Time is money: general practitioners' reflections on the fee-for-service system.

BACKGROUND: Fee-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. METHODS: We conducted six focus group interviews with 33 GPs in 2022 in Norway. We analysed the data using thematic analysis. RESULTS: We 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. CONCLUSIONS: GPs 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.

Increased Medicare payments for homeless patients provide new opportunities for care.

A final rule has been issued that increases Medicare fee-for-service payment rates for individuals experiencing homelessness. This rule provides new, incentivized opportunities to better screen for and document homelessness among patients in acute inpatient settings. With greater identification of homeless patients, there may be increased needs to develop comprehensive discharge plans that involve coordination with housing providers and social service agencies to prevent the high repeated use of acute care found among many homeless patients.

Ambulatory Care Fragmentation and Total Health Care Costs.

BACKGROUND: The magnitude of the relationship between ambulatory care fragmentation and subsequent total health care costs is unclear. OBJECTIVE: To determine the association between ambulatory care fragmentation and total health care costs. RESEARCH DESIGN: Longitudinal analysis of 15 years of data (2004-2018) from the national Reasons for Geographic and Racial Differences in Stroke (REGARDS) study, linked to Medicare fee-for-service claims. SUBJECTS: A total of 13,680 Medicare beneficiaries who are 65 years and older. MEASURES: We measured ambulatory care fragmentation in each calendar year, defining high fragmentation as a reversed Bice-Boxerman Index ≥0.85 and low as <0.85. We used generalized linear models to determine the association between ambulatory care fragmentation in 1 year and total Medicare expenditures (costs) in the following year, adjusting for baseline demographic and clinical characteristics, a time-varying comorbidity index, and accounting for geographic variation in reimbursement and inflation. RESULTS: The average participant was 70.9 years old; approximately half (53%) were women. One-fourth (26%) of participants had high fragmentation in the first year of observation. Those participants had a median of 9 visits to 6 providers, with the most frequently seen provider accounting for 29% of visits. By contrast, participants with low fragmentation had a median of 8 visits to 3 providers, with the most frequently seen provider accounting for 50% of visits. High fragmentation was associated with $1085 more in total adjusted costs per person per year (95% CI $713 to $1457) than low fragmentation. CONCLUSIONS: Highly fragmented ambulatory care in 1 year is independently associated with higher total costs the following year.

The Rise and Risks of Medicare Advantage "Affinity Plans".

This Viewpoint discusses the proliferation of Medicare Advantage plans targeting specific groups of individuals and whether these plans will improve quality of care for beneficiaries.

Are disparities in mental health care for Medicaid beneficiaries lower in managed care?

BACKGROUND: There are large and persistent racial and ethnic disparities in the use of mental health care in the United States. Medicaid managed care plans have the potential to reduce racial and ethnic disparities in use of mental health care through monitoring of need and active management of use of services across the populations they cover. This study compares racial and ethnic disparities among Medicaid beneficiaries in managed care with those not in managed care. METHODS: We compared Medicaid beneficiaries enrolled health maintenance organizations (HMOs) with those in fee-for-service (FFS) using data from the 2007-2015 Medical Expenditure Panel Survey (N = 26,113). We specified two-part propensity score adjusted models to estimate differences in mental health related emergency department visits, hospital stays, prescription fills, and outpatient visits overall and by race/ethnicity. RESULTS: HMO enrollment was associated with lower odds of having a mental health prescription (OR = 0.86, 95 % CI 0.78-0.96) or outpatient visit (OR = 0.82 95 % CI 0.73-0.92). These differences were similar across racial and ethnic groups or larger among Non-Hispanic Black and Hispanic beneficiaries than among Non-Hispanic White beneficiaries. CONCLUSIONS: Medicaid managed care has not improved the inequitable allocation of mental health care across racial and ethnic groups. Explicit attention to monitoring of racial and ethnic differences in use of mental health care in Medicaid managed care is warranted. IMPLICATIONS: Improvement in racial and ethnic disparities in mental health care in Medicaid manage care is unlikely to occur without targeted accountability mechanisms, such as required reporting or other contracting requirements.

