withhold system

withhold system

Managed care Any financial incentive by an HMO which ↓ compensation to its doctors for 'inefficient' use of services–ie, by excess diagnostic testing, hospitalization and referrals to specialists; withholds have fallen into disfavor as they tend to encourage physicians to undertreat Pts. See Covert financial incentive, ERISA. Cf Bonus system.
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Brown said the HMO and Little Rock area doctors scrapped the withhold system at the end of last year and a revised rate schedule is being paid in full to physicians as part of the normal billing cycle.
While many jurisdictions tolerate the operation of withhold systems by self-funded and indemnity company payers, it is not clear that these systems sufficiently encourage cost-effective treatment patterns.