Despite attempts to move provider payment away from fee-for-service and toward more risk-based alternatives, fee-for-service sustains to be dominant — and is growing, in accordance to a study issued in Health Affairs.
In fact, authors Samuel Zuvekas and Joel Cohen claimed that almost 95% of all physician office visits in the year 2013 were reimbursed in that fashion.
“New payment models, like accountable care organizations (ACOs), may include a capitation payment to the overall agency, but practices are still paid on a fee-for-service basis.”
In the period of 1980s and 1990s, pure capitation — in which a physician or other contributor gains a fixed monthly payment each patient, regardless of the services given — was extremely touted as a mechanism for reigning in prices, the authors stated. But uncertainties were raised about physician incentives for offering high-quality care, and willingness to accept financial threat.
A 2010 Health Affairs study founded that merely 6.6% of all physician office visits were covered under pure capitation arrangements in the year 2007. Updated findings show that merely 5.3% of such visits were under capitation by the year 2013, with the remaining 94.7% reimbursed under fee-for-service.
The overall percentage of physician office visits covered under capitation arrangements reduced steeply in the early 2000s, research discovered, and experienced a long, slow decline from the time period of 2007 to 2013. Capitation refused substantially for persons enrolled in private or Medicaid health maintenance agencies; more recently, capitation stabilized in HMOs — at around one in 5 visits for private HMOs in the year 2013, and at fewer than one in ten visits for Medicaid HMOs in the similar year. So while HMO policies themselves are capitates, they significantly reimburse physicians on a fee-for-service basis.
Attempts to shift provider payment away from the fee-for-service paradigm have developed on relevant Affordable Care Act provisions, and reacted to other pressures to restrain costs, the authors asserted. They cite as an instance the National Commission on Physician Payment Reform, convened by the Society of General Internal Medicine in the year 2013, which suggested that payers “highly eliminate stand-alone fee-for-service payment to medical practices.”
More recently, Department of Health and Human Services Secretary Sylvia Burwell declared a target of having “30% of Medicare payments tied to quality or value through alternative payment models by the end of the year 2016, and 50% of payments by the end of the year 2018.”
Zuvekas and Cohen discuss those latest models attempting to move the payment focus from quantity to quality may be more victorious than traditional capitation.
“For instance,” they write, “the Medicare Pioneer ACO demonstrations are designed to test a shared-savings payment policy for agencies that are eager to accept few of the financial risk for offering care. An initial evaluation of the program recommended that it saved $384 million during its first 2 years.”
They claim that, to be successful, payment reform has to face a basic reality: that individual physicians and practices are unwilling to get agreed to all of the risk for providing care. That means payment reform would require operating within a fee-for-service framework at the level of the individual physician or practice.
“In specific, contributors’ willingness to engage in new payment mechanisms will likely be closely tied to the extent that they are needed to assume risk,” the authors wrote. “Finding the right balance in risk sharing … so that contributors are willing to participate on a widespread basis while giving meaningful incentives to deliver efficient care is significant to the success of any latest approach.”
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