A sampling strategy for longitudinal and cross-sectional analyses using a large national claims database.

Importance: The United States (US) Medicare claims files are valuable sources of national healthcare utilization data with over 45 million beneficiaries each year. Due to their massive sizes and costs involved in obtaining the data, a method of randomly drawing a representative sample for retrospective cohort studies with multi-year follow-up is not well-documented. Objective: To present a method to construct longitudinal patient samples from Medicare claims files that are representative of Medicare populations each year. Design: Retrospective cohort and cross-sectional designs. Participants: US Medicare beneficiaries with diabetes over a 10-year period. Methods: Medicare Master Beneficiary Summary Files were used to identify eligible patients for each year in over a 10-year period. We targeted a sample of ~900,000 patients per year. The first year's sample is stratified by county and race/ethnicity (white vs. minority), and targeted at least 250 patients in each stratum with the remaining sample allocated proportional to county population size with oversampling of minorities. Patients who were alive, did not move between counties, and stayed enrolled in Medicare fee-for-service (FFS) were retained in the sample for subsequent years. Non-retained patients (those who died or were dropped from Medicare) were replaced with a sample of patients in their first year of Medicare FFS eligibility or patients who moved into a sampled county during the previous year. Results: The resulting sample contains an average of 899,266 ± 408 patients each year over the 10-year study period and closely matches population demographics and chronic conditions. For all years in the sample, the weighted average sample age and the population average age differ by <0.01 years; the proportion white is within 0.01%; and the proportion female is within 0.08%. Rates of 21 comorbidities estimated from the samples for all 10 years were within 0.12% of the population rates. Longitudinal cohorts based on samples also closely resembled the cohorts based on populations remaining after 5- and 10-year follow-up. Conclusions and relevance: This sampling strategy can be easily adapted to other projects that require random samples of Medicare beneficiaries or other national claims files for longitudinal follow-up with possible oversampling of sub-populations.

Value-Based Health Care in Perioperative Medicine: Process Maps and Costing to Determine Best Practices.

Perioperative care in the United States is largely based on current fee-for-service models. Fee-for-service models are not based on the true cost of services provided, charges do not equal costs, and reimbursement varies based on insurer. Value-based health care is defined as patient-centered outcomes over cost of providing these services. Process mapping and time-driven activity-based costing can be used to define actual cost of services provided. Outcomes after discharge can be measured, so that the overall value of care provided can be assessed and improved based on the outcomes and costs identified.

Impact of the COVID-19 Pandemic on Medical Expenditures Among Medicare Fee-for-Service Beneficiaries Aged ≥67 Years With Diabetes.

OBJECTIVE: To compare total and out-of-pocket (OOP) medical expenditures between pre-COVID-19 (March 2019 to February 2020) and COVID-19 (March 2020 to February 2022) periods among Medicare beneficiaries with diabetes. RESEARCH DESIGN AND METHODS: Data were from 100% Medicare fee-for-service claims. Diabetes was identified using ICD-10 codes. We calculated quarterly total and OOP medical expenditures at the population and per capita level in total and by service type. Per capita expenditures were calculated by dividing the population expenditure by the number of beneficiaries with diabetes in the same quarter. Changes in expenditures were calculated as the differences in the same quarters between the prepandemic and pandemic years. RESULTS: Population total expenditure fell to $33.6 billion in the 1st quarter of the pandemic from $41.7 billion in the same prepandemic quarter; it then bounced back to $36.8 billion by the 4th quarter of the 2nd pandemic year. The per capita total expenditure fell to $5,356 in the 1st quarter of the pandemic from $6,500 in the same prepandemic quarter. It then increased to $6,096 by the 4th quarter of the 2nd pandemic year, surpassing the same quarter in the prepandemic year ($5,982). Both population and per capita OOP expenditures during the pandemic period were lower than the prepandemic period. Changes in per capita expenditure between the pre-COVID-19 and COVID-19 periods by service type varied. CONCLUSIONS: COVID-19 had a significant impact on both total and per capita medical expenditures among Medicare beneficiaries with diabetes. The COVID-19 pandemic was associated with lower OOP expenditures.

