Fee-for-service payment – an evil practice that must be stamped out?

Abstract

Co-opting physicians to regulate Fee-for-Service (FFS) payment is more feasible and simpler to administer than capitation, Diagnosis-Related Groups (DRGs) and pay-for-performance. The key lies in designing and revising the fee schedule, which not only defines and sets the fee for each item, but also the conditions of billing. Adherence to these regulations must be strictly audited in order to control volume and costs, and to assure quality. The fee schedule requires periodic revisions on an item-by-item basis in order to maintain balance among the providers, to list new drugs, devices and equipment, and to reflect the lower market prices of existing ones. Implementing the fee schedule will facilitate the control of balance billing and extra billing, and the introduction of more sophisticated methods of payment in the future.

Achieving Universal Health Coverage by Focusing on Primary Care in Japan: Lessons for Low- and Middle-Income Countries

“…This expansion should be in line with the institutional capacity to regulate fees and monitor adherence to the conditions set. 14 The key to reform is managing the expectations of the public on the services they are entitled to, and of the physicians on their income and practice conditions. Given the resource constraints, only a restricted range of specialist services can be made accessible to most of the population.…”

Healthcare Reimbursement and Quality Improvement: Integration Using the Electronic Medical Record Comment on "Fee-for-Service Payment - an Evil Practice That Must Be Stamped Out?"

“…However, linking reimbursement to quality requires substantial effort to assess performance on strict measures of the processes or outcomes of care. Ikegami (2) has argued that given the shortcomings of salary, capitation, DRGs and P4P systems, FFS is simpler to administer since it requires less complex mechanisms to ensure appropriate function. He points out that "DRGs and P4P require well-designed patient identification, classification, recording, and monitoring systems."…”

“…Aspects of the EMR should be individualized with respect to each medical specialty or subspecialty to optimize documentation, data retrieval, analysis, and remuneration mechanisms specific to that specialty. Ikegami states that since physicians are not trained to practice efficiently, the effectiveness of DRG, P4P, and prospective payment systems may be limited (2). However, such limitations may be overcome by increasing the efficiency of physician practice, a goal that could be fostered through use of the EMR in both formal physician training and continuing medical education.…”

Two Wrongs Do Not Make a Right: Flaws in Alternatives to Fee-for-Service Payment Plans Do Not Mean Fee-for-Service Is a Good Solution to Rising Prices Comment on "Fee-for-Service Payment - An Evil Practice That Must Be Stamped Out?"

“…1 Excellent arguments against the several alternatives to FFS, however, is not a necessarily a good defense of FFS, especially if the pro-FFS arguments are marred with several inaccuracies as applied to the United States, which is a key player in Professor Ikegami's Editorial. Equally disconcerting, I see notable weaknesses in his proposals to improve FFS payment plans.…”