HMOs pushing specialists to sign up for capitation
Outcome will determine future roles in medicine
Nationwide, managed care plans are trying to shift more specialists from their customary fee-for-service reimbursement schedule to a capitated system based on a so-called episodes-of-care approach.
In Pittsburgh, for instance, Highmark Blue Cross/Blue Shield has been pushing for — and specialists fighting against — an episodic care-based payment plan for specialists. The HMO claims the system could reduce unneeded lab tests by as much as 20% without affecting the frequency of other vital therapeutic procedures performed by most covered specialists — while encouraging overutilizers to get in sync with other physicians.
Specialists, noting that episodic care is very different from primary care capitation, are skeptical about just how useful this system would be.
Also, they are upset because many HMOs are including episodic care capitation under their "all-products" umbrella, meaning physicians must accept it if they want to participate in the plans’ other products.
For some time, independent practice associations and multispecialty practice groups have had a kind of cap system to internally allocate payments among their specialists. However, rather than looking for a way to fairly distribute reimbursements, specialists are afraid HMOs are more interested in finding ways to force them to work more for less pay.
Under the episodes-of-care approach, selected specialties are paid fixed monthly rates for an entire episode of specialty care. The length of the episode is usually defined to last between three and nine months. At referral, the specialist provides the HMO with information about the patient, and the HMO uses that to develop and assign a monthly capitation rate.
In the past, it has been considered much more difficult to devise a specialty capitation system than one for primary care because specialists only see a small percentage of the overall patient population. Also, related costs for specialists tend to be higher and vary widely compared to primary care since the medical problems being treated tend to be more exotic and/or extreme.
Reasoning that specialty capitation is a fast-approaching reality, some specialists are offering up their own alternative payment proposals which they say rewards provider efficiency without having to resort to capitation.
Episodes-of-care capitation: The basics
• What: The idea behind episodic care came from the widely used practice of bundling obstetrical services, including prenatal care and delivery, into one rate.
• Who: Major specialists such as cardiologists, ophthalmologists, orthopedists, and their surgery counterparts are most often covered.
• How: Specialists are paid monthly over a set referral period, usually three to nine months.
• Payments: The payment process kicks in once the specialist receives a referral from a primary care physician. The cap rate is determined by the medical condition of each patient based on factors like their age, gender, any comorbidities, and whether care was performed in a doctor’s office or an intensive care unit. A value is then assigned to each case, which is updated as the patient’s condition changes.
The final capitation rate can also be affected by how much money is left in the funding pool used to pay specialists.
• Specialty capitation on the rise:
More than half of insurers now use some form of capitation for at least some specialists, reports the American Medical Association in Chicago. In 1999, the average percentage increase in capitation rates among providers was:
— primary care, 8.7%;
— all providers, 6.7%;
— specialists, 0.1%
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