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The concept of managed care health services
Cost containment in health care, research
Cost containment efforts in the US healthcare delivery system
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This paper presents an interpretation of payment reimbursement systems in the health care industry. Managed care is a health care delivery system that is organized to manage quality and cost utilization. A comparative overview and description of payment compensation will be given in order to understand the flow of finances in the health care industry. The focus will be on the capitation and fee-for-service reimbursement systems. Readers will then be able to conclude that the appropriate reimbursement method is reliant on upon the amount of risk a party is able to assume.
Managed care in the hospital reimbursement is a system of healthcare delivery that aims to provide a generalized structure and focus managing the use access cost quality and
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Reimbursement programs are a part of the United States health care system and they represent a financial tool for providing cash flow to service physicians and hospitals. Often times, the competency to provide quality health care is to be contingent on the payment for the services given by physicians and hospitals. Physicians that take part in the managed care systems are reimbursed by several different methods for their services. The two most common methods are Fee-For-Service or Capitation. Managed health care has grown considerably within the health care industry and Physicians have faced several challenges in establishing and financing payment systems for services. On the daily in the news you will see or hear about the financial savings resulting from managed health care as well as the restrictions on patient freedom. Insurance risk seems to be one of the less talked about concerns in the movement toward providing health care and professionals often ponder about who should bear the risk of insurance fees. For providers reimbursement is an essential portion of the managed care system. In order for them to receive their incentives to provide that efficient quality care they need to be reimbursed …show more content…
This is used in our office on patients that have had surgery, they are covered for 90days post op. unless their insurance says deems that they have a copay for x-rays.
Contact capitation- is similar to the capitation model, but has added structure where the physician is paid a set fee for initial visit and then they are responsible for follow up care for a period of 6-12 months. If they patient decides to go elsewhere for services then that provider will lose payment.
Physician DRG – this is a reimbursement method where the physician is paid on a diagnosis related group. Which is under development for many hospitals to be paid the same way. Hospitals receive the saving when they are able to make the hospital length of stay less, and the same goes for the physician, if they are able to provide more efficient care to the patient.
Fee incentive methodology- a flat fee method to set a change in the physician’s behaviors of treatment. This method urges physicians to work in a manner that is more for the patient and does not affect the
The IPPS or the inpatient prospective payment system refers to a system of payment which includes the diagnosis-related groups’ cases as acute care hospital inpatients. This system is based on resources which are utilized when treating Medicare recipients belonging to these groups. Each diagnosis-related group (DRG) comprise of a payment weight. The IPPS serves an integral role when it comes to deciding the overall hospital costs of all the devices used to treat the patient in within a specific inpatient stay.
Payment basis is known as the methods used by the one making payments for services provided by hospitals or doctors. There are three payment determination bases. First, cost-payment basis is a method for determining fees for medical services, and is basically the underlying method for payment is the provider’s cost. The exact amount is determined and agreed upon by both the provider and the patient. For example, the healthcare provider’s cost for providing the service could be $2,000. The healthcare provider can then choose to charge 70% of the total charge, which comes out to be $1500. There are different levels that can be used in cost based reimbursement. On the macro basis, payment can be provided for a whole array of services. Contrarily, payments for specific items are on a micro basis. Critical access hospitals usually use macro level cost reimbursement. On the other hand, healthcare providers often use micro level cost reimbursement when charging for expensive medications, meaning that the price of those medications will be based differently than their usual services (Abbey, 2012).
With the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has initiated reimbursement based off of patient satisfaction scores (Murphy, 2014). In fact, “CMS plans to base 30% of hospitals ' scores under the value-based purchasing initiative on patient responses to the Hospital Consumer Assessment of Healthcare Providers and Systems survey, or HCAHPS, which measures patient satisfaction” (Daly, 2011, p. 30). Consequently, a hospital’s HCAHPS score could influence 1% of a Medicare’s hospital reimbursement, which could cost between $500,000 and $850,000, depending on the organization (Murphy, 2014).
What is managed care? According to the Oxford English Dictionary, managed care is “a system of health care in which patients agree to visit only certain doctors and hospitals, and in which the cost of treatment is monitored by a managing company.” Managed care is a variety of techniques designed to reduce the cost of providing health benefits and advance the quality of care. In the United States alone, there are various managed care programs, that are ranged from more restrictive to less restrictive. As stated in the National Institutes of Health, the future of managed care is uncertain. It is enthralling to note that in spite of the advances in healthcare systems, such as our hospital’s ability to provide patients with lower cost, managed
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 ...
