Direct Pay: A Simpler Way to Practice Medicine


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The best way to determine what the going rates are in your area and the specialties you will be pursuing is to ask. Polite inquiries made of potential clients and even competitors will help you gauge how much you should charge. The amount you earn will depend upon how much effort you put into growing and working your business and whether you choose to work full-time or part-time. Entrepreneurship Health Insurance. What Is a Medical Billing Service? Setting Up Shop For many people, the primary attraction of starting a medical billing service business is the ability to operate from the comfort of your own home.

Equipment Costs A significant advantage of a home-based business like a medical billing service is the relatively low cost of getting started. Software Costs The most expensive item you will need in order to get started is your billing software. Finding Clients The hardest part of any new business is building a customer base, and a medical billing service is no exception. Business for Sale Buying an existing medical billing business is an alternative to starting from scratch. Among the questions you should ask as part of your due diligence are: How many clients do you have? How long have you had them?

Are they under contract? What are the prices they pay? Pricing and Income There are three ways that medical billing services charge clients: per-claim, hourly, and percentage of claims paid. In the event a claim is denied due to faulty information provided by the client, you will be able to charge a new fee for resubmissions. Of course there are regional differences and this rate is for an employee — providers can expect to pay more to an independent contractor. Income Potential The amount you earn will depend upon how much effort you put into growing and working your business and whether you choose to work full-time or part-time.

Loading Disqus Comments Featured on:. All three elements are adjusted for multiple patient risk factors. Risk adjustment will only improve as experience with it grows. Critics raise concerns that bundled payments, like FFS, will lead to overtreatment because payment is tied to performing care, incenting providers to manufacture demand. Note that capitation plans, which have limited accountability for individual patient outcomes, have the opposite incentive: motivating providers to deny or delay the treatments patients need.

While definitive results are not yet available, our conversations with payers and government authorities in the United States, Sweden, and elsewhere have revealed no evidence that bundled payments have resulted in unnecessary surgeries or other treatments. Bundled payments are risk-adjusted and introduce transparency on outcomes, and the fixed payment will discourage unnecessary procedures, tests, and other services. Bundled payments and all care should incorporate appropriate use criteria AUC , which use scientific evidence to define qualifications for particular treatments.

Finally, some providers worry that bundled payments will result in excessive price competition, as payers demand discounts and low-quality providers emerge offering cheap prices. This concern is common among hospitals, which are wary of greater competition and want to sustain existing reimbursement levels. We believe this fear is overblown. Bundled payments include clear accountability for outcomes and will penalize poor-quality providers.

At the root of all these objections to bundled payments are critical failures that have held back health care for decades. Bundled payments will finally address these problems in ways that capitation cannot. As our multiple examples reveal, bundled payments are already transforming the way care is delivered. They unleash a new kind of competition that improves value for patients, informs and expands patient choice, lowers system cost, reshapes provider strategy, and alters industry structure for the better. With bundled payments, patients are no longer locked into a single health system and can choose the provider that best meets their particular needs.

Choice will expand dramatically as patients and physicians gain visibility into outcomes and prices of the providers that treat their condition. In a transparent bundled-payment world, patients will be able to decide whether to go to the hospital next door, travel across town, or venture even farther to a regional center of excellence for the care they need. This kind of choice, long overdue in health care, is what customers have in every other industry.

At the same time, the prices should fall. For conditions where legacy FFS payments failed to cover essential costs to achieve good outcomes, such as in mental health care or diagnostics that enable more targeted and successful treatments, prices may initially rise to support better care. But even these prices will fall as providers become more efficient. In a world of bundled payments, market forces will determine provider prices and profitability, as they should.

With bundled payments, only providers that are effective and efficient will grow, earn attractive margins, and expand regionally and even nationally. The rest will see their margins decline, and those with poor outcomes will lose patients and bear the extra costs of dealing with avoidable complications, infections, readmissions, and repeat treatments.

Providers will target conditions where they can achieve good outcomes at low cost. But those that remain will be far stronger. And unlike the consolidation that would result from capitation, this winnowing of providers will create more-effective competition and greater accountability for results. Providers will stop trying to do a little bit of everything and instead will target conditions where they can achieve good outcomes at low costs.

Where they cannot, they will partner with more-effective providers or exit those service lines. The net result will be significantly better overall outcomes by condition and significantly lower average costs. No other payment model can produce such a transformation. The shift to bundled payments will also spill over to drive positive change in pharmaceuticals, medical devices, diagnostic testing, imaging, and other suppliers.

Today, suppliers compete to get on approved lists, curry favor with prescribing specialists through consulting and research payments, and advertise directly to patients so that they will ask their doctor for particular treatments. As a result, many patients receive therapies that are not the best option, deliver little benefit, or are unnecessary.

With bundled payments, suppliers will have to demonstrate that their particular drug, device, diagnostic test, or imaging method actually improves outcomes, lowers the overall cost, or both. Suppliers that can demonstrate value will command fair prices and gain market share, and there will be substantial cost reduction in the system overall. The biggest beneficiary of bundled payments will be patients, who will receive better care and have access to more choice. The best providers will also prosper. Many already recognize that bundled payments enable them to compete on value, transform care, and put the health care system on a sustainable path for the long run.

Those already organized into IPUs for specific medical conditions are particularly well-positioned to move aggressively. Physician groups in particular have often moved the fastest. Many health systems, however, have been reluctant to get behind bundled payments. They seem to believe that capitation better preserves the status quo—a top-down approach that leverages their clout and scale.

