Fee-for-service payment is not the (main) problem.
Ontology highlight
ABSTRACT: Objective
To understand the effect of physician payment incentives on the allocation of health care resources.Data sources/study setting
Review and analysis of the literature on physician payment incentives.Study design
Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency.Principal findings
Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices that are close to the provider's marginal cost - by giving consumers information on provider-specific prices and a strong incentive to choose lower cost providers. However, efficient pricing of services ultimately will need to be supplemented by incentives for efficient production of health and functional status.Conclusions
The problem with current FFS payment is not paying a fee for each service, per se, but the way in which the fees are determined.
SUBMITTER: Dowd BE
PROVIDER: S-EPMC7375993 | biostudies-literature | 2020 Aug
REPOSITORIES: biostudies-literature
Publications
Fee-for-service payment is not the (main) problem.
Dowd Bryan E BE Laugesen Miriam J MJ
Health services research 20200801 4
<h4>Objective</h4>To understand the effect of physician payment incentives on the allocation of health care resources.<h4>Data sources/study setting</h4>Review and analysis of the literature on physician payment incentives.<h4>Study design</h4>Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency.<h4>Principal findings</h4>Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices th ...[more]
Similar Datasets
Project description:BackgroundHealthcare reforms in many countries have shown a movement from pure payment systems to mixed payment systems. However, there remains an insufficient understanding of how to design better mixed payment systems and how such systems, especially Diagnosis-Related-Group (DRG)-based systems, benefit patients. We therefore designed a controlled laboratory experiment to investigate the effects of fee-for-service (FFS), DRG, and mixed payment systems on physicians' service provision.MethodsA total of 210 medical students were recruited from Capital Medical University as subjects. They, in the role of physicians, were randomly divided into seven groups and chose the quantity of medical services for different patient types under pure FFS, pure DRG, or mixed payment schemes that included two FFS-based mixed payment schemes and three DRG-based mixed payment schemes. There were five rounds of each group of experiments, and each subject made 18 decisions per round. The quantity of medical services provided by subjects were collected. And relevant statistics were computed and analyzed by nonparametric tests and random effects model.ResultsThe results showed that the physicians' overprovision (underprovision) of services under FFS (DRG) schemes decreased under mixed payment schemes, resulting in higher benefit to patients under mixed payment schemes. Patients' health conditions also affected physicians' behavior but in different directions. Higher disease severity was associated with higher deviation of physicians' quantity choices from the optimal quantity under DRG and DRG-based mixed payment schemes, while the opposite was found for FFS and FFS-based mixed payment schemes.ConclusionsMixed payment systems are a better way to balance physicians' profit and patients' benefit. The design of mixed payment systems should be adjusted according to the patient's health conditions. When patients are in lower disease severity and resource consumption is relatively small, prospective payments or mixed systems based on prospective payments are more suitable. While for patients in higher disease severity, retrospective payments or mixed systems based predominantly on retrospective payments are better.
