Reimbursement Model

In my role with Liberty Mutual, I drove adoption of Medicare reimbursement models through public affairs involvement with multiple state workers' compensation committees seeking to update their reimbursement schedules in response to the implementation of ICD-10 coding requirements in October of 2015. With the state workers’ compensation authorities seeking to adopt CMS reimbursement type models, my involvement was directed at securing the inclusion of specific CMS rules governing correct coding and reimbursement practices including National Correct Coding Initiative Guidelines (NCCI), Medical Unlikely Edits (MUE), along with the Resource Based Relative Value System (RBRVS) for reimbursement rate setting.

Fee -for-service is the most traditional form of reimbursement, pretty much like a restaurant bill, you pay for what you order. “A physician may be paid for each procedure performed, such as an office visit or the reading of a CT scan”. (Gapenski, 2013, p. 66) There are three primary fee-for-service payment methods: cost based, charged based, and prospective payment. In the fee-for-service reimbursement model the physician is to serve the patient to receive their payment.

“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.

Revenue determination is an important tool for health care organizations because it allows for efficient management of payment systems. This paper will look at the different components that form the payment-determination bases of revenue determination. Moreover, the difference between specific and bundled service payments will be discussed. Lastly, the three ways health care providers control their revenue function will be highlighted.

Fee for service is a payment model where services are paid for separately, in health care, as opposed to bundeling them. It gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care.

This policy is designed to assist employees in reporting expenses incurred while conducting QB Medical, Inc. business activities.

managed care grew more in the last years, bringing about new types of managed care plans through competing MCOs. To make their plans more attractive, organizations used payment variations. For instance, instead of capitation, PPOs used discounted fees payment. There were ones that offered enrollees choices between affiliated providers and non-affiliated providers. MCOs also adopted various methods to control health care costs by actively monitoring utilization (Shi, Singh, 2017). Additionally, private health insurance, as well as high deductible health plans, can be offered as managed care plans nowadays. Also, available to Medicare and Medicaid recipients is the option to enroll in a managed care plan or continuing to stay with the traditional fee-for service program. Now for specific services HMOs incorporates capitation and fee-for-service reimbursement, in their payment schemes.

I too find myself thinking about the non-compliant patient and how they will impact our reimbursement. For so long the mindset of many Americans has been, we can do what we want and the doctor will fix it or give me a pill. There has been no sense of accountability for personal health among a large portion of the population.

Healthcare in the United States has evolved over the years. The overall goal is to optimize how physicians, hospitals, and other care providers are remunerated focusing on high quality of care provided at lower costs. Currently there two various payment modes for healthcare providers, fee for service and capitated systems. Fee for Service (FFS) modes allow for payment to be made as the service is provided. Under the capitated system, a fixed payment is made in advance and when the patient seeks care, the healthcare provider provides all the services. These models have both advantages and disadvantages. FFS model will be the focus of this paper.

The concept of provider reimbursement is to make sure payments are being made for the services rendered that are process by the insurance companies or by the third party to a beneficiary, Reimbursement happens when an approved healthcare physician or facility offers medical care to an insured party, this can help the patient because they won’t have to pay up front for the services instead a claim will be submitted to the patients insurance plan. The healthcare provider is going to verify the insurance to make sure the patient is cover for the procedures that way the insurance company can reimbursed directly, but in some cases if the patient insurance don’t cover the procedure the patient can make payment arrangements. The reason why reimbursement is necessary is because the provider of facility must recoup all or some parts of the medical charges. The different methods of financing for healthcare are for For Profit, Not-For-Profit and Public health. For Profit is an organization that is made to make money and they are expected to bring more revenue than needed. Not-For- Profit is an organization made to reinvest excess revenue into the organization not like For Profit they have to reinvest the money back to the facility when For Profit may pay out profits to investors, and the other financial method is public health care facilities this organization is established by the government operated by a local, state, or federal government, they are supported by tax dollars, and

Fee-for-service plan is where everything is billed separately and not bundled. This plan give physicians the option to be able to give patients more treatments since the payment depends on the quantity of care, rather than the quality of care.

This rewards quantity over quality. Fee for service does nothing to promote low cost, high value services, such as preventive care or patient education even if they could considerably enhance patients’ physical condition and reduce health care costs through the system. 78% of employer sponsored health insurance is was fee for service. Reimbursement is the form of payment for services provided. The most common practice is the insurance company pays to the provider directly. Under the MCO when receiving care the patient is usually required to pay a small amount out of pocket such as 15 or 20 dollars and the rest is picked up by the managed care plan.

The health system in the United States is “broken” in a sense of providing all Americans with healthcare insurance. The system is very complex and fragmented which can be contributed to the lack of one governing body. Health care policy is largely driven by financing, insurance mechanisms, Medicare and Medicaid (Williams & Torrens, 2008). The understand complexity of the system can explain why there is not an “easy solution” of the current state of the healthcare system. Health care has evolved from a quantity to quality based system. Providers are being held accountable for the quality of services offered to patients to improve patient outcomes and decrease health care costs. The revised payment model requires providers and facilities to

The traditional methods of paying for healthcare services use to involve paying for services out of pocket. The gradual transition from fee- for- service payment to managed healthcare is not a recent phenomenon. With the increasing costs of healthcare services, there was an increased interest in moving payment from fee-for-service into a more organized payment structure. This paper discusses the three payment types in the healthcare industry used by practicing physicians: fee for service, bundled service arrangements, and capitation arrangement. It also addresses the best current method as well as future reimbursement methods. The

Under FFS payment system, each service is unbundled and paid for separately. Fee-for-service generates payments driven by the volume of services produced. The service providers, usually a physician, receives a set fee for a particular service, such as office visit, test, procedure, or other health care service, either directly from the patient or from an insurer or other payers.