95% of physician visits reimbursed under fee-for-service: 6 findings

Although value-based payment models, such as accountable care organizations, may involve a capitation payment to the overall organization, the vast majority of physician practices are still paid on a fee-for-service basis, according to a study published in Health Affairs.

For the study, researchers used supplemental surveys of physician offices conducted as part of the Medical Expenditure Panel Survey to determine the prevalence of capitation for the period of 1996 through 2013.

Here are six findings from the study.

1. The overall percentage of physician office visits covered under pure capitation arrangements — those in which a physician or other provider receives a fixed monthly payment per patient, regardless of the services provided — fell from 6.6 percent in 2007 to 5.3 percent in 2013.

2. As pure capitation agreements declined, the percentage of fee-for-service visits grew. By 2013, 94.7 percent of all physician office visits were covered under fee-for-service arrangements.

3. Although policy makers have sought to shift provider payments away from fee-for-service, financial losses with pure capitation in many physician groups led providers to reject 100 percent risk sharing as a payment method.

4. As a result, physician capitation declined in all regions of the country between 1996 and 2013.

5. Between 1996 and 2013, physician capitation was always highest in the West, with 14.5 percent of physician office visits covered by capitation arrangements in 2013. As of 2013, physician capitation fell to an average of 3.2 percent in the rest of country.

6. Based on the study's findings, the authors concluded, "To be successful, payment reform must confront the reality that individual physicians are practices are unwilling to accept all of the risk for providing care. Thus, payment reform will need to operate within a fee-for-service framework at the level of the individual physician or practice."

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