the cycle of reimbursement models
DESCRIPTION
Reimbursement models have changed over time throughout the 20th century. Learn about the changes, the differences in payment models, future strategies for the government, commercial payers and providers, as well as the return to a more ACO-focused payment model. This presentation is part of our Accountable Care Organization series.TRANSCRIPT
The Cycle of Reimbursement ModelsAdele AllisonNational Director of Government Affairs, SuccessEHS
Brief History of Reimbursement Models
1917
Lumberjacks of the NorthwestFull Risk, Community-Based
The BluesThird-party Fee-for-Service (FFS), Community-based
1929-39
Commercial FFSEmployer-sponsored Health Coverage
1940-60s
1965
Government FFSMedicare & Medicaid
Physician Fee SchedulesAnd Diagnosis Related Groups
1974-89
Partial to Full RiskCapitation, Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO)
1985-90s
Costs Outpacing InflationBoomers, Increased Patient Portion, Leading to Accountable Care Organizations (ACO)
2000s
2012
ACOs to be ImplementedA Return to Community-Based Care
Reimbursement Strategies
GovernmentStrategies
1
Legislation & PolicyMove from Pay-for-Service to Pay-for-Value
1997 - BBASustainable Growth Rate (SGR) Formula
2006 - TRHCAPhysician Quality Reporting Initiative (PQRI) – Defined Value
2009 - ARRAEHR Adoption, Clinical Data Reporting and Evidence-based Care
2010 - PPACAValue-based Modifiers, Episode Groupers, Bundled Payments
ISSUEMedicare Sustainable Growth Rate Formula = 27.4% Adjustment
CommercialPayer
Strategies
2
Reimbursement ModelsCapitation, Withholds, FFS, Bundling
ISSUEMedicare Sustainable Growth Rate Formula = 27.4% Adjustment
ProviderStrategies
3
Defense Strategies, Large Group Practice, Employment, Concierge Practice
Example: Full Risk, or Capitation / Provider Risk
ABC Health Plan Enrollees
Dr. Red Dr. Blue
ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 Patients 500 Patients
ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsMedian Age 27
500 PatientsMedian Age 58
ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsMedian Age 27
100 have Chronic Disease
500 PatientsMedian Age 58
350 have Chronic Disease
ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsMedian Age 27
100 have Chronic Disease
$10 PMPM
500 PatientsMedian Age 58
350 have Chronic Disease
$10 PMPM
ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsX
$10 PMPM=
$10,000 / Month
500 PatientsX
$10 PMPM=
$5,000 / Month
ABC Health Plan Enrollees
Dr. Red Dr. Blue
20 Patients / Month
X $75 Average Collection per Visit
$1,500 / Month
FFS Cost = Good
100 Patients / MonthX $75 Average
Collection per Visit$7,500 / Month
FFS Cost = Bad
ABC Health Plan Enrollees
Dr. Red Dr. Blue
ADVERSE SELECTION
Example: Fee-for-Service, or Health Plan / Employer Risk
Episodic Care(interventions aimed at patient cure or
restoration to previous level of functioning)
Vs.Over-Utilization
(Excessive or unnecessary utilization of health services by patients or physicians)
Episodic Care
Episodic Care
Disjointed care continuum
Episodic Care
Disjointed care continuumLimited prevention
Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease management
Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Conflicting care plans
Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Conflicting care plansTreatment duplication
Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Conflicting care plansTreatment duplicationPoor quality and safety
Over Utilization
Over Utilization
Provider paid fee for every service
Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
No accountability
Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
No accountabilityNo incentive to manage chronic disease
Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
No accountabilityNo incentive to manage chronic disease
“Take what I can get” mentality
Over Utilization
Episodic Care
INCREASED RISK
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