Understanding the Models of Care under the Affordable Care Act (ACA)

Regardless of the mixed feelings elicited by the Obama administration and the Affordable Care Act (ACA), changes are in fact imminent in the healthcare field.  It is important that health care providers understand the alternate models of reimbursement and develop the ability to make an informed decision of which types of coverage to accept in their practice.  The ACA has shifted focus from the long accepted model of fee-for-service payments to one that focuses on patient outcomes, removal of unnecessary or duplicate services, and proper management of chronic disease to cut down or eliminate hospital visits for these patients who can be managed at home.  This attempt at preventative healthcare by the ACA has required insurance companies since 2012 to cover many different preventative services without any out-of-pocket costs to the patient.  Hopefully, these small changes will allow more people to see their Primary care physicians on a regular basis, and cut down on the prevalence of preventable disease and the concurrent higher cost of medical care.

Since the initiation of the ACA, many practices have been forced to change their model of care.  New models that venture away from the fee-for-service include the Patient-Centered Medical Home (PCMH), Bundled Payments, Accountable Care Organizations (ACOs), Capitation, or even the Direct Pay model which cuts out the middle man altogether (the insurance company).  Whichever model your practice chooses to adopt, it is important to fully understand it and to maximize the benefits for your office.

            Patient-Centered Medical Home (PCMH) models aim to produce a greater engagement between the doctor and the patient, especially when managing chronic conditions (Gosfield, 2013).  The main goal here is to establish proper management of chronic patients, thus reducing their hospital visits and length of stay.  Most insurance companies pay either a per member or per month fee to General Practitioners, or even a care management fee per chronic patient to manage their condition without hospital admissions.  The downside to this model emerges in the fact that the payers use a “take it or leave it (Gosfield, 2013)” type of payment, and close attention must be paid to the qualifying conditions for payment under the contract.

            The Bundled Payment model groups multiple providers together in the same financial risk pool.  In other words, bundled payment programs may make a lump sum payment to an entity, such as a hospital, which then disperses the money as it sees fit.  Often, this type of payment is associated with “episode rates,” or budgets for a specific patient with a specific condition.  Here, the budget would take into account the services that such a patient would require, which should see a result of physician being less likely to lose money.  In order to accomplish this, the boundaries must be set ahead of time, including time and range of services needed to manage the patient.  The obvious downside is the fact that we can not accurately predict complications and increased care required. The objective of this type of model plans to increase quality of care as well as efficiency.  However, if this is the way you choose to go it is of the utmost importance to make sure you are clear on what services are included in the bundle, what promoted the insurance company to bundle in the first place, and when the bundle ends.  Also, pay close attention to the small print about how disputes are handled and what can and cannot be challenged as far as payments are concerned.

            Accountable Care Organization (ACO) models generally entail some form of bundled payment and measuring of results.  This is done by determinants such as quality of care, performance, efficiency, and patient satisfaction (Gosfield, 2013).  According to the Centers for Medicare and Medicaid Services, ACOs contain a plethora of providers including groups of physicians, hospitals, and other health care professionals who opt to render care together to increase the quality of care delivered.  “When the ACO succeeds both in delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves (CMS, 2015).”  Aside from the money dispersed after saving, ACOs retain more bargaining power in terms of the best prices on equipment and supplies.  Similar to the other models, close attention must be paid to the contractual agreements made with the ACOs, including the governing body, payment disputes, and resolutions.

            Capitation models are based on a fee per patient per month, rather than per service given.  Basically, physicians who accept capitation agree to a budget prior to seeing patients just based on conditions alone, and are responsible to treat within that budget.  The plus side of this approach assumes that unnecessary tests and procedures will be greatly reduced although the doctor can also lose money if “something comes up” that was not within the predetermined budget.  Unlike bundled payments, physicians in this case withstand much more risk of being hit in their own pockets if going over budget, according to the American Medical Association (2015).

