey, however, over 50% of current physician reimbursement is still fee-for-service based. Many provider organizations have understandably been reluctant to fully commit to moving away from fee-for-service, fearing impacts on revenue and greater administrative expense and complexity. They may not have a choice for long. This summer CMS told over 800 hospitals that they will only be paid for knee and hip replacements via a bundled methodology. Several other procedures are bundled on a voluntary basis, for now. Early results suggest most hospitals lose money on the bundles. The report gives several examples of providers and employers who are pushing more at-risk payments, and the challenges arising under these methodologies. For providers, at-risk payments for complex conditions mandate an ability to coordinate care across multiple settings and to figure out how to share the at-risk payment. And since it is highly likely that at least some of the time they are going to lose money, having financial resources to sustain taking at-risk payments over several years is critical.
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About this Blog
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].
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