More insurers change how they pay medical providers

Commercial insurers are moving rapidly from the old system of paying health providers for every test or procedure they do toward payments based on the value rather than volume of services, according to a report by Catalyst for Payment Reform, a business coalition focused on health care costs.

Marketplace: How Insurers Are Adjusting Payment To Medical Providers
Commercial insurers are ditching or at least tweaking the way they pay medical providers, according to a report out Tuesday from the group Catalyst for Payment Reform. For years, commercial insurers as well as state and federal governments have paid doctors and hospitals under what's called fee-for-service. To many in the healthcare world, fee-for-service is seen as one of the key drivers behind the run-up in healthcare costs, because it offers providers a financial incentive to provide extra services that may not be needed (Gorenstein, 9/30).

Dallas Morning News: Quick Uptake For New Health Care Payment Plans
Health insurance companies, hospitals and physicians are moving with alacrity toward new payment models that promote value rather than volume of care. The Catalyst for Payment Reform, a business coalition concerned with the high cost of medical care, reported Tuesday that 40 percent of insurance plan payments are now made with methods that stress affordability and quality. Last year, the survey found 10.9 percent of payments to hospitals and doctors were made with value-based payments (Landers, 9/30).

Modern Healthcare: Incentive-based Contracts Thriving In Commercial Insurance Market
Health plans that cover two-thirds of commercially insured Americans used incentives this year to motivate hospitals and doctors to improve quality and manage costs, according to a new survey. Those contracts were responsible for 40% of insurers' medical spending. The survey is the second by Catalyst for Payment Reform, a health policy not-for-profit founded and funded by employers, and the results offer a snapshot of how some of the nation's largest insurers use the promise of financial gain or loss to influence the way providers deliver care and run their businesses. Four of the five largest U.S. insurers were among 39 health plans that responded to the survey, and together they cover 101 million lives, Catalyst said. About 15% of the enrollees had providers with incentive-based contracts, the survey found (Evans, 9/30).

Meanwhile, The Charlotte Observer reports on how one large physician practice is moving from 'volume to value' -

Charlotte Observer: OrthoCarolina Of Charlotte To Bundle Knee, Hip Replacement Costs
Hospital leaders in Charlotte talk a lot about transforming the health-care system and moving from "volume to value." By that, they mean a future where doctors and hospitals get paid, not just for treating patients each time they get sick, but for keeping them well. Still, the current system relies mostly on so-called "fee-for-service" reimbursement, under which patients and insurance companies pay for each appointment, test or procedure. The more services, the more payments. Instead of waiting for change to be imposed, doctors at Charlotte's OrthoCarolina, one of the region's largest physician groups, have taken the lead in adopting a system to simplify billing and improve coordination of care. Patients undergoing knee and hip replacements can get a single bill with a "bundled payment" that covers preoperative care, surgery, followup appointments, 90 days of physical therapy and the services of a "patient navigator" who serves as a guide through the process (Garloch, 9/29).