June 2003

Participating Provider ReimbursementParticipating Provider Reimbursement

Key FactsKey Facts

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Pay for PerformancePay for PerformanceDefined as "Differentiated payment among providers based on performance of quality and efficiency measures so that desired outcomes occur through changed behavior.”

Source: Med-Vantage, Inc

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Pay for PerformancePay for PerformancePercent of total reimbursement involved for pay for performance incentive payments often averages:

• 10% for physicians

• 2-4% for hospitals

Source: Med-Vantage, Inc; 2003

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Revenue Cycle ManagementRevenue Cycle ManagementProcess to oversee and evaluate the entire system involving patient charges and payments, including:

•Registration•Insurance Verification•Order Entry •Charge Capture •Billing Processing

•Account Monitoring and Collection; •Payment Posting; •Financial Analysis & corrective actions

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Electronic ClaimsElectronic Claims% of claims processed electronically is

• 67% overall• 48% Physicians• 86% Hospitals• Almost 70% of group MD practices

automate some portion of their claims

Source: Health Data Management Magazine; 2003

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Physician ParticipationPhysician ParticipationThe Average % of Physician Practice Revenue from Managed Care Plans is

• 45.8% Overall• 49.7 Primary Care • 43.1% Specialists

Source: Center for Studying Health System Change; 2002

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Physician ParticipationPhysician Participation90.% of MDs have at least 1 contract.

The average number of managed care contracts per physicians who contract:

• 13.1 Overall• 11.4 Primary Care • 14.3 Specialists

Source: Center for Studying Health System Change; 2002

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Physician ReimbursementPhysician ReimbursementMethods of Physician Reimbursement Used by HMOs:

• 8.8% Salary • 0.8% Profit Sharing • 72.7% Fee-For-Service• 12.4% Bonus Program• 71.6% Capitation Source: Aventis; 2001 Data

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Physician CapitationPhysician CapitationPhysicians with managed care contracts that derive some level of revenue from capitation:

• 48.6 % Overall• 66.7 % Primary Care • 36.4 % Specialists

Source: Center for Studying Health System Change; 2002

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Physician CapitationPhysician CapitationPhysicians with capitated contracts avg % of Total Revenue from capitation:

• 29.7 % Overall• 32.2 % Primary Care • 26.6 % Specialists

Source: Center for Studying Health System Change; 2002

June 2003

Participating Provider Reimbursement Key FactsParticipating Provider Reimbursement Key Facts

Physician CapitationPhysician CapitationAverage Primary Care Capitation Rates:

• $ 12.55 Commercial • $ 32.13 Medicare

Source: NHI: 2001 Data