Highmark drops plans for episodic care pay method

The insurer has abandoned plans to pay specialists through capitation.

By Julie A. Jacob, amednews staff. Oct. 23/30, 2000.

Managed Care: What's Next?"
With the managed care system drawing complaints from all quarters, doctors, patients, payers and even insurers themselves found themselves looking for alternatives to a concept that hadn't met its promise of improving care while reducing costs. This 2000-02 occasional series highlighted what physicians and others were doing to come up with a way to improve the system -- or replace it with something else.

Highmark Blue Cross Blue Shield has scrapped former plans to pay cardiologists, ophthalmologists and orthopedic surgeons by episodic care reimbursement.

The company said that, simply, the capitated payment method does not work.

Pittsburgh-based Highmark said simulations of the payment method showed that it would result in higher payments for specialists treating healthier patients and lower payments for specialists treating sicker patients.

Highmark's attempt in starting capitation for specialists was profiled in the May 15 issue of American Medical News.

At the time, Highmark said it planned by July 1 to implement the system in its 150,000-enrollee SecurityBlue Medicare HMO product.

The company even had planned on invoking an all-products clause that would have forced specialists to sign up with SecurityBlue to see any Highmark members, who make up about 40% of the HMO members in the Pittsburgh area.

Specialists had widely opposed Highmark's efforts to impose episodic care payments, which would have paid physicians a fixed monthly payment based on a longer-term, total episode of care.

Specialists wondered how Highmark could figure out how to make simple, equitable payments out of complicated cases.

As it turned out, the company by its own admission couldn't figure out how to do it.