| S-EPMC9258053 | biostudies-literature
Project description:ImportanceModifier 22 is a mechanism designed for surgeons to identify cases that are more complex than their Current Procedural Terminology code accounts for. However, empirical studies of the use and efficacy of modifier 22 are lacking.ObjectiveTo assess the use of modifier 22 in common surgical procedures and the association of use with compensation.Design, setting, and participantsThis was a cross-sectional analysis of the 2021 Physician/Supplier Procedure Summary Limited Data Set including all Part B carrier and durable medical equipment fee-for-service claims. Claims for 10 common surgical procedures were evaluated, including mastectomy, total hip arthroplasty, total knee arthroplasty, coronary artery bypass grafting, laparoscopic right colectomy, laparoscopic appendectomy, laparoscopic cholecystectomy, kidney transplant, laparoscopic total abdominal hysterectomy and bilateral salpingo-oophorectomy, and lumbar laminectomy. Data were analyzed from August to November 2023.Main outcomes and measuresRate of modifier 22 use, rate of claim denial, mean charges, mean payment for accepted claims, and mean payment for all claims.ResultsThe sample included 625 316 surgical procedures performed in calendar year 2021. The proportion of modifier 22 coding for a procedure ranged from 5725 of 251 521 (2.3%) in total knee arthroplasty to 1566 of 18 459 (8.5%) in laparoscopic total abdominal hysterectomy and bilateral salpingo-oophorectomy. Submitted charges were 11.1% (95% CI, 9.1-13.2) to 22.8% (95% CI, 21.3-24.3) higher for claims with modifier 22, depending on the procedure. Among accepted claims, those with modifier 22 had increased payments ranging from 0.8% (95% CI, 0.7-1.0) to 4.8% (95% CI, 4.5-5.1). However, claims with modifier 22 were more likely to be denied (7.4% vs 4.0%; P < .001). As a result, overall mean payments were mixed, with 4 procedures having lower payments when modifier 22 was appended, 4 procedures having higher payments with modifier 22, and 2 procedures with no difference. The largest increase in mean payment for modifier 22 claims was for kidney transplant with an increased payment of $71.46 (95% CI, 55.32-87.60), which translates to a relative increase of 3.4% (95% CI, 2.9-4.6).Conclusions and relevanceThe findings in this study suggest that modifier 22 had little to no financial benefit when appended to claims for a diverse panel of surgical procedures. In the current system, surgeons have little reason to request modifier 22, and no mechanisms currently exist for surgeons to recoup payment for difficult operations.
| S-EPMC10955341 | biostudies-literature
Project description:ImportancePrescription drug spending is a topic of increased interest to the public and policymakers. However, prior assessments have been limited by focusing on retail spending (Part D-covered drugs), omitting clinician-administered (Part B-covered) drug spending, or focusing on all fee-for-service Medicare beneficiaries, regardless of their enrollment into prescription drug coverage.ObjectiveTo estimate the proportion of health care spending contributed by prescription drugs and to assess spending for retail and clinician-administered prescriptions.Design, setting, and participantsDescriptive, serial, cross-sectional analysis of a 20% random sample of fee-for-service Medicare beneficiaries in the United States from 2008 to 2019 who were continuously enrolled in Parts A (hospital), B (medical), and D (prescription drug) benefits, and not in Medicare Advantage.ExposureCalendar year.Main outcomes and measuresNet spending on retail (Part D-covered) and clinician-administered (Part B-covered) prescription drugs; prescription drug spending (spending on Part B-covered and Part D-covered drugs) as a percentage of total per-capita health care spending. Measures were adjusted for inflation and for postsale rebates (for Part D-covered drugs).ResultsThere were 3 201 284 beneficiaries enrolled in Parts A, B, and D in 2008 and 4 502 718 in 2019. In 2019, beneficiaries had a mean (SD) age of 71.7 (12.0) years, documented sex was female for 57.7%, and 69.5% had no low-income subsidies. Total per-capita spending was $16 345 in 2008 and $20 117 in 2019. Comparing 2008 with 2019, per-capita Part A spending was $7106 (95% CI, $7084-$7128) vs $7120 (95% CI, $7098-$7141), Part B drug spending was $720 (95% CI, $713-$728) vs $1641 (95% CI, $1629-$1653), Part B nondrug spending was $5113 (95% CI, $5105-$5122) vs $6702 (95% CI, $6692-$6712), and Part D net spending was $3122 (95% CI, $3117-$3127) vs $3477 (95% CI, $3466-$3489). The proportion of total annual spending attributed to prescription drugs increased from 24.0% in 2008 to 27.2% in 2019, net of estimated rebates and discounts.Conclusions and relevanceIn 2019, spending on prescription drugs represented approximately 27% of total spending among fee-for-service Medicare beneficiaries enrolled in Part D, even after accounting for postsale rebates.
