Public and Private Payments to Providers Flashcards
(33 cards)
Under FFS, what are the physician and patient incentives?
- Increase utilization
- Patients get more services
- Providers make more
Explain supplier-induced demand
- FFS
- Physicians influence on patients demand
- amount of demand that exists beyond a market in which patients are fully informed
- Patients often uninformed about if they really need a treatment
Describe a PPO and cost sharing
Managed care modification to FFS
- low cost sharing in network
- high cost sharing out of network
Provider and patient perspective on PPO
Provider perspective:
physicians participate/ accept lower fees in network because PPO guarantees volume (revenue)
Patient Perspective:
Limited provider network= pay a lower premium
This could attract healthier people
Describe a HDHP
a PPO plan with higher deductible, may qualify for health savings account
Describe an HMO
compare to PPO
how unique
the 2 staff models
how are they paid?
type of managed care plan that is more restrictive (small networks and use gatekeepers) than PPO because physicians pay = capitated
IPA: Independent Practice Association not employed by HMO but negotiate PBPM
Staff Model: employ physicians
Majority of physicians have some form of a managed care contract (usually a mix)
Gatekeepers: Reduce utilization
Describe point of service (POS)
How is it different from a HMO?
type of managed care plan that is less restrictive HMO and slightly more generous (allow out-of-network and higher cost sharing)
Rank plans from least restrictive to most restrictive
HDHP, HMO, FFS, POS, PPO
Rank plans from least restrictive to most restrictive
- FFS
- PPO
- HDHP
- POS
- HMO
Provider incentives under capitation? Any disadvantages?
what setting is capitation used frequently?
Provider incentives:
-
Reduce patient utilization relative to FFS
- Increases in services provided comes out of provider’s bottom line
- Rewards prevention (keeping patient healthy)
- Disadv: may underutilize care
Capitation used more often for large group practices, primary care
FFS vs Capitation incentives
FFS
- Incentive to encourage more services
- Physician loses if they keep their patient healthy
Capitation
- Incentive to skimp on care (reduce utilization)
- reward physician for emphasizing prevention healthcare
Medicare Payments to Hospitals historically? Problem?
Medicare Payments to Hospitals historically? Problem?
- Cost-based retrospective payment for inpatient services
- Problem:
- Hospitals had an incentive to increase patient utilization because they would be reimbursed for all cost incurred
- Similar to incentives under FFS
Medicare payment system to hospital now?
Medicare payment system to hospital now?
Inpatient Prospective Payment System (IPPS)/DRGs: system put in place since 1984 where there is fixed price per hospital admission with payment varying based on diagnosis (DRG)
Incentives for hospitals under IPPS/DRGs: Quick and sicker
Incentives for hospitals under IPPS/DRGs: Quick and sicker
“Quicker and sicker”
Quicker refers to the incentive to get a patient out quicker, with a shorter length of stay to cut costs
Sicker refers to the incentive to classify a patient as relatively sicker (higher DRG weight), with the CCs or MCCs to, in turn, get a higher payment
What happened when hospital payments were switched from Cost-based retrospective payment to Inpatient Prospective Payment System (IPPS)/DRGs?
What happened when hospital payments were switched from Cost-based retrospective payment to Inpatient Prospective Payment System (IPPS)/DRGs?
- fixed payment per admission reverses incentives towards providing extra inefficient care during admission (compared to cost-based retrospective reimbursement)
- Same argument w/ incentives of FFS vs Capitation
Inpatient Prospective Payment System (IPPS)/DRGs impact on LOS? Problem with the system?
Inpatient Prospective Payment System (IPPS)/DRGs impact on LOS? Problem with the system?
-
Impact:
- Evidence shows reduction in LOS per admission (not the overall #) cost did not lead to worse outcomes
-
Problem with IPPS/DRGs
- Hospitals still have no incentive to reduce the number of admissions
- More admissions= More revenue
Calculation of IPPS/DRG: payment =
market basket updates? (base rate)
ACA adjustments goal?
Calculation of IPPS/DRG: payment = base rate X DRG weight X Adjustments
- Base rate increases = “market basket” updates
- Accounts for increases of input prices
- ACA made downward productivity adjustments
- Goal: to reduce spending i.e. lowering growth rate
- specified smaller increases to the base rate by essentially assuming that the hospitals can be more productive in their use of these inputs
Calculation of IPPS/DRG: payment adjustment
_ variation
Indirect _ _ (IME)
_ Share
Hospital _ Reductions Program (downward adjustment aka penalty)
Hospital _ Purchasing Program
Calculation of IPPS/DRG: payment adjustment
Geographic variation
Indirect Medical Education (IME) for costs of resident training
Disproportionate Share (DSH) for Medicaid/uninsured patients
Incentivize low readmission rates aka Hospital Readmissions Reductions Program (downward adjustment aka penalty)
Incentivize better quality (Hospital Value-Based Purchasing Program)
What is Medicare’s payment system to physicians?
Describe it.
what is bill balancing?
Medicare Payments to Provider/Physician’s - RBRVS (Resource-Based Relative Value Scale)
Overview: CMS administers a fee schedule and physicians can choose to participate in assigned fee or choose patient-by-patient
Bill balancing: charging more than what medicare pays
Medicare’s old payment system to doctors? What are the 2 problems?
Medicare’s old payment system to doctors? What are the 2 problems?
UCR system: use usual, customary, and reasonable
How UCR was determined
- Medicare program would determine what the average fees were for physician services in a geographic market and set UCR at that average
Problem 1: local private-market based UCR fees were inequitable for primary care v. specialty physicians
Problem 2: physicians were balance billing w/ no limits on fees
RBRVS (Resource-Based Relative Value Scale) fee schedule primary and secondary goals
RBRVS (Resource-Based Relative Value Scale) fee schedule primary and secondary goals
Primary goal: Use Relative Value Units to determine the “True cost” of a physician’s service
Secondary goal: reduce balance billing via 109.25% limiting charge
RBRVS calculation: Three main resource components? What does the VBM do? CF?
RBRVS calculation: Three main resource components?
- Work
- practice expense
- Malpractice (insurance)
What does the VBM do?
Value-Based Modified: adjustments based on composite score on quality and cost
CF?
Conversion Factor: convert RVUs to $
What did the BBA (before RBRVS) do to Medicare’s payments to doctors?
Goal?
Problem?
Solution?
What did the BBA do to Medicare’s payments to doctors?
- implemented SGR for RBRVS conversion factor
Goal?
- Create annual updates that would be “sustainable” off into the future.
- if actual spending exceeded the target for spending, then the fee schedules’ annual conversion factor update would be lowered a bit to get back onto the target
Problem?
-
Negative updates (payment cuts)
- Higher growth in volume= exceeding target spending
- Slowed growth in GDP
Solution?
- Doc fixes
- legislation to put off the SGR’s formulaic reduction
Medicare 4 Payment Reforms?
_ payments
ACOs and Medicare _ _ program
Medicare _ and _ reauthorization act (MACRA)
Comprehensive _ _ + (CPC+) Medical Home:
Medicare 4 Payment Reforms?
Bundled payments
ACOs and Medicare shared savings program
Medicare access and CHIP reauthorization act (MACRA)
Comprehensive Primary Care + (CPC+) Medical Home:
