By: Jim Greenwood, CEO, Concentra
While many may debate the benefits of a medical fee schedule, most feel they play a part, some believe a large one, in controlling medical costs. Most will also agree that a fee schedule in isolation, without appropriate utilization controls, really does very little in limiting medical costs.
The rub comes with how the medical fees are set relative to each other. Fees that are either too high or too low create unintended consequences, from access to quality providers to potential distorted utilization incentives toward more invasive specialty care. One thing most will agree upon is the fact we will soon, if not already in some states, have a shortage of primary care providers. And while there are many reasons for this, most will point to a key reason being inadequate reimbursement as compared to other types of physicians. This reimbursement disparity is often clearly highlighted in certain current state fee schedules.
The trend of states adopting a Resource-Based Relative Value System (RBRVS) as the basis for revision of their fee schedule is considered, in our view, to be a very positive move towards bringing reimbursement rates across specialties into parity. Balancing the need to retain access to the highest quality specialty providers while assuring the primary care provider an appropriate reimbursement for the key role they play as gatekeeper in the complicated workers’ compensation environment.
Components of a successful RBRVS reimbursement system entail using an annual economic escalator, such as the Medicare Economic Index (MEI), coupled with a state specific conversion factor that is NOT tied to the Medicare conversion factor (for obvious reasons). The conversion factor(s) should be set above the current reimbursement rates of the Medicare system. Use of multiple conversion factors is often needed when revising a fee schedule as a change to a single conversion factor would result in undesired and dramatic swings in reimbursement. Examples of states that have successfully implemented this type of system are Texas, Maryland and Georgia.
Progress is being made with revision of outdated fee schedules, more work is needed, but we feel confident that the success of the states that have followed the reimbursement model outlined above will continue to guide the way for policy makers in other states to bite the bullet and make the necessary changes to assure that access to high quality providers is maintained.
That is my opinion, what is yours?
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Biography for Jim Greenwood
Jim Greenwood assumed his position as Chief Executive Officer for Concentra in June 2007. Prior to this he was the organization’s Executive Vice President of Corporate Development since 1997, where his responsibilities included acquisitions, joint ventures, and new business initiatives. Since 1993, when Jim joined a predecessor company as Chief Financial Officer, Concentra has completed over 100 acquisitions and joint ventures. Mr. Greenwood was in the banking industry for seven years prior to 1993, serving as Senior Vice President for Bank One, Texas, N.A. and a predecessor financial institution. Jim graduated from Baylor University in 1983 and is a certified public accountant. In addition to serving on Concentra’s Board of Directors, Jim is a Board member for Amerita, Inc., a privately held specialty infusion company. Mr. Greenwood is also on the Board of Directors for the Founders Forum. Founders’ Forum is an organization for conservative business leaders who are focused on economic and fiscal issues. Mr. Greenwood also serves on the Baylor University Healthcare Administration Program’s Advisory Council.
Concentra is a leading national health care company focused on improving America’s health, one patient at a time. Through its affiliated clinicians, the company provides occupational medicine, urgent care, wellness and preventive services, physical therapy, physical examinations, travel medicine and drug testing from 307 medical centers located in 40 states. Concentra has over 100,000 employer clients and treats approximately 25,000 patients per day. In addition to these medical center locations, the company serves employers by operating over 250 work-site medical facilities. Through this complement of services, Concentra is raising the standard of health by putting individuals first, treating them with clinical excellence, and focusing on their ongoing wellness.