| S-EPMC9579917 | biostudies-literature
Project description:IntroductionDementia is among the costliest of medical conditions, but it is not known how these costs vary by dementia subtype.MethodsThe effect of dementia diagnosis subtype on direct health care costs and utilization was estimated using 2015 California Medicare fee-for-service data. Potential drivers of increased costs in Lewy body dementia (LBD), in comparison to Alzheimer's disease, were tested.Results3,001,987 Medicare beneficiaries were identified, of which 8.2% had a dementia diagnosis. Unspecified dementia was the most common diagnostic category (59.6%), followed by Alzheimer's disease (23.2%). LBD was the costliest subtype to Medicare, on average, followed by vascular dementia. The higher costs in LBD were explained in part by falls, urinary incontinence or infection, depression, anxiety, dehydration, and delirium.DiscussionDementia subtype is an important predictor of health care costs. Earlier identification and targeted treatment might mitigate the costs associated with co-occurring conditions in LBD.
| S-EPMC7183386 | biostudies-literature
Project description:ObjectiveTo determine whether Medicare managed care penetration impacted the diffusion of endoscopy services (sigmoidoscopy, colonoscopy) among the fee-for-service (FFS) Medicare population during 2001-2006.MethodsWe model utilization rates for colonoscopy or sigmoidoscopy as impacted by both market supply and demand factors. We use spatial regression to perform ecological analysis of county-area utilization rates over two time intervals (2001-2003, 2004-2006) following Medicare benefits expansion in 2001 to cover colonoscopy for persons of average risk. We examine each technology in separate cross-sectional regressions estimated over early and later periods to assess differential effects on diffusion over time. We discuss selection factors in managed care markets and how failure to control perfectly for market selection might impact our managed care spillover estimates.ResultsAreas with worse socioeconomic conditions have lower utilization rates, especially for colonoscopy. Holding constant statistically the socioeconomic factors, we find that managed care spillover effects onto FFS Medicare utilization rates are negative for colonoscopy and positive for sigmoidoscopy. The spatial lag estimates are conservative and interpreted as a lower bound on true effects. Our findings suggest that managed care presence fostered persistence of the older technology during a time when it was rapidly being replaced by the newer technology.
| S-EPMC3227000 | biostudies-literature
Project description:ObjectivesIn 2008, Florida's Medicaid program began reimbursing medical providers for preventive oral health services (POHS) delivered to children aged 6 months to 42 months. We examine whether Medicaid comprehensive managed care (CMC) and fee for service (FFS) had different rates of POHS during pediatric medical visits.Study designObservational study using claims data (2009-2012).MethodsUsing repeated cross-sections of 2009-2012 Florida Medicaid data for children 3.5 years or younger, we examined pediatric medical visits. We estimated a weighted logistic regression model to compare POHS rates among visits reimbursed by CMC and FFS Medicaid. The model controlled for FFS (vs CMC), years Florida had a policy allowing POHS in medical settings, an interaction between these 2 variables, and additional child- and county-level characteristics. Results are presented as regression-adjusted predictions.ResultsAmong 1,765,365 weighted well-child medical visits in Florida, POHS were included in 8.33% of CMC-reimbursed visits and 9.67% of FFS-reimbursed visits. Compared with FFS, CMC-reimbursed visits had a nonsignificant 1.29-percentage-point lower adjusted probability of including POHS (P = .25). When examining differences over time, although the POHS rate was 2.72 percentage points lower for CMC-reimbursed visits after 3 years of policy enactment (P = .03), rates were similar overall and increased over time.ConclusionsPOHS rates among pediatric medical visits in Florida were similar for visits paid via FFS and CMC, with low rates that increased modestly over time. Our findings are important because more children continue to be enrolled in Medicaid CMC.
