Bundled Payments vs. Fee-for-Service in Medical Insurance Billing

The medical insurance billing debate continues and many believe that the traditional mode of fee-for-service reimbursement, where individual services are billed and paid separately, may be on its way out. On the other end of the spectrum, capitation, where a lump sum is paid per patient, regardless of what services are performed, never gained real support. The middle ground may be bundled services.

Service Bundling May Replace Fee-for-Service

With this model, providers bill a single fee based on clinically defined care episodes. Treatment for a specific illness or condition is billed under one bundle regardless of tests or procedures performed. For instance, a hospital would provide one bill for a surgery which includes tests, pre-op and post-op care, etc. Where in the past there would be bills from the emergency staff, the surgeon, the anesthesiologist, and on down the line.

Bundled payments have been looked to in the health care debate as a way of reducing health care costs. Provisions are included in the 2010 Affordable Care Act to encourage the billing method. Proponents believe that service bundling incentivizes doctors and hospitals to work together at reducing costs and complications by removing things like duplicate testing. Bundled services are also believed to discourage unnecessary care since that practice will not increase payment to the provider.

Don’t Attempt Service Bundling Alone

There are some considerations to make before a provider decides to include bundled services as part of their medical practice management. In particular, research must be done to determine which services are routinely provided together and make sense to bundle. This is where a good electronic medical records system (EMR) can help. The data your EMR collects can be reviewed in reports that will give a clear picture of what services should be bundled together. ProMD Medical Management uses the latest and best EMR and billing software on the market. If you are in need of a new billing system, or would like to outsource it altogether, ProMD can provide this service, and with it all the data you will need to successfully bundle services.

Bundling services is a skill that comes with practice, experience and deep knowledge of CPT coding. Generally speaking, bundled services will include services and procedures that are usually performed together. If a service is not intricately tied to the others being performed, it will likely need to be billed separately. Unfortunately, right now even the top billing software will not automatically bundle services. It is the responsibility of the coder to review documentation and determine what services needs to be bundled.

Service bundling should be carefully considered. It can streamline medical practice management, but if not done correctly it could negatively affect your medical insurance billing bottom line. Contact ProMD for help getting started with service bundling, especially if your billing system is not set up to provide the data you will need. We will put a system in place for your practice that will exploit the advantages of service bundling while helping you avoid any of its possible disadvantages.

ProMD Medical Billing is happy to help with your billing assessment needs so you can maximize profits and increase patient satisfaction. To learn more about how ProMD can make your practice run like a well-oiled machine, call 866-960-9558 or fill out our online form to request a billing assessment.

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