The methods of physician reimbursement in the United States
Indemnity payment is a certain fee per procedure – according to a table of allowances. They can vary among insurance plans. The provider can charge an amount above that to the patients. The table of allowances is based on a relative value scale where each procedure is rated by a point system reflecting the difficulty to determine a dollar value. There is no patient protection (Williams and Torrens, 2008).
Service benefits pay a percentage per procedure about 80% of what is considered usual and customary fees (UCR). The patient will have information on what a reasonable charge is and has some protection with that reference (Williams and Torrens, 2008).
Fixed fees are based on a contractual agreement the provider accepts with the insurance and usually no other charges can be applied for patient expense. Medicaid plans have this arrangement in many states. HMOs are fixed fees (Williams and Torrens, 2008).
Prepayment or Capitation is provided under HMO plans, in which providers are paid a "lump sum" per patient regardless of how many services the patient receives. This is usually on a monthly basis. This encourages the provider to control costs. A patient may not get the exact care they need with a cost cutting mentality being advocated. Patients with too many problems may be passed off to someone else (Williams and Torrens, 2008).
Fee-for-Service – fee is paid for service or procedure provided. Physicians would have a sliding fee scale for lower income patients. With health insurance a more regulated fee structure came along with one schedule of charges for all payers. This method rewarded the provider more closely to output services. Patients had more economic power ...
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...e a minimum premium plan allows employers to self fund claim expenses up to a predetermined amount after which an insurer policy assumes financial liability. Self insurance avoids the risk charges, administrative fees and profits paid to the insurer and rolled in to the premium. Self funding allows employers to avoid taxes assessed by states on premium income and to avoid state directives to cover certain services when they design a plan (Williams and Torrens, 2008 p. 113).
Works Cited
Medicare. n.d. Retrieved from www.mymedicare.gov
Medicare ProgramQuickOverview.n.d. Medicare Consumer Guide. Retrieved from: www.medicareconsumerguide.com/medicare.html
National Council on Aging. My Medicare Matters. n.d. Retrieved from www.mymedicarematters.org/navigator
Williams, S. and Torrens, P. (2008) Introduction to health services. Delmar Cenage.Clifton Park, NewYork.
The second payment determination base is known as fee schedule. This payment method is neither based on provider’s cost nor prov...
The purpose of financial measurement in healthcare is to provide the community with the services it needs, at a clinically acceptable level of quality, at a publicly responsive level of amenity, at the least possible cost. This is done by providing healthcare finance managers with accounting and finance information to help accomplish the purpose of the organization (Nowicki, 2015). When making accounting decisions about budgeting and inventory control, an understanding of economics, statistics, and operations research is needed. Major Financial Measures
An HMO is a integrated delivery system that combines both the delivery and financial aspects of health care for consumers. Under the HMO, each patient is appointed to a primary care physician (PCP), who is essentially accountable for the long-term care of the members that she/he has been assigned and any specialists that a patient needs to see should be referred by their PCP. Some examples of HMOs are Kaiser Permanente and Humana. HMOs are licensed at the state level, under a license that is known as a certificate of authority. A pro of an HMO is that treatment for a patient can begin prior to their insurance being authorized; A member may benefit from this because there would be little to no treatment delays.
In Medicare's traditional fee-for-service payment system, doctors and hospitals generally are paid for each test and procedure. This drives up costs by rewarding providers for doing more, even when it’s not needed. ACOs continue to utilize fee for service by creating incentives to be more efficient by offering bonuses when providers keep ...
The Bundled payment is defined as the reimbursement of health care providers on the basis of expected costs for clinically defined episodes of care. It has been considered as a middle ground between fee for service reimbursement and capitation system. Bundled payment has been proposed in health care reforms in the United States as a strategy for reducing health care costs, especially during the Obama administration (Mechanic & Altman 2009). While federal and state health care laws make bundled payments difficult to structure and implement, both the Medicare program and commercial payers have embraced bundled payments as a means for reducing costs, and many providers view bundled payments as an effective market strategy and a gateway to population management and more complex value-based payment arrangements (Moeller & Evans 2010).
In order to make ones’ health care coverage more affordable, the nation needs to address the continually increasing medical care costs. Approximately more than one-sixth of the United States economy is devoted to health care spending, such as: soaring prices for medical services, costly prescription drugs, newly advanced medical technology, and even unhealthy lifestyles. Our system is spending approximately $2.7 trillion annually on health care. According to experts, it is estimated that approximately 20%-30% of that spending (approx. $800 billion a year) appears to go towards wasteful, redundant, or even inefficient care.