| S-EPMC10100644 | biostudies-literature
Project description:BackgroundFee-for-service is a common payment model for remunerating general practitioners (GPs) in OECD countries. In Norway, GPs earn two-thirds of their income through fee-for-service, which is determined by the number of consultations and procedures they register as fees. In general, fee-for-service incentivises many and short consultations and is associated with high service provision. GPs act as gatekeepers for various treatments and interventions, such as addictive drugs, antibiotics, referrals, and sickness certification. This study aims to explore GPs' reflections on and perceptions of the fee-for-service system, with a specific focus on its potential impact on gatekeeping decisions.MethodsWe conducted six focus group interviews with 33 GPs in 2022 in Norway. We analysed the data using thematic analysis.ResultsWe identified three main themes related to GPs' reflections and perceptions of the fee-for-service system. First, the participants were aware of the profitability of different fees and described potential strategies to increase their income, such as having shorter consultations or performing routine procedures on all patients. Second, the participants acknowledged that the fees might influence GP behaviour. Two perspectives on the fees were present in the discussions: fees as incentives and fees as compensation. The participants reported that financial incentives were not directly decisive in gatekeeping decisions, but that rejecting requests required substantially more time compared to granting them. Consequently, time constraints may contribute to GPs' decisions to grant patient requests even when the requests are deemed unreasonable. Last, the participants reported challenges with remembering and interpreting fees, especially complex fees.ConclusionsGPs are aware of the profitability within the fee-for-service system, believe that fee-for-service may influence their decision-making, and face challenges with remembering and interpreting certain fees. Furthermore, the fee-for-service system can potentially affect GPs' gatekeeping decisions by incentivising shorter consultations, which may result in increased consultations with inadequate time to reject unnecessary treatments.
| S-EPMC11020312 | biostudies-literature
Project description:ImportanceClinical trials play a critical role in the development of novel cancer therapies, and precise estimates of the frequency with which older adult patients with cancer participate in clinical trials are lacking.ObjectiveTo estimate the proportion of older adult Medicare Fee-for-Service (FFS) beneficiaries with cancer who participate in interventional cancer clinical trials, using a novel population-based methodology.Design, setting, and participantsIn this retrospective cohort study evaluating clinical trial participation among older adult patients with cancer from January 1, 2014, through June 30, 2020, claims data from Medicare FFS were linked with the ClinicalTrials.gov to determine trial participation through the unique National Clinical Trial (NCT) identifier. The proportion of patients with newly diagnosed or newly recurrent cancer in 2015 participating in an interventional clinical trial and receiving active cancer treatment from January 2014 to June 2020 was estimated. Data analysis was performed from November 18, 2020, to November 1, 2021.ExposuresPatients with cancer aged 65 years or older with Medicare FFS insurance, with and without active cancer treatment.Main outcomes and measuresEnrollment in clinical trials among all patients with cancer 65 years and older and among patients receiving active cancer treatments as defined by the presence of at least 1 NCT identifier corresponding to an interventional cancer clinical trial in Medicare claims.ResultsAmong 1 150 978 patients (mean [SD] age, 75.7 [8.4] years; 49.9% men and 50.1% women) with newly diagnosed or newly recurrent cancer in 2015, 12 028 (1.0%) patients had a billing claim with an NCT identifier indicating enrollment in an interventional cancer clinical trial between January 2014 and June 2020. In a subset of 429 343 patients with active cancer treatment, 8360 (1.9%) were enrolled in 1 or more interventional trials. Patients enrolled in a trial tended to be younger, male, a race other than Black, and residing in zip codes with high median incomes.Conclusions and relevanceFindings of this cohort study show that clinical trial enrollment among older adult patients with cancer remains low, with only 1.0% to 1.9% of patients with newly diagnosed or recurrent cancer in 2015 participating in an interventional cancer clinical trial as measured by the presence of NCT identifiers in Medicare claims. These data provide a contemporary estimate of trial enrollment, persistent disparities in trial participation, and only limited progress in trial access over the past 2 decades.
| S-EPMC9614676 | biostudies-literature
Project description:Background and objectivesReimbursement for colonic pathology by the Centers for Medicare and Medicaid Services (CMS) are grouped in the Medicare Severity-Diagnosis Related Groups (MS-DRG). With limited available data, we sought to compare the relative impact of malignant vs benign colonic pathology on reimbursement under the MS-DRG system.MethodsWe used 5% national Medicare data from 2011 to 2014. Patients were classified as having benign disease or malignancy. Descriptive statistics and multivariate regression analysis were used to evaluate the surgical approach and health resource utilization.ResultsOf 10 928 patients, most were Non-Hispanic White women. The majority underwent open colectomy in both cohorts (P < .001). Colectomy for benign disease was associated with higher total charges (P < .001) and a longer length of stay (P = .0002). Despite higher charges, payments were not significantly different between the cohorts (P = .434). Both inpatient mortality and discharge to a rehab facility were higher in the oncologic group (P < .001).ConclusionPayment methodology for colectomy under the CMS MS-DRG system does not appear to accurately reflect the episode cost of care. The data suggest that inpatient costs are not fully compensated. A transition to value-based payments with expanded episode duration will require a better understanding of unique costs before adoption.
