How will payment reform impact diagnostic services?

by Lauren Dubinsky, Senior Reporter | October 30, 2014
David Fisher
By David Fisher

Early, accurate diagnosis is the foundation of high-quality health care. Medical innovation in the U.S. has led to tremendous breakthroughs in diagnostic acuity and accuracy — saving lives and improving quality of life.

In fact, the fundamental role that diagnostic technologies play in assisting providers to identify problems and target treatment has never been greater.

At the same time, payment for diagnostic services may be at risk. Of course, payment for new health care technologies is an important building block in the acceptance and ultimately routine clinical utilization of medical procedures and technologies.

Once the research and clinical communities have proven efficacy, widespread adoption of a new technology generally occurs after Medicare and private insurance accept the new technology. As a result, the payment policies of insurance companies and other payors play an outsized role in determining which patients gain access to the benefits of innovation.

Within the current fee-for-service (FFS) environment, the reimbursement landscape for diagnostic tests and procedures is well understood. However, as the U.S. begins to shift from FFS to a fee-for-value (FFV) model emphasizing bundled payments, accountable care organizations (ACOs), and capitation models, the way in which diagnostic procedures will fit into these new payment schemes remains unclear.

For example, diagnostic services determine which bundled payment a provider may receive, yet those services are not part of the payment. How will the activities, tests, and procedures leading to the diagnosis be reimbursed in the future?

As we transition to value-based payment, policymakers should ensure providers' incentives are balanced. For example, will value-based incentives improve the quality of care, or is it focused on the provider's finances?

Will the measures intended to ensure high-quality care extend beyond documenting process measures to truly measure quality of care? Further, will financial incentives to do less reduce quality by curbing appropriate testing and procedures?

Just as important, will value-based care incentivize the development and adoption of new diagnostic procedures and tests? Or will controlling costs incent delaying or limiting access to new diagnostic innovations — despite the potential of these innovations to improve the accuracy of treatment decisions and the quality of patient care?

Examples of payors' reluctance to reimburse for new procedures are real in the FFS environment. CT lung cancer screening for high-risk patients, CT colonography, and beta amyloid imaging are all diagnostic procedures with the potential to improve public health.

To a varying degree, each procedure has experienced challenges on the path to widespread clinical adoption. Are these FFS anomalies or the new value-based operating procedure?

An accurate diagnosis sets in motion a flurry of directed activity. However, if we fail to incent and pay for the work that goes into developing that diagnosis, our healthcare system will flounder.

We're standing at the beginning of a new era of value-based payment with the most advanced diagnostic tools within reach. Protecting and preserving access to those tools will help ensure that patients are accurately diagnosed and receive the most appropriate care at the most efficient cost.

David Fisher is vice president of health policy and strategy at Siemens Healthcare.

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