New Payment Models Transform the Role of Medical Billing

From a long period of time, the healthcare industry has followed the traditional model of payment for claims settlement – fee-for-service model – where specified amount has to be paid for the healthcare service. Recently, the health insurance companies are adopting to new payment models, and they have actively begun considering and testing the new payment options.

The main objective of this is to change the way medical practitioners, hospitals, and other healthcare providers are paid. In other words, the reform in the payment model is made to improve the quality and reduce the use of unnecessary and costly services.

As per the traditional payment system, physicians and health care providers gets their payment based on the tests and procedures used for the treatment. The time doctors spend with their patients is not considered during reimbursement. This causes displeasure amongst both physicians and the patients. Hence more and more physician is opting for alternate models of payment, where they can provide best healthcare to their patients.

The shift from traditional fee-for-service model will make it more difficult for physicians, health care providers, insurance companies, and payers to get adjusted to the new payment reforms. Without proper guidance about the working of new payment reforms, this will be a challenge for the physicians and the healthcare providers to get generous reimbursement for their services. The main challenge will be choosing the most appropriate model of payment, viz. pay for coordination, pay for performance, episode/bundled payment, and comprehensive care/total cost of care payment. Reformation in the federal health policy have opened the gates for Accountable care organizations, medical homes, and bundled payments. Due to these changes, many physicians are inclined to change the traditional payment option.

Few of the more popular modes of payment amongst the masses are:

Episode/Bundled Payment, where the physicians get single payment for “bundles” of related services rather than separate payments for each service during an episode of care. This ensures better-coordinated and more efficient care and reduces the need of providing unnecessary treatment.

Pay for Performance, where the physicians receive payment for achieving defined and measurable results related to patient experience, resource use, and other factors.

Pay for Coordination, where the health care providers get periodic reimbursement for specified care coordination services. This model is applicable only for certain types of healthcare providers.

Comprehensive Care, where the physicians receive a single risk-adjusted payment for complete health care services needed by a patient/specific group of people for a certain fixed period of time.

The risk associated with adopting the new model is not just limited to selecting the most appropriate model of payment. Practical feasibility of these models in terms of financial and operational setup should also be considered. Moreover with each model the need for accuracy in documentation and coding becomes even greater, hence necessitating a well organized billing process. Further demonstrations of these models in the functional environment are required to fully understand advantages, disadvantages, and operational feasibility of these models. is the ultimate medical billing organization with incomparable expertise in all the aspects of models of payment. Our experts have studied each of these models extensively, and we have immense knowledge on pros and cons about each of the model. Moreover, our billing specialists provide support to practitioners based in all US states and our experts handle billing for over 40 specialties.