Financial incentives and health provider behaviour: Evidence from a capitation policy in Ghana.

The capitation payment model has been used as a supply-side cost-containment tool in controlling physician behaviour. However, little is known regarding its effectiveness in controlling costs and discouraging use of low-value care. This study seeks to examine whether financial incentives in capitation influence provider behaviour, and if so, whether such behaviour compromises outcomes for inpatients with hypertension. To this end, we evaluate the effect on outpatient visits and inpatient outcomes of the introduction of capitation into a mixed payment system involving diagnosis-related groups and fee-for-service in the Ashanti region of Ghana. We use difference-in-differences with fixed effects and event study analysis of claims data over 48 months (2016-2019). We found that providers responded to financial incentives in capitation; outpatient visits were approximately 35% lower. However, we found no significant impact of capitation on inpatient outcomes; that is, the in-hospital death rate did not increase, and the length of hospital stay (which may be a rough indicator of the severity of illness) also did not increase. These findings indicate that patient health outcomes did not deteriorate. Evidence suggests that the observed reduction in outpatient visits may be in unnecessary or low-value visits, especially at lower levels of the healthcare system.

Stakeholder perspectives on payment reform in maternity care in the Netherlands: A Q-methodology study.

Based on theoretical notions, there is consensus that alternative payment models to the common fee-for-service model have the potential to improve healthcare quality through increased collaboration and reduced under- and overuse. This is particularly relevant for maternity care in the Netherlands because perinatal mortality rates are relatively high in comparison to other Western countries. Therefore, an experiment with bundled payments for maternity care was initiated in 2017. However, the uptake of this alternative payment model remains low, as also seen in other countries, and fee-for-service models prevail. A deeper understanding of stakeholders' perspectives on payment reform in maternity care is necessary to inform policy makers about the obstacles to implementing alternative payment models and potential ways forward. We conducted a Q-methodology study to explore perspectives of stakeholders (postpartum care managers, midwives, gynecologists, managers, health insurers) in maternity care in the Netherlands on payment reform. Participants were asked to rank a set of statements relevant to payment reform in maternity care and explain their ranking during an interview. Factor analysis was used to identify patterns in the rankings of statements. We identified three distinct perspectives on payment reform in maternity care. One general perspective, broadly supported within the sector, focusing mainly on outcomes, and two complementary perspectives, one focusing more on equality and one focusing more on collaboration. This study shows there is consensus among stakeholders in maternity care in the Netherlands that payment reform is required. However, stakeholders have different views on the purpose and desired design of the payment reform and set different conditions. Working towards payment reform in co-creation with all involved parties may improve the general attitude towards payment reform, may enhance the level of trust among stakeholders, and may contribute to a higher uptake in practice.

The Impact of Biosimilar Use on Total Cost of Care and Provider Financial Performance in the Medicare Oncology Care Model: A Population-Based Simulation Study.

