The Use of Ancillary Services Under a Bundled Care Versus a Fee-For-Service Payment Model

PURPOSE: The Radiation Oncology Alternative Payment Model (APM) is a Medicare demonstration project that will test whether prospective bundled payments to a randomly selected group of physician practices, hospital outpatient departments, and freestanding radiation therapy centers reduce overall expenditures while preserving or enhancing the quality of care for beneficiaries. The Model follows a complicated pricing methodology that blends historical reimbursements for a defined set of services made to professional and technical providers to create a weighted payment average for each of 16 cancer types. These averages are then adjusted by various factors to determine APM payments specific to each participating provider. METHODS: This impact study segregates APM participants into rural and urban groups and analyzes the effect of the Radiation Oncology Alternative Payment Model on their fee-for-service reimbursements. RESULTS: The main findings of this study are (1) the greater net-negative revenue impact on rural facilities versus urban facilities that would have participated in the Model this year and (2) the relative lack of high-value treatment services (ie, stereotactic radiotherapy and brachytherapy) delivered by rural facilities that exacerbates their negative impact. CONCLUSION: As such, rural providers participating in the Model in its current form may face greater risk to their economic viability and greater difficulty in funding technology improvements necessary for the achievement of high-quality care compared with their urban counterparts.

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Designing Payment Contracts for Healthcare Services to Induce Information Sharing: The Adoption and the Value of Health Information Exchanges (HIEs)

MIS Quarterly ◽

10.25300/misq/2021/14809 ◽

2021 ◽

Vol 45 (2) ◽

pp. 637-692 ◽

Cited By ~ 1

Author(s):

Mehmet Ayvaci ◽

Huseyin Cavusoglu ◽

Yeongin Kim ◽

Srinivasan Raghunathan

Keyword(s):

Health Information ◽

Healthcare Services ◽

Care Quality ◽

Switching Behavior ◽

Fee For Service ◽

Payment Model ◽

Health Information Exchanges ◽

Provider Payment ◽

The Government ◽

Payment Models

Recent initiatives to improve healthcare quality and reduce costs have centered around payment mechanisms and IT-enabled health information exchanges (HIEs). Such initiatives profoundly influence both providers’ choices in terms of healthcare effort levels and HIE adoption and patients’ choice of providers. Using a game-theoretical model of a healthcare setup, we examine the role of payment models in aligning providers’ and patients’ incentives for realizing socially optimal (i.e., first-best) choices. We show that the traditional fee-for-service (FFS) payment model does not necessarily induce the first-best solution. The pay-for-performance (P4P) model may induce the first-best solution under some conditions if provider switching by patients during a health episode is socially suboptimal, making provider coordination less of an issue. We identify an episode-based payment (EBP) model that can always induce the first-best solution. The proposed EBP model reduces to the P4P model if the P4P model induces the first-best solution. In other cases, the first-best inducing EBP model is multilateral in the sense that the payment to a provider depends not only on the provider’s own efforts and outcomes but also on those of other providers. Furthermore, the payment in this EBP model is sequence dependent in the sense that payment to a provider is contingent upon whether the patient visits a given provider first or second. We show that the proposed EBP model achieves the lowest healthcare cost, not necessarily at the expense of care quality or provider payment, relative to FFS and P4P. Although our proposed contract is complex, it sets an optimality baseline when evaluating simpler contracts and also characterizes aspects of payment that need to be captured for socially desirable actions. We further show that the value of HIEs depends critically on the payment model as well as on the social desirability of patient switching. Under all three payment models, the HIE value is higher when switching by at least some patients is desirable than when switching by any patient is undesirable. Moreover, the HIE value is highest under the FFS model and lowest under the P4P model. Hence, assessing the value of HIEs in isolation from the underlying payment mechanism and patient-switching behavior may result in under- or overestimation of the HIE value. Therefore, as payment models evolve over time, there is a real need to reevaluate the HIE value and the government subsidies that induce providers to adopt HIEs.

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Meaningful Physician Payment Reform in Oncology

Journal of Oncology Practice ◽

10.1200/jop.2013.001248 ◽

2013 ◽

Vol 9 (6S) ◽

pp. 49s-53s ◽

Cited By ~ 8

Author(s):

Kavita K. Patel ◽

Alexander J. Morin ◽

Jeffrey L. Nadel ◽

Mark B. McClellan

Keyword(s):

Cancer Care ◽

Reimbursement System ◽

Fee For Service ◽

Physician Payment ◽

Payment Reform ◽

Payment Model ◽

New Models

The authors describe various new models of physician payment that can serve as a foundation for a shift away from the current reimbursement system for cancer care to support better outcomes and avoid preventable costs, as well as how these reforms can be supported in a blended payment model that transitions away from but still contains elements of fee-for-service payments.

