Value-Based Reimbursement Model Highly Beneficial For Primary Care

by | Published on Aug 17, 2015 | Medical Billing

Primary Care
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Primary care compensation has improved substantially, a consequence of physician and hospital reimbursement moving to value-based models based on quality and outcomes, from the earlier fee-for-service model. Healthcare staffing is also witnessing a new trend, with hospitals luring more primary care physicians through financial incentives with a view to seize more outpatient revenue in the new value-based care model. And the Affordable Care Act (ACA), or Obamacare, has a lot to do with it. This has had an effect overall on how even medical billing companies are viewing their clients.

While it’s a widely recognized fact that specialists earn significantly more than primary care physicians, compensation for the latter has actually been rising each year at a greater percentage than that for the former.

The 2015 report on provider compensation released by the Medical Group Management Association (MGMA) reveals that:

  • The compensation for primary care physicians rose by nearly 3.6% in 2014 from the previous year to reach a grand total of $241,273
  • For specialists though, the compensation rose to $411,852 in 2014 but only at a 2.39% rate of increase from 2013

It is the growth rate from 2012 that highlights the difference further. Primary care doctors’ pay rose by over 9% from 2012 while total compensation for specialists rose by just 3.9%.

Value-based Models Facilitated by ACA

As observed earlier, this trend is seen as a result of the movement of the reimbursement of hospitals and doctors towards value-based models from fee-for-service medicine. Quality of care, and outcomes have become more important. The increasing demand for primary care physicians amidst a doctor shortage can also be considered a major factor. Increasing demand combined with shortage is certainly a recipe for increased pay.

Primary care physicians are the key to shifting to value-based care. The Affordable Care Act has made government health programs, health insurers and employers stress on outpatient care at lower cost. These doctors are offered more incentives to increase the quality of care provided to outpatients and thereby improve outcomes so that patients can avoid going for more expensive specialist healthcare at a later stage.

The Noticeable Effects of Obamacare

According to MGMA figures, around 11% of payments for primary care doctors currently come from value-based contracts – a big jump from 6.7% in 2013 and just 3% in 2012. This percentage is predicted to increase to around 33% in three years.

According to the 2015 Medscape Physician Compensation Report, in spite of the rising income for primary care physicians, they still earn much lower than specialist physicians. However, the healthcare industry is certainly witnessing a situation where primary care doctors are getting increasingly valuable.

Rajeev Rajagopal

Rajeev Rajagopal, the President of OSI, has a wealth of experience as a healthcare business consultant in the United States. He has a keen understanding of current medical billing and coding standards.

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