INTRODUCTION: Payment for oncology care is increasingly moving from fee-for-service to value-based payment (VBP). VBPs are agreements in which providers are held accountable for total cost of care (TCOC) through risk-sharing arrangements with payers that tie reimbursement levels to TCOC benchmarks. Oncology biosimilars may play an important role in managing financial risk in the VBPs like Medicare's Oncology Care Model (OCM), but there has been limited research in this area. The objective of this study is to estimate the impact of biosimilar adoption on TCOC and oncology provider financial performance under the terms of the Medicare OCM. METHODS: We conducted a population-based simulation study using the Medicare Limited Data Set (LDS) and the methodology of Medicare's OCM. The primary outcome was the simulated average change in TCOC per 6-month episode of care attributable to use of biosimilars as an alternative to reference products. The study population consisted of episodes of care in 2020 and using the reference product or corresponding biosimilar for bevacizumab, rituximab, trastuzumab, epoetin alfa, filgrastim, or pegfilgrastim. TCOC was calculated for each episode of care with use of reference products only and compared with TCOC with corresponding biosimilars. The simulation calculated TCOC outcomes in cohorts of 100 episodes sampled from the Medicare LDS study population using a Monte Carlo simulation with 10,000 iterations. RESULTS: Among the total of 8281 6-month oncology care episodes identified in the study period (initiating January 2020 to July 2020) in Medicare claims, 1586 (19.2%) episodes met OCM and study criteria and were included. Applying the simulation methods to these observed episodes, biosimilar substitution reduced mean TCOC per episode by $1193 (95% CI $583-1840). The cost reduction from biosimilars represented 2.4% of the average TCOC benchmark and led to a 15% reduction in the risk of providers needing to pay recoupments to Medicare for exceeding TCOC benchmarks. CONCLUSIONS: On the basis of our simulation study using observed Medicare claims and OCM criteria, we found that biosimilar substitution for reference products can significantly lower episode TCOC and improve provider financial performance under the terms of the largest value-based payment model implemented to date.

How to Exercise Integrity in Medical Billing: Don't Distort Prices, Don't Free-Ride on Other Physicians.

This paper proposes that billing gamesmanship occurs when physicians free-ride on the billing practices of other physicians. Gamesmanship is non-universalizable and does not exercise a competitive advantage; consequently, it distorts prices and allocates resources inefficiently. This explains why gamesmanship is wrong. This explanation differs from the recent proposal of Heath (2020. Ethical issues in physician billing under fee-for-service plans. J. Med. Philos. 45(1):86-104) that gamesmanship is wrong because of specific features of health care and of health insurance. These features are aggravating factors but do not explain gamesmanship's primary wrong-making feature, which is to cause diffuse harm not traceable to any particular patient or insurer. This conclusion has important consequences for how medical schools and professional organizations encourage integrity in billing. To avoid free-riding, physicians should ask themselves, "could all physicians bill this way?" and if not, "does the patient benefit from the distinctive service I am providing under this code?" If both answers are "no," physicians should refrain from the billing practice in question.

Increases in Medicare Spending and Use after Private Equity Acquisition of Retina Practices.

PURPOSE: Private equity (PE) firms increasingly are acquiring physician practices in the United States, particularly within procedural-based specialties such as ophthalmology including retina. To date, the potential impact of ophthalmology practice acquisitions remains unknown. We evaluated the association between PE acquisition and Medicare spending and use for common retina services. DESIGN: Retrospective difference-in-differences analysis using the 20% Medicare fee-for-service claims dataset from January 1, 2015, through December 31, 2019. PARTICIPANTS: Eighty-two practices acquired by PE during the study period and matched control practices. METHODS: We used novel data on PE acquisitions of retina practices linked to the 20% sample Medicare claims data. Retina practices acquired by PE between 2016 and 2019 were matched to up to 3 non-PE (control) practices based on characteristics before acquisition. Private equity-acquired practices were compared with matched control practices through 6 quarters after acquisition using a difference-in-differences event study design. Data analyses were performed between August 2022 and April 2023. MAIN OUTCOME MEASURES: Medicare spending and use of common retina services. RESULTS: Relative to control practices, PE-acquired retina practices increased the use of higher-priced anti-vascular endothelial growth factor (VEGF) agents including aflibercept, which differentially increased by 6.5 injections (95% confidence interval, 0.4-12.5; P = 0.03) per practice-quarter, or 22% from baseline. As a result, Medicare spending on aflibercept differentially increased by $13 028 per practice-quarter, or 21%. No statistically significant differences were found in use or spending for evaluation and management visits or diagnostic imaging. CONCLUSIONS: Private equity acquisition of retina practices are associated with modest increases in the use of higher-priced anti-VEGF drugs like aflibercept, leading to higher Medicare spending. This finding highlights the need to monitor the influence of PE firms' financial incentives over clinician decision-making and the appropriateness of care, which could be swayed by strong economic incentives. FINANCIAL DISCLOSURE(S): Proprietary or commercial disclosure may be found in the Footnotes and Disclosures at the end of this article.

