Fee-for-service medicine | The rumors of my death have been greatly exaggerated!

Let me start with apologies for stealing Mark Twain’s words!  And, a quick search will show I’m not the only one to apply these words to fee-for-service medicine.

Be sure to take a look at Five urban legends about risk-adjusted diagnosis coding after reading this post.

Volume to value

For years, we’ve been reading about the transition from “volume to value” and told that the era of fee-for-service medicine is on its last legs.

CMS implemented payment bonuses and penalties for quality reporting and meaningful use, and developed the Medicare Shared Savings Plan (MSSP) and Accountable Care Organizations (ACOs) to share the cost risk of caring for patients with health care providers.

Risk-adjusted diagnosis coding

Our coding blogs and journals are filled with articles about risk-adjusted diagnosis coding. (I’ve written about it, have a webinar about it, and am putting together a whole page of resources on my website about the topic.) But, physician services are still largely paid by the CPT^® code submitted on the claim form.

Risk-adjusted diagnosis coding is still used primarily by Medicare to pay Medicare Advantage Organizations. (MAOs) Some medical practices in turn have contracts with MAOs in which their end of year reimbursement varies for that population of patients.

Years ago, I worked with a physician who always put the patient’s co-morbid conditions on his charge cards. He told me, “Betsy, I want the insurance company to know just how sick this patient is.” He was—and still would be—ahead of his time.

We do want the insurance company to know how sick the patient is, and we don’t want to assign a diagnosis code that supports the medical necessity for the service, but for most of us, it doesn’t change today’s or tomorrow’s payment.

Incentives

Policy analysts said that the incentives for quality reporting, MIPS and alternate payment models were too small to effect behavior in a meaningful way.

CMS itself is limiting ACO options for 2019, decreasing the options for ACOs that are not willing to share downside financial risk with Medicare. And although private insurers have their own quality measures and incentive payments, when managers in medical practices analyze their revenue, most revenue is still generated from fee-for-service medicine.

I don’t claim to be a policy analyst and I am not commenting on whether this is good or bad. I am suggesting that coders, billers and administrators need to stick to their knitting, pay attention to coding, billing, collecting and denials related to fee-for-service medicine.

Additional resources

The CodingIntel Guide to Hierarchical Condition Categories provides a comprehensive list of HCC and Risk Adjusted Diagnosis Coding resources available on CodingIntel.

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