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Bundled Payment Models in Spine Surgery

Global Spine Journal ◽

10.1177/2192568220974977 ◽

2021 ◽

Vol 11 (1_suppl) ◽

pp. 7S-13S

Author(s):

Kevin Hines ◽

Nikolaos Mouchtouris ◽

Charles Getz ◽

Glenn Gonzalez ◽

Thiago Montenegro ◽

...

Keyword(s):

Spine Surgery ◽

Clinical Pathways ◽

Cost Savings ◽

The United States ◽

Fee For Service ◽

Potential Cost ◽

Bundled Payments ◽

Bundled Care ◽

The Cost ◽

Payment Models

Study Design: The following is a narrative discussion of bundled payments in spine surgery. Objective: The cost of healthcare in the United States has continued to increase. To lower the cost of healthcare, reimbursement models are being investigated as potential cost saving interventions by driving incentives and quality improvement in fields such a spine surgery. Methods: Narrative overview of literature pertaining to bundled payments in spine surgery synthesizing findings from computerized databases and authoritative texts. Results: Spine surgery is challenging to define payment modes because of high cost variability and surgical decision-making nuances. While implementing bundled care payments in spine surgery, it is important to understand concepts such as value-based purchasing, episodes of care, prospective versus retrospective payment models, one versus two-sided risk, risk adjustment, and outlier protection. Strategies for implementation underscore the importance of risk stratification and modeling, adoption of evidence based clinical pathways, and data collection and dissemination. While bundled care models have been successfully implemented, challenges facing institutions adopting bundled care payment models include financial stressors during adoption of the model, distribution of risks, incentivization of treating only low risk patients, and nuanced variation in procedures leading to variation in costs. Conclusion: An alternative for fee for service payments, bundled care payments may lead to higher cost savings and surgeon accountability in a patient’s care.

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Adult capped dental payment model applied within a university setting: an Australian reflective case study

BMC Oral Health ◽

10.1186/s12903-021-01774-y ◽

2021 ◽

Vol 21 (1) ◽

Author(s):

Jennifer Hanthorn Conquest ◽

John Skinner ◽

Estie Kruger ◽

Marc Tennant

Keyword(s):

Oral Health ◽

Clinical Supervision ◽

Dental Care ◽

Dental Students ◽

Local Health ◽

Fee For Service ◽

Capitation Payment ◽

Payment Model ◽

Adult Age ◽

Age Cohorts

Abstract Background Capitation models of care in dentistry started around 1973 with varying degrees of success in meeting the needs of the individuals and expectations of the participating private practitioners. These studies mostly identified that capitation payments resulted in under treatment whilst fee-for-service models often led to over treatment. The objective of this study was to develop a new way of doing business using an outsourcing capitation model of care to meet population health needs and activity-based funding requirements of rural Local Health Districts with a local university dental school. This payment model is an alternate referral pathway for public oral health practitioners from the existing New South Wales Oral Health Fee-for-Service Scheme that focuses on urgent treatment to one that offers an all-inclusive preventive approach that concentrates on sustaining good long-term oral health for the individual. Method The reflective study analysed various adult age cohorts (18–24, 25–34, 35–44, 45–54, 55–64, 65–74 and 75 + years) based on 950 participants randomly selected from the Greater Southern adult public dental waiting lists. The study’s capitation formula was derived from NSW government adult treatment items (n = 447,625). Dental care was provided through the local university’s dental clinics utilising only dental students under clinical supervision. All data were sourced from NSW Oral Health Data Warehouse during 1 January 2012–30 June 2018 and analysed by using SAS 9.3 and Version 13 Microsoft Excel. Results There were 10,305 dental care items and 1129 capitation courses of care totalling A$599,026. This resulted in an average of 11 dental care items being provided to each participant. The capitation payment formula utilising the most provided dental care items of 100 individual patients proved to be economical and preventive focused. Conclusion The systematic reflection showed that this unique methodology in developing an adult capitation payment formula associated to diagnostic pathways that resulted in: (i) more efficient usage of government expenditure on public dental services, (ii) provision of person-centred courses of dental care, and (iii) utilisation of university dental education programs to best practice treatment and holistic care.

