Public and Private Payments to Providers Flashcards

1
Q

Under FFS, what are the physician and patient incentives?

A
  • Increase utilization
    • Patients get more services
    • Providers make more
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Explain supplier-induced demand

A
  • 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
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Describe a PPO and cost sharing

A

Managed care modification to FFS

  • low cost sharing in network
  • high cost sharing out of network
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Provider and patient perspective on PPO

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Describe a HDHP

A

a PPO plan with higher deductible, may qualify for health savings account

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Describe an HMO

compare to PPO

how unique

the 2 staff models

how are they paid?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Describe point of service (POS)

How is it different from a HMO?

A

type of managed care plan that is less restrictive HMO and slightly more generous (allow out-of-network and higher cost sharing)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Rank plans from least restrictive to most restrictive

HDHP, HMO, FFS, POS, PPO

A

Rank plans from least restrictive to most restrictive

  1. FFS
  2. PPO
  3. HDHP
  4. POS
  5. HMO
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Provider incentives under capitation? Any disadvantages?

what setting is capitation used frequently?

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

FFS vs Capitation incentives

A

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
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Medicare Payments to Hospitals historically? Problem?

A

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
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Medicare payment system to hospital now?

A

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)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Incentives for hospitals under IPPS/DRGs: Quick and sicker

A

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

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What happened when hospital payments were switched from Cost-based retrospective payment to Inpatient Prospective Payment System (IPPS)/DRGs?

A

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
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Inpatient Prospective Payment System (IPPS)/DRGs impact on LOS? Problem with the system?

A

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
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Calculation of IPPS/DRG: payment =

market basket updates? (base rate)

ACA adjustments goal?

A

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
17
Q

Calculation of IPPS/DRG: payment adjustment

_ variation

Indirect _ _ (IME)

_ Share

Hospital _ Reductions Program (downward adjustment aka penalty)

Hospital _ Purchasing Program

A

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)

18
Q

What is Medicare’s payment system to physicians?

Describe it.

what is bill balancing?

A

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

19
Q
A
20
Q

Medicare’s old payment system to doctors? What are the 2 problems?

A

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

21
Q

RBRVS (Resource-Based Relative Value Scale) fee schedule primary and secondary goals

A

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​

22
Q

RBRVS calculation: Three main resource components? What does the VBM do? CF?

A

RBRVS calculation: Three main resource components?

  1. Work
  2. practice expense
  3. 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 $

23
Q

What did the BBA (before RBRVS) do to Medicare’s payments to doctors?

Goal?

Problem?

Solution?

A

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
24
Q

Medicare 4 Payment Reforms?

_ payments

ACOs and Medicare _ _ program

Medicare _ and _ reauthorization act (MACRA)

Comprehensive _ _ + (CPC+) Medical Home:

A

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:

25
Q

ACA: Describe Medicare’s bundled payments

Goal?

Challenge?

Incentives (2)?

A

ACA: Describe Medicare’s bundled payments

  • Bundled payments: providers receive aggregate bundled payment for longer episode of care (shared by docs and hospital)

Goal?

  • Bundled payment covers preoperative, operative, and post-operative care for 90 days and spans multiple providers (hospital and physicians together)

Challenge?

  • Requires that hospitals and physicians come together to define payment split

Incentives (2)?

  • Efficient and coordinated care to reduce readmission
  • No additional payment for readmission within 90 days
26
Q

Describe ACOs and Medicare shared savings program

A

Describe ACOs and Medicare shared savings program

  • ACO form contracts with CMS and is made up of collection of PCPs, specialists, and hospitals (all connected via EMR)
  • share savings
27
Q

The potential problem with ACOs?

solution?

A

The potential problem with ACOs?

  • ACOs try to reduce spending by skimping on care, rather than trying to fix inefficiencies

Solution?

  • ACO receives reward or penalty based on whether actual FFS spending was lower or higher than benchmark amount (prospective risk-adjusted target level of Medicare spending per beneficiary)
  • Tied to quality metrics
28
Q

ACO challenges?

  • ACO patients
  • shared savings
  • power
A

ACO challenges?

  • Patients can go outside of the ACO, but ACO responsible for the care
  • Hospitals and physicians have to cooperate to split savings
  • Antitrust/competition issues on provider consolidation
    • Bargaining power- charge higher prices for private
29
Q

Do providers lose money in ACOs?

A

No, potential to make more from additional shared savings bonus

while their revenue decreases, their costs incurred decrease even more

30
Q

What is MACRA? What did it do (2)?

A

Medicare access and CHIP reauthorization act MACRA

Repealed SGR formula for physician payments

created 2 doctor payment systems for 2019

  • Merit-Based Incentive Payment System (MIPS)
    • ​​FFS via RBRVS fee schedule w new adjustment based on quality score​
  • Alternative Payment Models (APM)
    • CMS will make capitated payments w physician’s savings based on quality
31
Q

Describe Comprehensive Primary Care + (CPC+) Medical Home

Track1?

Track 2?

A

(CPC+) Medical Home

CMS partner w/ commercial plan and state Medicare plans to allow PCPs to choose Track 1 or Track 2

Track1:

  • supplement current FFS w/ care management fees

Track2:

  • Replace FFS RBRVS payments w/ hybrid of fixed PBPM and lower FFS & higher management fees
32
Q

Describe CPC+ Medical Home payment risk adjustment

A

Risk adjustment through person-level risk scores

  • The fees in each track are an average
  • The fees range based on patient person-level risk scores
  • The sicker the patients are predicted to be, the higher the payments
  • Goal: mitigate the incentive to avoid sicker patients
33
Q

Rank payments Private, Medicaid, Medicare

cost-shifting phenomenon?

A

Private> Medicare> Medicaid

cost-shifting phenomenon: Time periods in which the public payments go down, the private payments go up, and vice versa