FEE-FOR-SERVICE VERSUS CAPITATION-BASED REIMBURSEMENT - HOW THE PAYMENT METHOD AFFECTS UTILIZATION OF ECHOCARDIOGRAPHIC SERVICES BY REFERRING PHYSICIANS

Historically, health insurance carriers (HIC) have reimbursed physicia ns on a fee-for-service basis for echocardiographic studies. With the emergence of managed care, the HIC now may have the option of paying o n a capitation basis. To determine whether the method of reimbursement had any bearing on the types of patients referred for echocardiograph ic services, we conducted a two-phase (retrospective) study. In Phase One, we assessed two groups of ambulatory patients with regard to pati ent characteristics, medical reason for referral, and echocardiographi c results. Group A (4,066 patients) had insurance plans that stipulate d reimbursement for echocardiographic services as part of capitation f or cardiology services. Group B (3,061 patients) had plans that reimbu rsed for echocardiographic services on a fee-for-service basis. lit Ph ase Two, we assessed a total of 5,947 patients (3,833 from Group A and 2,114 from Group B) over a period of 40 months to determine the frequ ency of referral for a second echocardiogram within 2 years of a norma l one and the repeat normalcy rate. The results showed that the capita tion reimbursement group included younger, predom inately female patie nts who were referred more often for a more benign reason and who more frequently were diagnosed echocardiographically with Less severe dise ase, higher rates of normalcy, and repeat normalcy. These findings sug gest that in our geographic area the capitation method of reimbursemen t permitted more liberal utilization of echocardiographic services. In this era of cost awareness, the study suggests the need for better sc reening of patients referred for echocardiographic services.