Computers in Healthcare

An Alternative to Fee For Service

Fear of the unknown is keeping many medical practices from joining Accountable Care Organizations (ACO) or Clinically Integrated Networks (CIN), or the IPA that is associated with them. All of these groups are actively trying to take on new types of contracts with payers, commercial and Medicare/Medicaid. They hear things like value-based payments, capitation, and pay for performance, and it’s scary. Fee for Service (FFS) is old, known and comfortable, despite its continued failures.

Staying on the sidelines as the reimbursement models change is not a prescription for success. In the short-term, a practice may be able to keep its volume based on traditional Medicare, Medicaid, and commercial plans that pay on FFS, but the number of lives associated with alternative payment models is growing. Over time it will definitely impact your patient base.

Physician’s practices turn over, or lose existing patients on a continuous basis. In primary care, the loss is estimated at 10%-20%, while specialists run 40%, and procedural specialists may have to replace their entire patient base with new referrals annually.

Not being part of these new and emerging models means cutting yourself off from the patients that are attributed, or assigned to these organizations for the purpose of managing care. Managing and coordinating care of those patients starts with trying to keep the care of those patients among the members of the ACO or CIN.

An added risk is that the commercial payers with which you participate may find that the shared risk contracts of organizations that they are engaged with are sufficient to be the complete network of providers in a given geographic area, such that they cancel the contracts with physicians who are not par with these arrangements. There is no benefit to a payer to have to administer a larger network than necessary, especially when there are physicians in the area that are prepared to provide service while accepting and sharing in a risk related to the cost and quality of care. And remember, those organizations are trying to capture all the business in their service areas and will be pressing the payers to drop those not with them.

While joining an ACO or CIN will add to the complexities of practice, it is better to be in the game, than on the outside looking in. Being part of these organized efforts to deliver care under an incentive program, especially early on, is an opportunity to learn about your practice generally with an upside economically. As time goes on, these models of payment will include upsides and downsides. Those that are in early can learn without consequences, giving themselves time to adapt their practice patterns to be successful as the models evolve to sharing risk. Join in later, and you will be subject to shared risk, without the opportunity to change.

It is a wishful thinking to believe that shared risk/savings, which are what these alternative models are offering, will be a passing phase. Regardless of the political climate, the underlying motivation for the alternative to FFS is to motivate the medical community to take responsibility for costs and quality.

There is little to no new money being willingly thrown at healthcare. Therefore, if you are going to have a crack at improving, or even staying stable relating to revenue, you will need to be part of the effort to find money by improving the costs and trends of care.

Alex Tate is a digital marketing specialist, content strategist, and health IT Consultant at CureMD.


One response to "An Alternative to Fee For Service"
  • January 30, 2018
    Arvind Cavale

    Alex Tate, what % of your salary is risk-based. Once you change your reimbursement arrangement, then you have the right to lecture others.

    Delivering health care and taking sizable risk is a professional conflict of interest. ACO and CIN have already failed. Trying to revive these dead concepts is futile.

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