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Alternative payment models for emergency departments

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As more healthcare facilities move away from a fee-for-service model, they may find it difficult to apply alternative payment models to the emergency department, frequently a safety net for patients who may be uninsured or unable  for other reasons to pay for care.

The ED also presents challenges because emergency care isn’t set up to follow patients after discharge, which makes it difficult for organizations to obtain a full grasp on care costs, according to new study published in the American Journal of Managed Care. Furthermore, ED doctors may order many  tests to rule out life-threatening conditions for patients, and so payment reform may lead to misdiagnoses as care patterns change, study authors note.

Emergency room  operations present big challenges to healthcare-payment reform. So  the  authors of a new study in the American Journal of  Managed Care examine how payment models under the Department of Health and Human Services’ four-category framework could work. They suggest that hospitals could, in FierceHealthcare’s paraphrasing:

  • “Connect the fee-for-service model to quality benchmarks. In this model, according to the study, EDs would still operate under a fee-for-service system, but they could earn additional payments by achieving certain goals, like improving patient satisfaction or better care coordination. Being paid directly for coordination of care can lead to better outcomes and lower costs, according to the study.”
  • “Build a new payment model based on fee-for-service. One way this could work is for providers to establish frequent-use programs, which cut costs by personalizing plans for patients with more complex medical, psychological and social needs. EDs could also offer bundled payments for more episodic conditions, which may reduce both costs and unnecessary readmissions.”
  • “Create a population-based payment system….  ED providers would be payed a fixed sum based on local population, previous emergency care use or projected costs across a certain window of time. Basing payments around population gives incentives to providers to address inefficient care and to prevent unneeded ER visits for acute care….”

To read the study, please hit this link.

To read the FierceHealthcare article on the study, please hit this link.

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