Independence Blue Cross Cutting Pay for Some Doctor Procedures by 50%

Move Gives Value-Based Payment Scheme the Stick

At least one health plan nudges the value-based payment system toward an approach that many experts believe has to happen if the scheme is to succeed. Most value-based payment systems reward doctors for keeping costs down, but don’t detract from their pay if costs go up.

On August 1, Philadelphia-based Independence Blue Cross will begin paying up to 50% less for some procedures, the Philadelphia Inquirer reports. “In a hypothetical example of a dermatology visit, the doctor might now get $100 for a full-body skin exam and $50 for a biopsy, if it is done during the same visit by the same doctor,” the newspaper reports. “Under the new rules, the payment for the exam would be cut to $50, for a total payment of $100, or a 33 percent overall reduction for the episode.”

The move doesn’t come entirely out of the, er, blue. The health plan has been looking at just how to shift some of the downside of risk to doctors for some time now. In a discussion with Managed Care in November 2015, Ron Brooks, MD, a senior network medical director at Independence, indicated that doctors who accept the rewards of a value-based system should also accept the risk. As we reported, Brooks said that most physicians were not taking the downside risk.

“Meaning they don’t lose money for lower-quality measures,” says Brooks told us at the time. “They simply don’t earn as much as they could if they were achieving higher quality and cost standards. In our experience, in the Philadelphia area, most physicians are currently more comfortable with upside risk arrangements. As they become more accustomed to these risk-based payment programs and are successful, they will most likely be more interested in taking on full risk.”

Apparently, the health plan thinks they are ready. What prompted the insurer’s move this time was that the health plan found that its doctors used a coding modifier that adds payment for an added service nearly twice as often as doctors nationwide.

Ginny Calega, Independence’s vice president of medical management and policy, tells the Inquirer: “We’re in a changing environment. We’re looking to be good stewards of our customers’ and our members’ health-care dollars, and we’re benchmarking ourselves with other payers, regulators for national trends.”

Source: Philadelphia Inquirer