An analysis of a rural hospital's investment decision under different payment systems.

From an economic perspective, large investments in medical equipment are justifiable only when many patients benefit. Although rural hospitals play a crucial role locally, the treatments they can offer are limited. In this study, I characterize investment level that maximizes the total surplus, encompassing patients' welfare and producer surplus, and subtracting treatment costs. Specifically, I account for economic externalities generated by the investment in the rural hospital and for different utility losses that patients suffer when they cannot be treated locally. I demonstrate that the optimal investment level can be implemented if the Health Authority has the power to set specific prices for each disease. Additionally, I explore a decentralized situation wherein the investment decision lies with the rural hospital manager, and the Health Authority can only make a discrete decision between two payment systems: Fee-for-service, which covers all treatment costs, or Diagnosis-Related-Groups, which reimburses a price per patient based on the overall average cost. I find that the Diagnosis-Related-Groups system outperforms the Fee-for-service in terms of total surplus when the treatment cost at the rural hospital is lower. However, when the rural hospital has higher costs and the Health Authority seeks to incentivize investment, the Fee-for-service system is superior.

The Comprehensive Primary Care Plus Model and Health Care Spending, Service Use, and Quality.

Importance: Implemented in 18 regions, Comprehensive Primary Care Plus (CPC+) was the largest US primary care delivery model ever tested. Understanding its association with health outcomes is critical in designing future transformation models. Objective: To test whether CPC+ was associated with lower health care spending and utilization and improved quality of care. Design, Setting, and Participants: Difference-in-differences regression models compared changes in outcomes between the year before CPC+ and 5 intervention years for Medicare fee-for-service beneficiaries attributed to CPC+ and comparison practices. Participants included 1373 track 1 (1 549 585 beneficiaries) and 1515 track 2 (5 347 499 beneficiaries) primary care practices that applied to start CPC+ in 2017 and met minimum care delivery and other eligibility requirements. Comparison groups included 5243 track 1 (5 347 499 beneficiaries) and 3783 track 2 (4 507 499 beneficiaries) practices, matched, and weighted to have similar beneficiary-, practice-, and market-level characteristics as CPC+ practices. Interventions: Two-track design involving enhanced (higher for track 2) and alternative payments (track 2 only), care delivery requirements (greater for track 2), data feedback, learning, and health information technology support. Main Outcomes and Measures: The prespecified primary outcome was annualized Medicare Part A and B expenditures per beneficiary per month (PBPM). Secondary outcomes included expenditure categories, utilization (eg, hospitalizations), and claims-based quality-of-care process and outcome measures (eg, recommended tests for patients with diabetes and unplanned readmissions). Results: Among the CPC+ patients, 5% were Black, 3% were Hispanic, 87% were White, and 5% were of other races (including Asian/Other Pacific Islander and American Indian); 85% of CPC+ patients were older than 65 years and 58% were female. CPC+ was associated with no discernible changes in the total expenditures (track 1: $1.1 PBPM [90% CI, -$4.3 to $6.6], P = .74; track 2: $1.3 [90% CI, -$5 to $7.7], P = .73), and with increases in expenditures including enhanced payments (track 1: $13 [90% CI, $7 to $18], P < .001; track 2: $24 [90% CI, $18 to $31], P < .001). Among secondary outcomes, CPC+ was associated with decreases in emergency department visits starting in year 1, and in acute hospitalizations and acute inpatient expenditures in later years. Associations were more favorable for practices also participating in the Medicare Shared Savings Program and independent practices. CPC+ was not associated with meaningful changes in claims-based quality-of-care measures. Conclusions and Relevance: Although the timing of the associations of CPC+ with reduced utilization and acute inpatient expenditures was consistent with the theory of change and early focus on episodic care management of CPC+, CPC+ was not associated with a reduction in total expenditures over 5 years. Positive interaction between CPC+ and the Shared Savings Program suggests transformation models might be more successful when provider cost-reduction incentives are aligned across specialties. Further adaptations and testing of primary care transformation models, as well as consideration of the larger context in which they operate, are needed.

