Will Value-based Payment Encourage Cherry-picking Patients?

by | Last updated Jun 27, 2023 | Published on Mar 3, 2017 | Healthcare News, Medical Billing

Value Based Payment
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Medical billing companies help physicians stay financially relevant in the changing healthcare landscape. One of the most significant developments they are dealing with is the shift to value-based reimbursements. Since the turn of the 21st century, the focus has shifted from fee-for-service to value-based payment. While the traditional fee-for-service reimbursement model was based on quantity of services, value-based care models focus on patient outcomes and how well physicians can improve quality of care based on specific measures, such as reducing hospital readmissions, using certified electronic health records, and improving preventative care.

But is the healthcare system’s movement toward reimbursements based on outcomes and care budgets encouraging cherry-picking – choosing patients with better payments or fewer health problems? Unethical as it is, a recent Medscape survey seems to show that physicians are seeing pressures to indulge in cherry picking.

Medscape asked participants if they would cherry-pick patients “to avoid those with comorbid disease or those who won’t follow treatment regimens”. Though up to 63% of physicians replied no, 17% said yes and another 20% said it would depend on the circumstances. Some physicians specified that if reimbursements changed, they might evaluate patients and reject those who are uncooperative and noncompliant.

Physicians do have a right to reject prospective patients, but the new American Medical Association code restricts this right. Under the AMA code, dismissals are restricted to the following situations:

  • The physician lacks expertise or needed resources
  • When the patient is abusive
  • Nonadherent and high-acuity patients that affect the physician’s ability to treat other patients, which can also lead the medical practice to lose money

The Medscape survey revealed that many specialists cherry-picked patients, with surgeons in the forefront. Fully 38% of orthopedic surgeons and plastic surgeons, 31% of urologists, 27% of ophthalmologists, 24% of gastroenterologists, and 18% of both family physicians and internists endorsed cherry picking. However, only 7% of critical care doctors, 9% of pediatricians, 11% of oncologists, and 14% of neurologists supported the option to select patients.

The Affordable Care Act could have made cherry-picking more common as the increase in insured people led to even busier practices which could have pushed physicians to think of new ways of limiting patients.

Cherry-picking has a negative impact on patients. Basically, it is wrong to discriminate against those who chronically ill. Moreover, when physicians go “out-of-network” with a plan, patients who are members of that plan may have to pay higher rates for out-of-network services or pay the physician out of pocket and then bill the plan.

Reports indicate that many physicians have opted out of Medicare due to uncertainty in reimbursement and punitive rules. However, in a recent article in StatNews, an official of the Centers for Medicare and Medicaid Services Office of Managed Care says that Medicare Advantage (MA) could pave the way to making value-based care work. MA allows physicians to the type of important preventive care and chronic care management at far lower premiums and out-of-pocket costs than ever before. Earlier these options were reserved for wealthy individuals who can afford retainer medicine or concierge medicine. Under MA, payments for each beneficiary are risk-adjusted, meaning that there are higher payments for sicker patients. This discourages physicians as well as health plans from choosing healthier patients and skimping on medical care.

There is no doubt that future includes value based reimbursement. As physicians prepare for these changes in the payment landscape, they would benefit from robust medical billing services. An efficient medical billing company can help providers meet quality cost standards and ensure proper reporting to maximize reimbursement.

  • Natalie Tornese
    Natalie Tornese
    CPC: Director of Revenue Cycle Management

    Natalie joined MOS’ Revenue Cycle Management Division in October 2011. She brings twenty five years of hands on management experience to the company.

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    Meghann joined MOS’ Revenue Cycle Management Division in February of 2013. She is CPC certified with the American Academy of Professional Coders (AAPC).

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    Hired for her dental expertise, Amber brings a wealth of knowledge and understanding of the dental revenue cycle management (RCM) services to MOS.

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    Loralee Kapp
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    Loralee joined MOS’ Revenue Cycle Management Division in October 2021. She has over five years of experience in medical coding and Health Information Management practices.