            Lastly, Direct Pay models seem to be emerging more and more as primary care physicians have become increasingly fed up with the experience of insurance companies governing the way that they treat their patients.  In this model, there are a few different possibilities; the first being a straight cash model in which patients pay out-of-pocket for a procedure or consultation (Bendix, 2014).  The second one is more common, in which patients pay a monthly fee to be included in the physician’s panel, a fee that covers unlimited office visits  and 24/7 access to the doctor.  Often, this monthly fee includes any procedures and tests offered in the office (Bendix, 2014).  The third idea, otherwise known as concierge medicine also maintains a monthly fee, but is usually much higher.  For this heftier fee, services include comprehensive physicals and guaranteed no-wait appointments.  Unlike the other two direct pay models, most concierge service offices maintain contracts with insurance companies as well.  Per Jeffrey Bendix, a medical economics expert, the direct pay model allows physicians to spend quality time with their patients while still making money whereas the traditional fee-for-service model forced doctors to run a factory in order to make any money, minimizing the time spent with each patient (2014).  The transition from other models to the direct pay model can prove difficult, and should be done slowly and carefully.  According to Bendix, such a transition should require three to six months in order to sustain smooth evolution.  Many patients will not understand sudden out of pocket payments which may result in some loss of patient retention.  Rest assured, however, that even though you may lose some patients, the ability to spend more time with each patient will prove rewarding!  “Simply spending more time with patients inherently leads to better results (Dr. Matt Jacobsen, CEO of SignatureMD).”

            Regardless of the model that your practice decides to implement, reimbursement is imperative to keeping doors open, especially when working with Medicare or Medicaid patients.  In order to optimize reimbursement, documentation must be thorough, concise and accurate.  Billing at the proper level of service is important, although many are hesitant to do so for fear of being audited or red flagged.  “The higher the level of service, the higher the code number used to bill the visit and the greater the reimbursement” (Bendix, 2013). Fear of being audited should never deter from billing at the highest level of service, as this fear needs only exist if falsification to the documentation occurs.  The best way to maintain expert documentation is to take advantage of the Electronic Health Records’ (EHRs) ability to create templates and prompts according to Kathy DeVault, the director of health information management practice excellence for the American Health Information Association (2013).

            Finally, consider the following strategies to avoid auditors from red flagging your practice.  The worst possible approach entails billing the same level of service too frequently.  Often, the middle billing level is chosen for each patient which raises a red flag to auditors; bill for the appropriate level, regardless of which one it is!  Another major suspicion-raising process involves billing at significantly higher codes than other practices in the surrounding geographic area.  Technology has allowed for auditors to compare physicians with their peers in their region, easily identifying outliers (Raemarie Jiminez, director of product development for the AAPC, 2013).  I cannot stress enough that the best way to avoid auditing and repercussions from governmental agencies is to DOCUMENT, DOCUMENT, DOCUMENT!  Even something that seems relatively trivial, such as acquiring information from a family member can make the difference between one level and the next.  Ultimately, the two-pronged goal here is to make sure that you receive payment for services rendered, and that you are choosing the proper healthcare model for your practice and for your patients!

 Works Cited

Bendix, J., M.A. (2014). DIRECT PAY: A promising care model, with challenges. Medical Economics, 91(16), 25-29. Retrieved from http://search.proquest.com/docview/1557093330?accountid=8204

Bendix, J., M.A. (2013). Cracking the code. Medical Economics, 90(10), 20-22,24-25. Retrieved from http://search.proquest.com/docview/1371799244?accountid=8204

Boyles, S., Bendix, J., Marbury, D., Mazzolini, C., Ritchie, A., & Verdon, D. R. (2014). Risk vs. reward: How to make new payment models work for your practice. Medical Economics, 91(7), 22-4, 26-8, 30. Retrieved from http://search.proquest.com/docview/1523933482?accountid=8204

Gosfield, A. G., J.D. (2013). Understanding the new payment models. Medical Economics, 90(15), 44-6, 49. Retrieved from http://search.proquest.com/docview/1433119115?accountid=8204

Radnofsky, L. (2014, Feb 07). U.S. news: Lawmakers reach deal on doctor payments --- five-year plan would settle how physicians are reimbursed by medicare, end recurring 'doc fix' issue in congress. Wall Street Journal Retrieved from http://search.proquest.com/docview/1495450931?accountid=8204

THE ACA'S IMPACT ON PHYSICIAN REIMBURSEMENT. (2014). Medical Economics, 91(23), 17-18. Retrieved from http://search.proquest.com/docview/1641968352?accountid=8204