Joseph Rugg's Health Law Blog

In June, the MGMA-ACMPE released the results of a questionnaire that ranked members’ most-pressing practice management challenges. In this edition of “Practice Makes Perfect,” we’ll tackle No. 2 on that list: Preparing for reimbursement models that place a greater share of financial risk on the practice.

One of the many hot topics at our upcoming annual conference in San Antonio will be the changing healthcare environment and how practices can—and should—prepare for new payment methodologies. The federal government and commercial insurance companies are in the midst of changing the way they pay hospitals and doctors. Some of these changes are the result of the Patient Protection and Affordable Care Act as well as market forces. These changes will affect practices in all settings, and it’s important to prepare for reimbursement models that place a greater share of financial risk on the practice.

Physicians may soon be at financial risk as payers test and adopt new payment methods. The CMS and private insurers are proposing models to replace separate payments to hospitals, doctors and other providers with a single bundled payment, and we are seeing multiple definitions of bundling. A common type of bundled payment involves a single payment for all services furnished before, during and after a hospitalization, including outpatient diagnostic tests, inpatient facility costs, drugs, supplies and the professional services of every physician involved in the patient’s care.

In addition, the CMS and many insurers are testing variations on the capitation payment concept that was widely used in the health maintenance organization craze of the 1990s. Commonly referred to as “global payment,” this reimbursement method pays a set amount per patient (usually adjusted by demographics) and the provider accepts responsibility for a predetermined set of services regardless of the costs.

Both bundled and global payment reflects a sea change from the traditional fee-for-service payment system. Payers hope that bundled and global payments will create incentives for primary-care physicians, specialists and hospitals to better coordinate services and share accountability for the cost and quality of services. They hope the new payment systems will improve the care their beneficiaries receive while lowering the total cost of care by eliminating redundant services.

These new payment methods require doctors to think in new ways and will challenge the information systems of even the most sophisticated fee-for-service practice. Bundled and global payments change a practice’s profit calculation from emphasizing service volume to operating efficiency.

In this new payment environment, practices that gather the right information and provide high-quality, lower-cost care will be the most profitable.

See on home.modernphysician.com

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