Question

Physician Reimbursement Directions With the increasing cost of health care, MCOs have been under tremendous pressure...

Physician Reimbursement Directions With the increasing cost of health care, MCOs have been under tremendous pressure to control health care costs, including physician reimbursement. In this assignment, you are to look at some of the issues that are involved in physician reimbursement. Your assignment is to write a 2 to 3 page paper that addresses the following: • What are the different methods that MCOs reimburse providers for health care services? • How does reimbursement for these services vary based on the type of MCO models (Group, Staff, IPA, PPO…) • In which situations would member/patients pay the MCO directly? • How do you think reimbursement impacts how care is delivered to the patient? • Is this good or bad? Provide examples, • Cite your resources.

Homework Answers

Answer #1

Introduction:

Tremendous increase in health care services have been observed in recent times. Heath care has become so costly that it has gone out of capacity of a common man. This is one of the biggest concern for service providers.

Managed Care Organizations (MCOs) are under tremendous pressure to control health care costs.

Physician Reimbursement:

It has been identified by many scholars and researchers that physician reimbursement absorbs a big portion of heath care cost in the U.S. Managed care has their own rules and regulations for reimbursement.

Different methods that MCOs uses to reimburse providers for health care services:

Health plans have four plans for paying physicians these include:

  • Fee-for-service: According to this plan physician is reimbursed based on service or test they have provided to patient as per the charges of the local area.
  • Discounted fee-for-service: According to this plan physician is reimbursed based on service or test they have provided to patient after deducting pre -determined discounts aplicable in local area.
  • Capitation: According to this plan physician is reimbursed based on fixed amount per enrollee rather than service or test or on monthly basis.
  • Salary: According to this plan physician is reimbursed by paying monthly or weekly fixed amount rather than service or enrollee basis.

Apart from above three payment adjustments are also concerned with physicians reimbursement, these are as follows:

  • Withholds,
  • Bonuses, and
  • Retrospective utilization targets

Reimbursement for services vary based on the type of MCO models:

There are several models of health maintenance organizations, some of the common models are as follows:

  • Group model: Under this model contracts are made between groups of physicians and MCO’s . Under this contract a set fee is decided for physician for providing patients with different health services in central location.

  • Individual practice association (IPA): Under this model contract is made between MCO and private practice physician to provide services and negotiated fees is paid for it.

  • Network model: Under this model contract is made between variety of group of physicians and other physicians that fall under network of care within referral patterns.

  • Staff model: under this model physicians work under salaried arrangements and provide exclusive care for enrollee.
  • Preferred provider organization (PPO): Under this model contract is made between medical care providers and MCO. Covered persons are provided wit benefits for nonparticipating services providers.

The situations in which member/patients pay directly to MCO:

  • The patient or the member are self pay patients,
  • Patients whose benefits are either deductibles, or out-of-pocket limits,
  • Patients with co-payments,
  • Payment for non-covered services.

In my opinion the reimbursement impacts the way care is delivered to the patient in following manner:

  • The payment methods are designed to affect treatment patterns.
  • Reimbursement impacts the process, cost, and outcomes of care for plan enrollee,
  • Incentives provided by managed care impacts the treatment patterns.
  • Behaviour of providers while treating patients is also impacted by the manner of reimbursement.

I believe that such a influence of reimbursement an heath care is not a good. Although it is helpful for one who can afford it to gain advantage from this pattern. But for those who cannot afford managed care organizations, it becomes tough.

References:

  • McMenamin, Peter. Future Research and Policy Directions in Physician Reimbursement. Health Care Finance Rev. 1981 Spring; 2(4): 61–75.
  • Bundorf, MK; et. Al. Impact of Managed Care on the Treatment, Costs, and Outcomes of Fee-for-Service Medicare Patients with Acute Myocardial Infarction. Health Serv Res. 2004 Feb; 39(1): 131–152. doi: 10.1111/j.1475-6773.2004.00219.x.

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