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Fee-for-Service Will Remain a Feature of Major Payment Reforms, Requiring More Changes in Medicare Physician Payment

September 2012
Health Affairs, Vol. 31, No. 9
Paul B. Ginsburg

Many health policy analysts envision provider payment reforms currently under development as replacements for the traditional fee-forservice payment system. Reforms include per episode bundled payment and elements of capitation, such as global payments or accountable care organizations. But even if these approaches succeed and are widely adopted, the core method of payment to many physicians for the services they provide is likely to remain fee-for-service. It is therefore critical to address the current shortcomings in the Medicare physician fee schedule, because it will affect physician incentives and will continue to play an important role in determining the payment amounts under payment reform. This article reviews how the current payment system developed and is applied, and it highlights areas that require careful review and modification to ensure the success of broader payment reform.

Access to this article is available at the Health Affairs Web site. (Free Access to this article is available until Sept. 5, 2013. Note: Link to Health Affairs not supported on mobile devices.)





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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.