New Medicare plan extends greater financial risk to care providers

Jan 26, 2015 | Health Insurance Billing

The intersection of cost and quality is a long-debated pressure point in the health care field. Policy efforts to incentivize doctors and care facilities to do their best work came to a head recently, when the Obama administration rolled out plans to change the way the government pays medical bills, which total $3 trillion each year. 

This year, a fixed 30 percent of Medicare payments to health care providers will be determined by the quality of care extended to patients. By 2018, the goal is to extend that segment to 50 percent of payments. Advocates of the measure argue that in the past, too many health care providers were receiving full payment for less-than-stellar treatment. By basing nearly a third of payments on quality, proponents hope to encourage providers to pay more attention to the patient experience and quality of care. 

Medicare covers 50 million Americans, so the implementation of this system will have broad repercussions for healthcare management administrators. Since the introduction of the Affordable Care Act, doctors have become liable to assume a certain degree of financial risk depending on the care they provide. As the biggest buyer of health care services in America, Medicare paid $362 billion to providers last year, and the number is climbing. Larger portions of doctors' and hospitals' patient pools may come aboard with some financial risk. 

"For doctors and health facilities, the system will tie tens, and then hundreds, of billions of dollars in payments to how their patients fare, rather than how much work a doctor or hospital does, lowering the curtain on Medicare's system of paying line-by-line for each scan, test and surgery," writes Alex Wayne on Bloomberg Businessweek. 

As changes to our health care payment system are approved by the federal government, accounts receivable management needs strong support to meet its goals. By outsourcing receivables management, operations can focus on high-priority debts.