Fee-for Service Vs Value Based Payment

Posted by mgsionline on May 25th, 2013

The transition from fee-for service to value based payment is presently a promising change in the healthcare domain. The main idea behind this transition is to deliver quality healthcare services to all US citizens at a lower cost. Before delving into this in detail, let us first understand the difference between these payment models and what impact they have on the physician practice management.

Fee-for Service: According to this plan, Medical Billing and Collections are based on the service rendered irrespective of the quality of care. It is possible that the Physicians provide services that are really not required, which will not only affect the insurance but the patients in terms of deductable, co-pays & premiums. Moreover this model doesn’t educate patients on Preventive care to avoid unnecessary costs.

Value Based payment: Per this model, medical insurance billing should be based on the quality; for the physicians to become eligible for Incentives. Bundled Payments, Capitation are some payment methods under value based payments.  The ultimate goal of this model is to lower the cost while increase the quality of care for the patients.

Comparison: Fee-for service has a long history in medical insurance billing with some advantages. It offers great flexibility to work with Healthcare Practices of  various sizes, specialties, forms & more. It provides accountability for each and every service rendered. However, it inflates healthcare physician billing costs invariably, which is a setback. In addition, it complicates the coordination of care across multiple healthcare Practices and that is the reason why value based payment  is emerging. The advantage of value based payment is that it offers efficient patient care in a timely manner. Healthservice coordination across multiple Providers will be excellent. Easy accessibility and patient information exchange across Practices are some of the benefits worth mentioning. Plus, it holds accountability for total healthcare rather than accounting only for individual services. To conclude, value based payment model offers a better physician practice management rather than increasing the healthcare expenditures. Physicians can outsource their Medical Billing and collections to a reputed Provider billing company like MGSI which will help them to concentrate in providing quality care since the payment will be based on the performace.

About MGSI:

With over 20 years of experience in providing physician billing services, MGSI has a lot of expertise in handling the Medical Insurance Billing.. This Florida based medical billing company resolves any problem that hinders physician practice management. For more details, log on to www.mgsionline.com