Under the Knife: Public, Private Insurers Cut Into Fee-For-Service Health Plan

by Mark Friedman  on Monday, Apr. 9, 2012 12:00 am  

Public and private insurers are cutting into fee-for-service business plans.

“Essentially, in the fee-for-service system, there’s nobody who is the assigned quarterback,” Thompson said. “Right now the payment system aligns financial incentives to have lots of things done for you and to you.”

Under the new system, called Arkansas Health Care Payment Improvement Initiative, patient’s care won’t be rationed, Allison said.

Instead, he said, the bill from the providers will go to Medicaid after treatment is received, just as it does now, he said.

“We’re not going to change the way that we pay for individual patients,” he said. “But now after all is said and done, the payers will go back and review how efficient that whole episode [was].”

The review will determine the average cost for the procedure, he said.

Allison said an average approach was taken to account for patients who have complications and require extra care.

If the cost of the procedures is lower than what has been determined to be acceptable, then the provider — which could be the doctor, hospital or combination of the two — will share in the savings, he said.

If the cost is higher, however, “that provider who’s responsible for the costs is going to share that extra cost with the state.”

One statistic also that will be looked at is the hospital readmissions, Thompson said. He said some patients are returning to the hospital within 30 days of being discharged because of infections they picked up at the facility or for a relapse, he said.

“What we want to do is have a hospital … have responsibility for keeping that patient from coming back into the hospital within 30 days,” Thompson said. “So when a hospital discharges [the patient] that first time, they may need to call the patient to make sure they’ve got their prescriptions filled.”

Starting in July, Medicaid will have a price set for the episodes and will start collecting data from providers. Possibly starting in September, providers will be paid under the new model, Allison said.

The delay in implementing the payment would “give clinicians the chance to understand where they are and what they might need to improve on,” Thompson said.

 

 

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