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Development of a Claim Review and Payment Model Utilizing Diagnosis Related Groups under the Korean Health Insurance

Health Services Management Research ◽

10.1177/095148489300600101 ◽

1993 ◽

Vol 6 (1) ◽

pp. 2-11 ◽

Cited By ~ 1

Author(s):

Young Soo Shin ◽

Yong Kwon Yeom ◽

Hark Hwang

Keyword(s):

Health Insurance ◽

Review Process ◽

Diagnosis Related Groups ◽

Empirical Test ◽

Case Mix ◽

Fee For Service ◽

Payment Model ◽

Proposed Model ◽

The Us ◽

Case Basis

This paper describes the development of a claim review and payment model utilizing the diagnosis related groups (DRGs) for the fee for service-based payment system of the Korean health insurance. The present review process, which examines all claims manually on a case-by-case basis, has been considered to be inefficient, costly, and time-consuming. Differences in case mix among hospitals are controlled in the proposed model using the Korean DRGs. They were developed by modifying the US-DRG system. An empirical test of the model indicated that it can enhance the efficiency as well as the credibility and objectivity of the claim review. Furthermore, it is expected that it can contribute effectively to medical cost containments and to optimal practice pattern of hospitals by establishing a useful mechanism in monitoring the performance of hospitals. However, the performance of this model needs to be upgraded by refining the Korean DRGs which play a key role in the model.

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Patient Navigation in Cancer: The Business Case to Support Clinical Needs

Journal of Oncology Practice ◽

10.1200/jop.19.00230 ◽

2019 ◽

Vol 15 (11) ◽

pp. 585-590 ◽

Cited By ~ 2

Author(s):

Ronald M. Kline ◽

Gabrielle B. Rocque ◽

Elizabeth A. Rohan ◽

Kris A. Blackley ◽

Cynthia A. Cantril ◽

...

Keyword(s):

Patient Outcomes ◽

Patient Navigation ◽

Business Case ◽

Emergency Department Visits ◽

Fee For Service ◽

Patient Centered ◽

Payment Model ◽

Financial Benefits ◽

Oncology Providers ◽

Patient Retention

PURPOSE: Patient navigation (PN) is an increasingly recognized element of high-quality, patient-centered cancer care, yet PN in many cancer programs is absent or limited, often because of concerns of extra cost without tangible financial benefits. METHODS: Five real-world examples of PN programs are used to demonstrate that in the pure fee-for-service and the alternative payment model worlds of reimbursement, strong cases can be made to support the benefits of PN. RESULTS: In three large programs, PN resulted in increased patient retention and increased physician loyalty within the cancer programs, leading to increased revenue. In addition, in two programs, PN was associated with a reduction in unnecessary resource utilization, such as emergency department visits and hospitalizations. PN also reduces burdens on oncology providers, potentially reducing burnout, errors, and costly staff turnover. CONCLUSION: PN has resulted in improved patient outcomes and patient satisfaction and has important financial benefits for cancer programs in the fee-for-service and the alternative payment model worlds, lending support for more robust staffing of PN programs.

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Design Challenges of an Episode-Based Payment Model in Oncology: The Centers for Medicare & Medicaid Services Oncology Care Model

Journal of Oncology Practice ◽

10.1200/jop.2016.015834 ◽

2017 ◽

Vol 13 (7) ◽

pp. e632-e645 ◽

Cited By ~ 31

Author(s):

Ronald M. Kline ◽

L. Daniel Muldoon ◽

Heidi K. Schumacher ◽

Larisa M. Strawbridge ◽

Andrew W. York ◽

...

Keyword(s):