Healthcare payers agree with the idea of Evidence-Based Medicine (EBM) to advocate for pay-for-performance in provider reimbursement on quality and efficiency. The fundamental system that most payers use to compensate physicians and provider associations embodies enticements for excellence and efficiency. Reimbursement can be affected by the P4P approach and other factors such as the claims process, out-of-network payments, legislation, audits and denials. While the same P4P approaches are attempts to commence incentives and new strategies into the healthcare, the underlying arrangement of the compensation system produces many per...
When one examines managed health care and the hospitals that provide the care, a degree of variation is found in the treatment and care of their patients. This variation can be between hospitals or even between physicians within a health care network. For managed care companies the variation may be beneficial. This may provide them with opportunities to save money when it comes to paying for their policy holder’s care, however this large variation may also be detrimental to the insurance company. This would fall into the category of management of utilization, if hospitals and managed care organizations can control treatment utilization, they can control premium costs for both themselves and their customers (Rodwin 1996). If health care organizations can implement prevention as a way to warrant good health with their consumers, insurance companies can also illuminate unnecessary health care. These are just a few examples of how the health care industry can help benefit their patients, but that does not mean every issue involving physician over utilization or quality of care is erased because there is a management mechanism set in place.
FFS is an arrangement under which a health care provide renders treatment or tests to a patient in return for payment. This system encourages physicians and other providers to provide unnecessary services by rewarding volume and intensity of service; the outcome of the FFS system is to increase profits for providers. Because of this volume based arrangement, the FFS model is widely seen as an
Hoffman, G., & Jones, D. (1993). Prebilling DRG training can increase hospital reimbursement. Healthcare Financial Management: Journal Of The Healthcare Financial Management Association, 47(9), 58.
doctors that are available to cover for each other. However, there are some negative aspects to
Managed care reimbursement models have contributed to risk avoidance by negotiating discounts, discouraging use, and denying payments for charges that appear to be false. Health care reform has increased awareness to the quality of care providers give, thus shifting the responsibility onto the provider to provide quality care or else be forced to receive reduced reimbursements (Buff & Terrell,
In recent times, healthcare organization across the nation are facing unprecedented challenges as they strive to improve the overall quality of care provided to their patient’s population, while improving their organization’s financial performance. Furthermore, uncertainty of new reimbursement models, diminishing reimbursement, and complicated compliance regulations are playing the role of a catalyst for streamlining the Chargemaster process in majority of healthcare organizations.
In 1983, the Medicare prospective payment program was implemented, which allowed hospitals to be reimbursed a set payment based on the patient’s diagnosis, or Diagnosis Related Groups (DRG), regardless of what treatment was provided or how long the patient was hospitalized (Jacob & Cherry, 2007).... ... middle of paper ... ... Case Management Related to Other Nursing Care Delivery Models.
There are several factors that contribute to the complexity of the revenue cycle. Frequent changes in contracts with payers, legislative mandates, and managed care are just a few examples of reasons why revenue cycle in the healthcare industry is so complex. Furthermore, the problems that arise in the steps of the revenue cycle further complicate the whole process. For example, going through the steps of the revenue cycle efficiently is extremely difficult when it is managed by poorly trained personnel. Furthermore, if a healthcare provider does not have the proper information system to track patient records and billing, receiving reimbursement can become difficult. In addition, one of the main factors that delay payments is denial from the insurance companies. The reason for Denial includes incorrect coding, the certain sequence of care and medical necessity or even delay in submitting claims. Lastly, inefficient patient correspondence can not only hinder the process of revenue cycle but also result in many patient complaints (Wolper, 2004).
reimbursement determinations. As a result, the camaraderie among physicians has developed into a more aggressive approach to impede competition (Shi & Singh, 2012). Little information is shared with patients in regards to procedures or disease control. The subjects are forced to rely on the internet for enlightenment on the scope of their illnesses (Shi & Singh, 2012). Furthermore, the U.S. health care system fails to provide adequate knowledge on billing strategies for operations and other medical practices. The cost in a free system is based on supply and demand and is known in advance of hospital admission (Shi & Singh, 2012). The need for new technology is another characteristic that is of interest when considering the health care system. Technology is often v...