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Related Experiment Videos

An access-oriented negotiated fee schedule. The Caterpillar experience.

R H Egdahl, R D Hertenstein

    Annals of Surgery
    |September 1, 1987
    PubMed
    Summary
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    Caterpillar's surgeon reimbursement system ensures employee access to qualified surgeons and reduces costs by improving claims processing and negotiating fees. This market-driven approach prioritizes physician acceptance over rigid formulas.

    Area of Science:

    • Healthcare Management
    • Health Economics
    • Medical Policy

    Background:

    • Caterpillar Corporation (CAT) implemented a unique surgeon reimbursement system in Peoria, Illinois.
    • The system aimed to balance access to care for employees and their families with cost containment.

    Purpose of the Study:

    • To describe the CAT system for surgeon reimbursement.
    • To analyze its mechanisms for cost savings and ensuring surgeon access.
    • To evaluate its physician acceptance compared to traditional models.

    Main Methods:

    • Utilizing Current Procedural Terminology (CPT-4) codes for accuracy.
    • Rebundling incorrectly unbundled surgical services.
    • Reviewing surgical assistant charges for appropriateness.

    Related Experiment Videos

  • Employing a "degree of difficulty" relative value scale (DODRVS) adjusted by a regional factor for fee determination.
  • Allowing balance billing under specific patient disclosure conditions.

    • Main Results:

    • The CAT system achieved cost savings through improved claims processing and fee negotiation.
    • It ensured access to a selected network of qualified surgeons for CAT employees.
    • The system relies on physician acceptance and market-driven negotiation, differing from formula-driven approaches like Resource-Based Relative Value Scale (RBRVS).

    Conclusions:

    • The CAT surgeon reimbursement model successfully balances access and cost-effectiveness.
    • Physician support is crucial for the success of this market-driven, negotiated fee schedule.
    • The system offers an alternative to traditional, formula-based reimbursement methodologies.