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Instead, insurance companies present the data to employers, who choose the level upon which they wish to base reimbursements.
The broad investigation that New York's attorney general announced last week, questioning the "reasonable and customary" calculations on which insurers base reimbursements for out-of-network medical services, raised the lid on a particularly confusing part of the nation's health care system.
The penalty can mean the loss of up to 1% of a hospital's annual Medicare base reimbursements.
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Government health plans like Medicare and Medicaid base reimbursement for drugs on the average wholesale price.
Rather than base reimbursement decisions on this lack of data, the insurance industry should partner with academic institutions and government agencies, combining resources to obtain critical data needed to improve outcomes for patients with these challenging conditions.
Payers need to take account of patient populations they should base reimbursement in part on risk adjustment, so as not to punish healthcare providers who care for sicker, more complicated patients.
Hospitals, under healthcare reform laws, stand to lose Medicare base reimbursement funds if their readmission rates for certain medical conditions are too high.
Finally, section three discusses consecutively whether programs should use penalties or rewards, the size of the incentive and the role of the base reimbursement system, whether the program should pay for absolute or relative performance, the frequency of payments, and the duration of P4P incentives ("how to incentivize").
Although that trend is happening slowly in some communities, payers are increasingly basing reimbursements on the quality of care provided, not just the number and type of procedures.
Managing populations works in tandem with health insurance industry efforts to shift more payments to doctors and hospitals away from fee-for-service medicine to value-based reimbursement that bases reimbursement on how well providers perform and whether their patients achieve better health outcomes.
In other words, basing reimbursement on discharge diagnoses is just Monday morning quarterbacking, health care policy style.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com