Healthcare Reimbursement Analysis

The PPACA involves many legislative changes that will affect hospital reimbursement. The PPACA requires every citizen in the United States to get health insurance and those that are noncompliant will face tax penalties. The PPACA requires all states to establish an American Health Benefit Exchange by 2014 to assure that health insurance is affordable to individuals and companies with 100 or less employees. The PPACA establishes a pay for performance program, which is a value-based purchasing (VBP) program in which Medicare pays hospitals based on their performance as compared to how they meet quality measures. Beginning in 2013 using the VBP program, hospitals will be paid based on their performance on many quality measures for acute myocardial infarction, pneumonia, heart failure, surgeries and hospital associated infections.

In 2012, the ACA found an excessive amount of readmissions of patients that were hospitalized within 30 days for the same medical conditions. This factor viewed under the ACA as a quality issue and CMS implemented value-based incentive payments based on performance in a set of quality measures. The plan is to implement a pay for performance (P4P) in formulas used by Medicare to reimbursement providers. “The objective is to link reimbursement to quality and efficiency as an incentive to improve the quality of health care, as well as reduce system-wide costs” (Shi and Singh, 2015). In addition to the P4P, nonprofit hospitals also focus on continual improvement, data and cost containment throughout the organization (Adamopoulos,

Since the late 1980s, Medicare has reimbursed physician services using the Medicare Physician Fee Schedule (MPFS), which encompasses 10,000 procedure codes. Each code is assigned resource-based relative value units (RVUs), which are designed to reflect physician work, practice expense, and malpractice expense. To adjust for local differences in cost of living, each RVU is modified using geographic practice cost indexes (GPCIs) and then converted to dollars using a “conversion factor.” This system rewards physicians who produce a high volume of services; not surprisingly, Medicare Part B expenditures have grown rapidly.

Since 1984, Medicare patients have been serviced under the prospective payment system of the Medicare program. Under this system, primary care providers are reimbursed for their services using a fixed payment for each patient that is determined by the patient’s diagnosis-related group at the time of the admission. Therefore, under the prospective payment system a hospital’s reimbursement is unaffected by the actual expenditures that are required to care for a patient.

The advantage of VBPS program is that it promotes and reimburses for all treatments that are planned to help to bring better health outcomes for Medicare patients. This program also plays a part in reducing the rate of unnecessary tests and referrals that are unrelated to treating of patients’ conditions. The program gives incentive rewards to healthcare facilities that are successful in reporting the high quality of cares and better patients’ health outcomes. It also serves as supports and guidelines for healthcare facilities to build needed infrastructures to improve their quality of services (Minemyer, 2016).

Before the Obamacare, many individuals had no medical insurance. A noted author, Amy Anderson state: “Approximated 30 million Americans were anticipated to gain health insurance through the Affordable Care Act (ACA) or Obamacare; a comprehensive healthy workforce would be needed to meet the massive demand”. (Anderson, 2014)

The Affordable Care Act (ACA) was signed on March 23, 2010 by President Barack Obama. The enactment of the ACA accounted for medical reform throughout the United States (Osmonbekov, Yordy, & Gregory, 2014). The provisions of document were all geared towards enhancing healthcare by lowering the costs, creating new consumer protections as well as improving access to care. Some of the provisions include section 2706 which establishes nondiscrimination in healthcare. Further, section 4001 provides national prevention, public health council, health promotion as well as an advisory group on prevention and integrative medical issues. The above provisions affect acupuncture practitioners in various ways.

| Prospective Payment System (PPS) first began in 1980 with a small number of hospitals partitioned into three groups according to their budget positions---breakeven, surplus, and deficit--- prior to the imposition of DRG payment (Diagnosis- related group). The PPS as DRG’s had been designed to limit the share of hospital revenues derived from the Medicare program budget, and in spite of doubtful results in New Jersey, it was decided in 1983 to impose DRG’s on hospitals nationwide.

The Affordable Care Act has drastically changed reimbursement (and subsequently patient care) for better and worse. While healthcare has become more accessible, quality of care and doctor-patient interaction has decreased. Statistically, hospitals have seen an improvement in compensation, but this doesn’t include private practice and outpatient centers. Government-run healthcare is slow healthcare, and to make up for this physicians have to work faster and longer. My mom’s work as a physical therapy assistant has her working 10-12 hour days in the off season months of summer, and my own work as a secretary at her office opened my eyes to the consolidation of providers to get better reimbursements, which leads to fewer private practices. While

“The Tax Equity and Fiscal Responsibility Act (TEFRA), signed into law September 3, 1982, mandated the development of a prospective payment methodology for Medicare reimbursement to hospitals.” http://sunlightfoundation.com/blog/2009/09/08/slug/. It changed Medicare reimbursement from a fee for service to prospective payment system. Which is where there`s a reimbursement method where`s there an amount of payment determined in advance of services being performed. The rates are done annually. Reimbursements for inpatient care by a classification scheme called diagnosis-related groups. If the patient might have to stay longer in inpatient care more than average days, the hospital may lose money on that patient.

The Inpatient Prospective Payment System is based on CMS (Medicare) standards because it is the largest reimburser. It was created to control rising healthcare costs by determining reimbursement prospectively. The costs of inpatient acute hospitals stays under Medicare Part A are fixed so that each patient case aligns with a Diagnosis Related Group (DRG).

As you mentioned, the ACA has changed the way hospitals receive reimbursements from volume to valued-based incentive system. I learned that a percentage of Medicare reimbursement will be withheld unless hospitals meet benchmark performance measures in outcomes and patient satisfaction. Healthcare analysts are emphasizing that for hospitals to achieve the quality outcomes, a focus on assuring reliable measures, use of evidence-based practice, and skill in care coordination is needed (Jeffers & Astroth, 2013). A shift in the system will require care providers to have a patient-centered focus and experience in team care delivery. Jeffers and Astroth (2013) believe that graduate preparation and an advanced nursing degree are needed to prepare

However, the quality of these services seems to need improvements as better services to patients and proper care for health will impact the revenue cycle and reimbursements. Obama-care supporters are making the false impression that new government rules would promote opposition, control costs, and advance the quality of health care delivered within Medicare. Believing that, implementing this method would concurrently regulate the growth of Medicare costs in a more rational fashion and close the gap of health care we currently have and the health we would have in our future. No matter what department is seeking insurance reimbursement, accurate documentation is required along with proper billing codes to receive timely reimbursement.

The Centers for Medicare and Medicaid’s (CMS) Value-Based Purchasing program (VBP) was implemented in 2012. This program adjusts what CMS will pay hospitals based on the quality of care hospitals give patients. The value-based purchasing is a financial incentive for hospitals to get and maintain higher patient satisfaction scores.

The reimbursement method I will be discussing is the Pay-For-Performance, which is this method that provides financial incentives to medical facilities and healthcare providers to make specific improvements and/or achieve outstanding outcomes for patients. For example physicians can receive bonuses for meeting set goals for the facility such as minimizing reoccurring preventable medical issues in certain population of patients. The CMS established 4 quality measures (process measures, outcomes measures, patient measures, and structure measures) to assess the performance of providers and medical facilities and also includes penalties for poor performance. One of the quality measures (patient measures) gives the “power” back to the consumer