Discuss how Fee for Service versus Managed Care Models of Reimbursement Have Contributed Risk Avoidance in their Contract Negotiations
Centers for Medicare and Medicaid Services (CMS), have been introducing additional financial incentives, quality reporting and care coordination approaches into their reimbursement models. While physician employers, whether physicians practices, hospitals or health systems, are still mostly paid based on fee-for-service and capitated risk payer methodologies, increasingly hospital, health system and physician group reimbursement has elements which include:
- financial incentives that tie to achievement of specific quality or performance measures;
- 53 incentives for managing total cost of care or increased use of generics
- bundled payments to achieve more cooperation between stakeholders to achieve outcomes;
- global capitation for professional services, institutional services and/or pharmaceuticals;
- a global reimbursement for episodes of care; penalties or lower reimbursement for preventable hospitalizations;
- and additional payments to patient-centered medical homes.
Additionally employer transparency obligations primarily benefit the employed or prospectively employed physician, as opposed to the employer, this is not the case. For many physician practice employers, particularly the small or solo practices in which most of the physicians in the United States still practice, entering into an employment relationship with a physician is a very serious matter that involves a significant commitment of resources and is not without significant risk.
Farley, Dean E. 2000. “Achieving a Balance Between Risk and Return.” Healthcare Financial Management
Keegan, Arthur J. 1994. “Hospitals Become Cost Centers in Managed Care Scenario.” Healthcare FinancialManagement
Benoff, Marc, and Daniel M. Grauman. 1997. “Risk Sharing in an Integrated Delivery System.” HealthcareFinancial Management