The Cycle of Reimbursement Models
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Transcript of The Cycle of Reimbursement Models
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The Cycle of Reimbursement ModelsAdele AllisonNational Director of Government Affairs, SuccessEHS
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Brief History of Reimbursement Models
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1917
Lumberjacks of the NorthwestFull Risk, Community-Based
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The BluesThird-party Fee-for-Service (FFS), Community-based
1929-39
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Commercial FFSEmployer-sponsored Health Coverage
1940-60s
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1965
Government FFSMedicare & Medicaid
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Physician Fee SchedulesAnd Diagnosis Related Groups
1974-89
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Partial to Full RiskCapitation, Health Maintenance Organizations (HMO), Preferred Provider Organizations (PPO)
1985-90s
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Costs Outpacing InflationBoomers, Increased Patient Portion, Leading to Accountable Care Organizations (ACO)
2000s
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2012
ACOs to be ImplementedA Return to Community-Based Care
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Reimbursement Strategies
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GovernmentStrategies
1
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Legislation & PolicyMove from Pay-for-Service to Pay-for-Value
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1997 - BBASustainable Growth Rate (SGR) Formula
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2006 - TRHCAPhysician Quality Reporting Initiative (PQRI) – Defined Value
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2009 - ARRAEHR Adoption, Clinical Data Reporting and Evidence-based Care
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2010 - PPACAValue-based Modifiers, Episode Groupers, Bundled Payments
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ISSUEMedicare Sustainable Growth Rate Formula = 27.4% Adjustment
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CommercialPayer
Strategies
2
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Reimbursement ModelsCapitation, Withholds, FFS, Bundling
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ISSUEMedicare Sustainable Growth Rate Formula = 27.4% Adjustment
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ProviderStrategies
3
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Defense Strategies, Large Group Practice, Employment, Concierge Practice
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Example: Full Risk, or Capitation / Provider Risk
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 Patients 500 Patients
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsMedian Age 27
500 PatientsMedian Age 58
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsMedian Age 27
100 have Chronic Disease
500 PatientsMedian Age 58
350 have Chronic Disease
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsMedian Age 27
100 have Chronic Disease
$10 PMPM
500 PatientsMedian Age 58
350 have Chronic Disease
$10 PMPM
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
1,000 PatientsX
$10 PMPM=
$10,000 / Month
500 PatientsX
$10 PMPM=
$5,000 / Month
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
20 Patients / Month
X $75 Average Collection per Visit
$1,500 / Month
FFS Cost = Good
100 Patients / MonthX $75 Average
Collection per Visit$7,500 / Month
FFS Cost = Bad
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ABC Health Plan Enrollees
Dr. Red Dr. Blue
ADVERSE SELECTION
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Example: Fee-for-Service, or Health Plan / Employer Risk
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Episodic Care(interventions aimed at patient cure or
restoration to previous level of functioning)
Vs.Over-Utilization
(Excessive or unnecessary utilization of health services by patients or physicians)
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Episodic Care
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Episodic Care
Disjointed care continuum
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Episodic Care
Disjointed care continuumLimited prevention
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Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease management
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Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
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Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Conflicting care plans
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Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Conflicting care plansTreatment duplication
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Episodic Care
Disjointed care continuumLimited prevention
Inadequate chronic disease managementUnengaged patient
Conflicting care plansTreatment duplicationPoor quality and safety
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Over Utilization
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Over Utilization
Provider paid fee for every service
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Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
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Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
No accountability
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Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
No accountabilityNo incentive to manage chronic disease
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Over Utilization
Provider paid fee for every serviceIncents unnecessary treatments
No accountabilityNo incentive to manage chronic disease
“Take what I can get” mentality
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Over Utilization
Episodic Care
INCREASED RISK
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