Each procedure performed by a doctor or other health care provider has a code attached to it that allows them to bill the insurance payer, whether private, Medicare, or Medicaid. That code is called a CPT code, which stands for Current Procedural Terminology. When a provider send a CPT code to an insurance payer, that CPT code determines how much he or she will be paid. Different codes correspond to different procedures or services and can have higher or lower costs. As long as the provider uses the correct code, then the provider is paid based on the services and procedures performed. When a provider upcodes,
Managed care plans present as forms of health insurance covers. These plans have contracts with medical facilities and health care providers to offer care for clients at decreased costs (Dixon, Greene & Hibbard, 2008). This paper will discuss the criticisms that have been addressed regarding managed care, and the different features that are included in a CDHP. Additionally, it will discuss the existing differences between the choice of providers, cost sharing, and covered benefits of HMOs and CDHPs. This will help in drawing conclusions regarding the latest information that surrounds managed care.
There is no doubt that healthcare cost are rising out of control. No one likes the
2. The twin problems of the health care industry as viewed by society are cost and access. First of all, the cost of getting health care is very high and it is getting higher each day. This has been mostly caused by the combination of high cost and an increase in quantity of services provided to the communities. The other problem involves access to health care. American enjoy limited or no access to health care. Many efforts have been done to reform this, but still but still many people are left without access to the care. These two problems are related due to the fact that if the health care industry gets to high off course people no longer will be able to have any access to it. The higher prices are, the lower access people have to it.
Healthcare Reimbursement is the financial payment to the provider for meeting face to face with an patient at his/her facility. In order to determine the financial obligation due to the physician for seeing a patient is determined by a number of factors; all of which, should be documented on the patient's medical record. To achieve the maximum reimbursement it is crucial to chart efficiently, documenting completely, scheduling patients and procedures appropriately, utilization of ICD-10, CPT and E/M codes, claims filing and other important factors in receiving the maximum healthcare reimbursement for services provided.
The balance between quality patient care and medical necessity is a top priority and the main concern of many of the healthcare organizations today. Due to the rising cost of healthcare, there has been a change in the focus of reimbursement strategies that are affecting the delivery of patient care. This shift from a fee-for-service towards a value-based system creates a challenge that has shifted many providers’ focus more directly on their revenue. As a result, organizations are forced to take a hard look at the cost of services they are providing patients and then determining if the services and level of care are appropriate for the prescribed patient care.
Managed care is simply a system that delivers health care to a specific population purchased through health insurance plans. Practitioners and providers manage the use of health care services and cost by providing effective diagnosis and treatment, appropriate use of inpatient and outpatients facilities, population-based planning, health promotion and education, and disease prevention. Managed care uses a “gatekeeper” system, where patients or beneficiaries are assigned a Primary Care Physician (PCP), who they see initially for all medical care. The PCP acts as a gatekeeper by initiating referrals to specialists when required and approving inpatient admissions. Managed care was seen across communities in America as early as the 19th century and by 1938, Henry Kaiser had adopted a pre-paid medical plan for his employees. During World War II Kaiser used pre-paid medical programs for his workers and after the war he opened these plans to the public, which became the Kaiser Permanente we know today. Pre-paid healthcare and Health Maintenance Organizations (HMOs) came into full use in the 1970’s when the federal government established grants and loans as part of a health care strategy to provide care for uninsured Americans by increasing the number of HMO, increasing enrollment, and containing the cost of healthcare. Since the 70’s employers have used managed care as a form of high quality low cost insurance for their employees and the federal government has turned to managed care for both Medicare and Medicaid programs.
...fe insurance, where the patient should decide how much of the money should be left for the beneficiaries. Since price variance is high fee for service would be the most ideal reimbursement model.
Among them is its emphasis on productivity. Fee for service encourages the delivery of care and maximizing patient visits. As a payment mechanism, it is relatively flexible in that it can be used regardless of the size or organizational structure of a physician’s practice, the type of care provided such in clinic visit, surgery, therapy session, and the place of service such as physician’s office, nursing home, hospital, surgery center or the geographical location of care. Fee for service does support accountability for patient care, but it is often limited to the scope of the service a particular physician provides at any point in time. Although fee for service is easy to understand conceptually, it can be difficult to understand in practice. Patients may struggle to decipher the coding and nomenclature involved in billing, manage the numerous bills and explanations of benefits they might receive, and understand its application in inpatient settings, especially for lab, radiology, and anesthesia services. Because payment is limited to one provider for one interaction, fee for service does little to encourage management of care across settings and among multiple