They also see it as encouraging industry consolidation, which will ease reimbursement pressure and reduce competition. However, leading health systems are embracing bundled payments and the shift in competition to what really matters to patients. Health systems with their own insurance plans, or those that self-insure care for their employees, can begin immediately to introduce bundled payments internally.

Health systems that have adopted ACOs or other capitated models can also use condition-based bundled payments to pay internal units. Doing so will accelerate learning while motivating clinical units to improve outcomes and reduce costs in a way that existing departmental budgets or FFS can never match. Adopting bundles internally will be a stepping stone to contracting this way with payers and directly with employers. Payers will reap huge benefits from bundled payments. Single-payer systems, such as those in Canada, Sweden, and the U.

Veterans Administration, are well-positioned to transition to bundled payments for a growing number of medical conditions. Indeed, this is already happening in some countries and regions, with CMS leading the way in the United States. But many private insurers, which have prospered under the status quo, have been disappointingly slow in moving to bundled payments. Many seem to favor capitation as less of a change; they believe it preserves payment infrastructure while shifting risk to providers. As an excuse, they cite their inability to process claims for bundled payments, even though bundled claims processing is inherently far simpler.

Improving the way they pay for health care, however, is the only means by which insurers can offer greater value to its customers.

Direct Care

Insurers must do so, or they will have a diminished role in the system. We challenge the industry to shift from being the obstacle to bundled payment to becoming the driver. Employers, which actually pay for much of health insurance in the United States, should step up to lead the move to bundled payments.

This will improve outcomes for their employees, bring down prices, and increase competition. Self-insured employer health plans need to direct their plan administrators to roll out bundles, starting with costly conditions for which employees experience uneven outcomes. Should their insurers fail to move toward bundles, large employers have the clout to go directly to providers. The Health Transformation Alliance, consisting of 20 large employers that account for 4 million lives, is pooling data and purchasing power to accelerate the implementation of bundled payments.

The time has come to change the way we pay for health care, in the United States and around the world. Capitation is not the solution.


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It entrenches large existing systems, eliminates patient choice, promotes more consolidation, limits competition, and perpetuates the lack of provider accountability for outcomes. It will fail again to drive true innovation in health care delivery. Capitation will also fail to stem the tide of the ever-rising costs of health care. ACOs, despite their strong advocates, have produced minimal cost savings 0.

By contrast, even the simplified bundled payment contracts under way today are achieving better results. And experience in the United States and elsewhere shows that the savings can be far larger. Capitation might seem simple, but given highly heterogeneous populations and continual turnover of patients and physicians, it is actually harder to implement, risk-adjust, and manage to deliver improved care.

Bundled payments, in contrast, are a direct and intuitive way to pay clinical teams for delivering value, condition by condition. They put accountability where it should be—on outcomes that matter to patients. This way to pay for health care is working, and expanding rapidly. Much remains to be done to put bundled payments into widespread practice, but the barriers are rapidly being overcome.

Bundled payments are the only true value-based payment model for health care. The time is now. Michael E. Robert S. He is a coauthor, with Michael E. Peter Crowther. Porter Robert S. Bundled payments will finally unleash the competition that patients want. Executive Summary The United States stands at a crossroads in how to pay for health care. The Danger Although capitation may deliver modest savings in the short run, it is not the solution.

The Opportunity Bundled payments trigger competition among providers to create value where it matters—at the individual patient level—and will finally put health care on the right path. Porter and Thomas H. Lee, MD The days of business as usual are over. Rewards Poor Outcomes: Because FFS reimburses providers on the basis of volume of care, providers are rewarded not just for performing unnecessary services but for poor outcomes. Complications, revisions, and recurrences all result in the need for additional services, for which providers get reimbursed again.

Fosters duplication and lack of coordination. In response, providers have organized around functional specialties such as radiology. Perpetuates inefficiency. Reimbursement levels vary widely, causing cross-subsidization across specialties and particular services. The misalignment means that inefficient providers can survive, and even thrive, despite high costs and poor outcomes. Reduces focus. FFS motivates providers to offer full services for all types of conditions to grow overall revenue, even as internal fragmentation causes patients to be handed off from one specialty to another.

Direct Pay

By attempting to cater to a diverse population of patients, providers fail to develop the specialized capabilities and experience in any one condition necessary for the delivery of excellent care. Kaplan and Michael E. NEXconnex by Nexsyis 4 reviews. Learn more about NEXconnex All-In-One integrated medical management software solution for any size medical practice or clinic, group practice, or Autism Center. AccuMed by Accumedic Computer Systems 4 reviews.

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Case Study in Direct Pay Practice - workshop of Association of American Physicians and Surgeons

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Learn more about Clinic Essentials A clinic management solution designed with a comprehensive menu of features so that you can manage every aspect of your clinic. Bonafide by Bonafide Management Systems 1 review. ClinicGate by MedSites 1 review. Learn more about ClinicGate Medical billing software with appointment scheduling, patient records, receivables tracking, expenses management, and custom reports.


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    What is medical billing software? A single mistake or incorrect information in a bill can lead to a denied claim for a patient and a legal issue for a practice.

    Direct Pay: A Simpler Way to Practice Medicine Direct Pay: A Simpler Way to Practice Medicine
    Direct Pay: A Simpler Way to Practice Medicine Direct Pay: A Simpler Way to Practice Medicine
    Direct Pay: A Simpler Way to Practice Medicine Direct Pay: A Simpler Way to Practice Medicine
    Direct Pay: A Simpler Way to Practice Medicine Direct Pay: A Simpler Way to Practice Medicine
    Direct Pay: A Simpler Way to Practice Medicine Direct Pay: A Simpler Way to Practice Medicine

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