3 payment methods that could reduce diagnostic errors
- A new Health Affairs study authored by Urban Institute fellow Robert Berenson and Baylor College of Medicine professor Hardeep Singh looks at three payment-related approaches to reducing diagnostic errors. The first involves potential changes in the Medicare Physician Fee Schedule that embrace diagnostic management teams and health IT tools that enhance the diagnostic process, reduce "stringent" documentation requirements and add new payment codes.
- The second approach is new alternative payment models (APMs) that focus on improving diagnostic accuracy in challenging or complex cases and make additional resources available to support diagnoses, such as "condition-specific centers of diagnostic expertise" that can provide second and third opinions.
- Berenson and Singh's third approach involves increasing the accountability of APM recipients. The accuracy of diagnoses that trigger APM payments and set payment amounts, they write, should be confirmed by APM recipients.
Providers have been ramping up their efforts to reduce diagnostic errors, which account for as many as 80,000 deaths every year in U.S. hospitals. In September, for example, more than 40 healthcare organizations and patient advocacy groups founded a coalition called ACT for Better Diagnosis that aims to increase diagnostic accuracy by engaging stakeholders to take practical steps like improving how doctors communicate test results.
Berenson and Singh's study places emphasis on payment-related approaches to reducing diagnostic errors, largely through APMs.
"Current fee-for-service payment models, including the Medicare Physician Fee Schedule, do not account for quality and value of care," the authors write. "For example, physicians merely have to provide a diagnostic code on a claim form to be paid, whether or not the diagnosis is accurate. Perversely, a misdiagnosis or a missed diagnosis can generate several additional billing opportunities for the clinician responsible for the care episode or for downstream clinicians who encounter the patient on their diagnostic journey."
The future of value-based payment reform relies fairly heavily on APMs, and the adoption of alternative models continues to rise. In 2017, nearly 35% of total healthcare payments involved APMs — a 6 percentage point increase from the year prior, according to a recent report from the Health Care Payment Learning and Action Network. In 2015, the percentage of healthcare payments tied to APMs was 23%.
"Virtually all of the APMs that have been proposed and are being tested focus on reducing costs and improving other aspects of quality and safety, but they ignore improvement in making more accurate and timely diagnoses," Berenson and Singh write. "Given that APMs are meant to add value, timely and accurate diagnosis should be a priority they could support."
Providers, however, remain leery of the risk that comes with APM adoption. A recent study from RAND and AMA found that physician practices report high levels of financial risk aversion when it comes to adopting new APMs. Those levels are especially high among physician practices covering multiple specialties and markets.
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