Physicians often have different methods of reimbursment in one day
Units of Payment
Dfenitions of Methods of Payment
Fee-for0Service Reimbursement
only non agragated form
Reimbursement by Episode of Illness
Per Diem Payments to Hospitals
Capitation Payment
Payment for All Services Delivered to All Paitens Within a Certian Time Period
Managed Care Plans
Fee-for-Service Reimbursement with Utilization Review
insureres have the righ to authorize or deny payments
PPOs (Prefered Provider Organizations)
HMOs (Health Mantenince Organizations)
Integrate the insureres and the providers
Independent Practice Association (IPA)--loose network of private physicians and hospitals
group or staff model--one organization wtith both
Methods of Phhysican Payment
Payment Per Procedure: Fee-for-Service
Medicare moved to a Resource-Based Relative-Value Scale (RBRVS) to attempt to pay physicians fairly (as little as possilbe) for different services
Payment Per Episode of Illness
by bundleing the services for one incident together, more of the risk (10 visists versus 2 for the same pay) is transfered to the physician as well as an incentivve to use fewer resources
Payment Per Patient: Cpaitation with Two-Tiered Structures
British System
simple two tier system (insurer and physicians)
United States System
20% of US HMOs are two tier
many put the referral burden onto the physicians by making it come out of their own capitaion income
Comparison of Risk Between the Two Systems
two tier system--not much risk to the phsysician, but not much oportunity either
usually a dollar limit on individual patient risks
Payment Per patinet: Cpaitation with Three Tiered Structures
IPA works out of a pool of capitated money for lab and referal services reducing the overall risk and giving an incentive to use fewer medical services
large administrative overhead
Payment Per Time: Salary
Little financial risk for the physicians--although they may have to work more and won’t get paid more
Methods of Hospital Payment
Payment Per procedure: Fee-for-Service
no longer as popular
Payment Per Day: Per Diem
hospital at risk for the number of tests performed
insurer still at risk for the number of days spent
insurer wants to review the number of days
Payment Per Episode of Hospitalization: Diagnosis-Related Groups
DGR started in 1983
acute incentive to hospitals to be as effecient and quick as possible
insurere wants to review the admissions criteria
Payment per patient: Capitation
all the risk on the hospitals
Payment Per Institution: Global Budget
hospitals owned by the insurer
Risk Revisited
phsyicians want the healtier patients--need some sort of risk adjustment
Conclusion
shift to bundled payments to put the financial risk on the physicians and hosptials where they can be controled
payment levels now negotiated or set by schedules