Developing a Sustainable Care Delivery Payment Model for Children With Medical Complexity.

Children with medical complexity (CMC) are a small but growing population representing <1% of all children while accounting for >30% of childhood health care expenditure. Complex care is a relatively new discipline that has emerged with goals of improving CMC care, optimizing CMC family function, and reducing health care costs. The provision of care coordination services is a major function of most complex care programs. Unfortunately, most complex care programs struggle to achieve financial sustainability in a predominately fee-for-service environment. The article describes how 2 programs in Wisconsin worked with their state Medicaid payer through a Centers for Medicare and Medicaid Services Health Care Innovation Award to develop a sustainable complex care payment model, and the value the payment model is currently bringing to stakeholders. Key elements of the process included: Developing a relationship between payer and clinicians that allowed for an understanding of each's viewpoint, use of an accepted clinical service model, and an effort to measure cost of care for the service provided supported by time-study methodology.

Comparing financing models for supplementary healthcare in appendectomy: activity-based costing (fee-for-service) vs. diagnosis related group remuneration (bundled payment) - a systematic review and meta-analysis.

PURPOSE: In Brazil, healthcare services traditionally follow a fee-for-service (FFS) payment system, in which each medical procedure incurs a separate charge. An alternative reimbursement with the aim of reducing costs is diagnosis related group (DRG) remuneration, in which all patient care is covered by a fixed amount. This work aimed to perform a systematic review followed by meta-analysis to assess the effectiveness of the Budled Payment for Care Improvement (BPCI) versus FFS. METHODS: Our work was performed following the items of the PRISMA report. We included only observational trials, and the primary outcome assessed was the effectiveness of FFS and DRG in appendectomy considering complications. We also assessed the costs and length of hospital stay. Meta-analysis was performed with Rev Man version 5.4. RESULTS: Out of 735 initially identified articles, six met the eligibility criteria. We demonstrated a shorter hospital stay associated with the DRG model (mean difference = 0.39; 95% confidence interval - 95%CI - 0.38-0.40; p < 0.00001; I2 = 0%), however the hospital readmission rate was higher in this model (odds ratio = 1.57; 95%CI 1.02-2.44, p = 0.04; I2 = 90%). CONCLUSIONS: This study reveals a potential decrease in the length of stay for appendectomy patients using the DRG approach. However, no significant differences were observed in other outcomes analysis between the two approaches.

Physician Variation and the Impact of Payment Model in Cardiac Imaging.

BACKGROUND: The influence of fee-for-service reimbursement on cardiac imaging has not been compared with other payment models. Furthermore, variation in ordering practices is not well understood. METHODS AND RESULTS: This retrospective, population-based cohort study using linked administrative data from Alberta, Canada included adults with chronic heart disease (atrial fibrillation, coronary artery disease, and heart failure) seen by cardiac specialists for a new outpatient consultation April 2012 to December 2018. Generalized linear mixed-effects models estimated the association of payment model (including the ability to bill to interpret imaging tests) and the use of cardiac imaging and quantified variation in cardiac imaging. Among 31 685 adults seen by 308 physicians at 136 sites, patients received an observed mean of 0.67 (95% CI, 0.67-0.68) imaging tests per consultation. After adjustment, patients seeing fee-for-service physicians had 2.07 (95% CI, 1.68-2.54) and fee-for-service physicians with ability to interpret had 2.87 (95% CI, 2.16-3.81) times the rate of receiving a test than those seeing salaried physicians. Measured patient, physician, and site effects accounted for 31% of imaging variation and, following adjustment, reduced unexplained site-level variation 40% and physician-level variation 29%. CONCLUSIONS: We identified substantial variation in the use of outpatient cardiac imaging related to physician and site factors. Physician payment models have a significant association with imaging use. Our results raise concern that payment models may influence cardiac imaging practice. Similar methods could be applied to identify the source and magnitude of variation in other health care processes and outcomes.