Quality Measurement ◽

New Drugs ◽

Standards Of Care ◽

Fee For Service ◽

Medicare Beneficiaries ◽

Coordinated Care ◽

Care Model ◽

Payment Model ◽

Oncology Care ◽

Payment Models

The Centers for Medicare & Medicaid Services developed the Oncology Care Model as an episode-based payment model to encourage participating practitioners to provide higher-quality, better-coordinated care at a lower cost to the nearly three-quarter million fee-for-service Medicare beneficiaries with cancer who receive chemotherapy each year. Episode payment models can be complex. They combine into a single benchmark price all payments for services during an episode of illness, many of which may be delivered at different times by different providers in different locations. Policy and technical decisions include the definition of the episode, including its initiation, duration, and included services; the identification of beneficiaries included in the model; and beneficiary attribution to practitioners with overall responsibility for managing their care. In addition, the calculation and risk adjustment of benchmark episode prices for the bundle of services must reflect geographic cost variations and diverse patient populations, including varying disease subtypes, medical comorbidities, changes in standards of care over time, the adoption of expensive new drugs (especially in oncology), as well as diverse practice patterns. Other steps include timely monitoring and intervention as needed to avoid shifting the attribution of beneficiaries on the basis of their expected episode expenditures as well as to ensure the provision of necessary medical services and the development of a meaningful link to quality measurement and improvement through the episode-based payment methodology. The complex and diverse nature of oncology business relationships and the specific rules and requirements of Medicare payment systems for different types of providers intensify these issues. The Centers for Medicare & Medicaid Services believes that by sharing its approach to addressing these decisions and challenges, it may facilitate greater understanding of the model within the oncology community and provide insight to others considering the development of episode-based payment models in the commercial or government sectors.

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The Perception and Impact of Relative Value Units (RVUs) and Quality-of-Care Compensation in Neurosurgery: A Literature Review

Healthcare ◽

10.3390/healthcare8040526 ◽

2020 ◽

Vol 8 (4) ◽

pp. 526

Author(s):

Praveen Satarasinghe ◽

Darsh Shah ◽

Michael T. Koltz

Keyword(s):

Quality Of Care ◽

Literature Review ◽

English Language ◽

Healthcare Delivery ◽

Quality Metrics ◽

Fee For Service ◽

Payment Model ◽

Relative Value ◽

Language Literature

The debate surrounding the integration of value in healthcare delivery and reimbursement reform has centered around integrating quality metrics into the current fee-for-service relative value units (RVU) payment model. Although a great amount of literature has been published on the creation and utilization of the RVU, there remains a dearth of information on how clinicians from various specialties view RVU and the quality-of-care metric in the compensation formula. The aim of this review is to analyze and consolidate existing theories on the RVU payment model in neurosurgery. Google and PubMed were searched for English-language literature describing opinions on the RVU in neurosurgery. Commentary was noted to be primary opinions if it was mentioned at least twice in the eight articles included in this review. Overall, seven primary opinions on the RVU were identified across the analyzed articles. Integration of quality into the RVU is viewed favorably by neurosurgeons with a few caveats and opportunities for further improvement.

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Treatment Choices in Managing Bethesda III and IV Thyroid Nodules: A Canadian Multi-institutional Study

OTO Open ◽

10.1177/2473974x211015937 ◽

2021 ◽

Vol 5 (2) ◽

pp. 2473974X2110159

Author(s):

Victoria Kuta ◽

David Forner ◽

Jason Azzi ◽

Dennis Curry ◽

Christopher W. Noel ◽

...

Keyword(s):

Decision Making ◽

Thyroid Nodules ◽

Management Decision ◽

Molecular Testing ◽

Fee For Service ◽

Hospital Type ◽

Patient Centered ◽

Cross Sectional ◽

Payment Model ◽

Nodule Size

Objective Patient-centered decision making is increasingly identified as a desirable component of medical care. To manage indeterminate thyroid nodules, patients are offered the options of surveillance, diagnostic hemithyroidectomy, or molecular testing. Our objective was to identify factors associated with decision making in this population. Study Design This is a retrospective cross-sectional study of patients with Bethesda III and IV thyroid nodules. Setting Multi-institutional. Methods Factors of interest included age, sex, socioeconomic status (SES), nodule size, institution, attending surgeon, surgeon payment model, and hospital type. Our outcome of interest was the initial management decision made by patients. Results A total of 956 patients were included. The majority of patients had Bethesda III nodules (n = 738, 77%). A total of 538 (56%) patients chose surgery, 413 (43%) chose surveillance, and 5 (1%) chose molecular testing. There was a significant variation in management decision based on attending surgeon (proportion of patients choosing surgery: 15%-83%; P≤.0001). Fee-for-service surgeon payment models (odds ratio [OR], 1.657; 95% CI, 1.263-2.175; P < .001) and community hospital settings (OR, 1.529; 95% CI, 1.145-2.042; P < .001) were associated with the decision for surgery. Larger nodule size, younger patients, and Bethesda IV nodules were also associated with surgery. Conclusion While it seems appropriate that larger nodules, younger age, and higher Bethesda class were associated with decision for surgery, we also identified attending surgeon, surgeon payment model, and hospital type as important factors. Given this, standardizing management discussions may improve patient-centered shared decision making.

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