The Claims Consolidator: A Collaborative, Private Sector Approach to Adjusting Fee Schedules to Support Effective Primary Care
Harold S. Luft, PhD
Economists and primary care physicians agree that the current structure of fees works against the development of a medical home and has led to the growing shortage of primary care physicians. Although the Medicare fee schedule is at least partially to blame for this, the politics surrounding Medicare limit its ability to appropriately and flexibly alter fees. Moreover, a simple increase in fees for physician services does nothing to promote creative solutions for more effective primary care, such as the provision of educational services by non-clinicians, shared appointments, e-mail and telephone contacts, and similar “non-billable” activities.
Private health plans do not face the same political constraints on creativity, but they typically have small market shares and thus either will have no impact on behavior, or if they have a large market share, are usually not trusted by providers. The recent United Health Care/Ingenix settlements are likely to make the Medicare schedule the de facto standard for all payers.
I have outlined a comprehensive restructuring of the payment to create a far more efficient and quality delivery system. (Luft, Total Cure: The Antidote to the Health Care Crisis, Harvard University Press, 2008) The plan I describe, SecureChoice, offers universal coverage for those things that require insurance (essentially hospitalization and chronic illness) but has little government involvement in the details of the payment system. Even income-based subsidies, a critical role for government, are handled entirely behind the scenes without any differences in fees paid to providers. At the center of my proposed plan are primary care physicians. They will have total flexibility in how they practice and set fees, but the cost implications of those choices are reflected in the premiums their own patients pay. A payment intermediary chosen by each PCP handles all the billing and provides the information the clinician needs to constantly improve practice quality and value.
SecureChoice was designed to offer a vision of how the US health care system could be changed. The Congress and the Obama Administration are preparing major legislative changes, but the timing of the fiscal crisis (and the current need to propose a new Secretary of DHHS) may make it impossible to pass such a comprehensive change. There is an opportunity, however, to make significant headway on the SecureChoice vision for primary care without substantial legislation. This can be done with a private sector approach to altering the fee schedule for primary care. It requires consolidating the information on all of a PCP’s practice and then, on a voluntary basis, developing alternative payment schemes. It sounds daunting, but isn’t.
Those PCPs willing to participate would simply funnel all their insurance claims through a claims consolidator working (partially) on behalf of the primary care physicians. (The governance issue here is complex because it needs to be structured to not run afoul of antitrust rules. Openness in the governance rules and processes may help in this regard, as might some legislative language. Antitrust law typically allows competitors to collaborate in setting certain standards, especially if such standards enhance competition. The intent is to provide a mechanism for developing alternative standards for payment, but not collectively negotiate the payment levels. To establish provider trust, the consolidator is not controlled by payers, but payer resources are used in accomplishing the effort.
The claims consolidator will immediately offer some services (e.g., “cleaning” bills to meet individual payer rules, checking patient eligibility, etc.) that most large group practices already have. Much more importantly, the claims consolidator will be able to access claims data on that PCP’s patients when seen by other clinicians because insurers would have the incentive to pool their data. Payers already share data with Ingenix even though it is owned by United, which competes with the other payers. With a new governance structure, Ingenix might be the logical entity to provide under contract the chassis on which this effort could be built.
Once pooled, the data will have patient and PCP identifiers replaced and then be made available to qualified users under HIPAA-compliant agreements. Participating PCPs will know their own codes and can see how they compare with other providers in their area. Payers and others can identify the practice patterns that seem most effective in managing patient care, but would not know the identity of those PCPs. Payers may, however, solicit PCPs who believe they are efficient to reveal their identification code and shift to more flexible fee schedules (e.g., long office visits at higher fees, payments for ancillary staff, electronic communication, etc.) Payers will compete for physicians to sign up with them. Creative health plans will adjust their premiums to give patients incentives to shift to PCPs adopting the new arrangements. Such incentives might even vary from PCP to PCP, rather than simply having a “preferred tier.” From the plan perspective, the savings in specialty and hospital use will more than offset the increased payments to PCPs. The higher and more flexible fees for primary care will enable the development of a true medical home and attract more young clinicians into primary care.
The claims consolidator can also offer several other valuable services to PCPs. It will obviously need trusted business associate relationships with each PCP in order to process claims. This can be expanded to offer support for a partial electronic health record that, even if not immediately fully functional for real-time care, can support the registry, lab result reporting, and other functions that may improve ongoing management of care. Instead of requiring PCPs to bear the full implementation costs for such systems, the consolidator could “rent” them access to the system and its ongoing support. The governing board may allow multiple vendors to compete in providing value added services. Individual and small group practitioners will then be able to share in the comparative learning opportunities now accessible only to large group practices.