Current trends in health plan payment methods for the facility costs of outpatient care

Outpatient hospital and ambulatory care services represent the fastest growing part of national health care expenditures. Until recently, most health plans reimbursed providers' outpatient facility costs on the basis of billed charges. Some health plans have now implemented prospective payment systems with incentives for limiting the volume of ambulatory care services. Findings from 1997 telephone interviews with senior managers in national managed care companies and local health plans reveal that recent reforms at some health plans have been generally incremental, building on existing systems, but use of outpatient prospective payment systems by private health plans is still rare. However, health plan managers expect continued reforms in the future as experience is gained with new payment systems such as those based on the Ambulatory Patient Groups case mix grouping method.