| S-EPMC6635007 | biostudies-literature
Project description:ImportanceAlthough enrollment in both hospice care and Medicare Advantage (MA) have grown substantially, little is known about the quality of hospice care received by MA beneficiaries relative to traditional Medicare fee-for-service (FFS) beneficiaries.ObjectiveTo compare hospice enrollment and the quality of hospices serving MA and FFS beneficiaries.Design, setting, and participantsThis population-based cross-sectional study used Medicare enrollment and claims data from January 1, 2018, through December 31, 2019, and Hospice Quality Reporting Program (HQRP) data released between November 1, 2020, and August 30, 2022, to compare the probability of enrolling in hospice before death and the probability of using high- vs low-quality hospices between MA and FFS beneficiaries. Two sample populations were assessed: (1) all Medicare beneficiaries who died in 2018 or 2019, and (2) all Medicare hospice enrollees in 2018 and 2019, excluding beneficiaries with hospice use in 2017. Data were analyzed between April 1, 2023, and April 30, 2024.ExposuresMA enrollment was assessed 6 months prior to death for decedents and in the month of hospice admission for hospice enrollees. MA beneficiaries were further classified by plan type: regular MA, special needs plan (SNP), and Medicare-Medicaid plan (MMP).Main outcomes and measuresFor decedents, the outcome of interest was the prevalence of any hospice use in the last 6 months of life. For hospice enrollees, the outcome of interest was 9 HQRP measures of hospice quality.ResultsData from 4 215 648 decedents (51.6% female; mean [SD] age, 80.1 [11.6] years) and 2 211 826 hospice enrollees (56.6% female; mean [SD] age, 82.4 [10.5] years) were included. In the decedent sample, beneficiaries enrolled in every type of MA plan were significantly more likely than beneficiaries enrolled in FFS to use hospice care in the last 6 months of life (regular MA beneficiaries were 3.4 percentage points more likely to use hospice; MA SNP beneficiaries, 2.4 percentage points; and MA MMP beneficiaries, 3.6 percentage points). Regular MA and FFS beneficiaries enrolled in hospices of similar quality. However, beneficiaries in SNPs and MMPs were significantly more likely than FFS beneficiaries to use hospices with inferior quality (eg, MA SNP beneficiaries were 4.3 [95% CI, 3.9-4.7] percentage points more likely to use a hospice with a low Consumer Assessment of Healthcare Providers and Systems (CAHPS) global rating, and MA MMP beneficiaries were 6.8 [95% CI, 6.0-7.7] percentage points more likely). When beneficiaries entered hospice from the same hospital or nursing home the results were attenuated: the MA SNP beneficiaries entering from the same hospital were 0.9 (95% CI, 0.5-1.4) percentage points more likely to use a hospice with a low CAHPS global rating, and MA MMP beneficiaries were 3.8 (95% CI, 2.4-5.1) percentage points more likely; MA SNP beneficiaries entering from the same nursing home were 2.8 (95% CI, 2.3-3.3) percentage points more likely to use a hospice with a low CAHPS global rating, and MA MMP beneficiaries were 1.9 (95% CI, 0.9-2.9) percentage points more likely. These results suggest that referral networks were an important mechanism of the hospice quality choice.Conclusions and relevanceThese findings suggest that policymakers should consider policies for MA programs that incentivize referrals to high-quality hospices and approaches to educating beneficiaries on identifying high-quality hospice care.
| S-EPMC11650393 | biostudies-literature