Example Of A Fee-For-Service In A Home Care Company

It is essential for an administrator to understand how private and government payers impact actual reimbursement. Government payers have a standardized benefit structure. The one benefit is that registration staff have an easier time calculating payment due (copayments) for service and can set up payment arrangements. Since the most significant proportion of funds coming into a healthcare organization is usually payments from third-party payers, therefore, it is critical to know how each reimbursement affect the others that come in. Healthcare organization may have hundreds of different payer’s relationships in the form of different contracts that have their own rates of payment that are usually different from other payers for an identical

help with their life cycle. With reimbursements there are incentives for medical facilities and doctors.

What are the three main payment mechanisms managed care uses? In each mechanism who bears the risk.

The Medicaid program is jointly funded by the federal government and each individual state. To offset costs for struggling state budgets, the federal government will fully finance new enrollees in 2014, gradually reducing its contribution over time (Sederstrom, 2012). The federal government pays each state for a particular percentage of program expenditures. These expenditures are call the Federal Medical Assistance Percentage (FMAP). Per capita income, from each state, is one of the criteria that FMAP is based on. FMAP can range from 50%-75% based on the per capita incomes. Every 3 years, FMAPs are adjusted for each state to account for variations in the economy. Each state must ensure that they can fund their share of Medicaid expenses for the services and care available under their state plan. Generally, each state pays for services through managed care arrangements or fee-for-service arrangements. Each state can establish their own Medicaid provider payment rates, as long as they are within federal requirements. Under the managed care arrangements, each state has a contract with organizations to deliver care through networks and pay providers. Providers are paid on a monthly payment rate. Under a fee-for-service arrangement, each state pays providers directly for services. Payment rates may be based on the cost of providing the services, a percentage of what Medicare pays for services, and/or an assessment of what commercial

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.

An entity, public or private (other than the patient or the health care provider) that reimburses and manages health care expenses.

Single payer reimbursement is a health care financing system that “includes both the collection of money for health care and reimbursement of providers for health care costs.” In such a system, the government or a quasi public agency is the entity that bears full responsibility of collecting funds and reimbursing appropriate parties, but the provision of care remains in private hands. Through taxpayer funds, the government collects money from individuals and businesses, and then reimburses providers who delivered health care services to those individuals enrolled in the public health insurance program. (http://www.pnhp.org/facts/what-is-single-payer).

The issue that the hospital faces when a patient necessitates emergent care and is a participant of a managed care organization is the potential of not receiving payment or not being in compliance with EMTALA (Fedor & Perez, 2001). Initially, many hospitals faced many unpaid claims by managed care entities because of their inability to contact the provider for authorization for care (Fedor & Perez, 2001). CMS advised hospitals to negotiate with managed care organizations with future contracts to include a provision for authorization after the patient has received stabilizing treatment with the purpose of remaining compliant with EMTALA (Fedor & Perez, 2001). By modifying contractual agreements between managed care organizations, the hospital can provide emergent care appropriately and ensure that claims are paid by managed

Those who have Medicaid do not have to pay a monthly premium for the long-term care portion of the benefit. The PACE program pays for a portion of the monthly PACE premium and Medicare pays for the rest, for those with Medicaid (Providers & Partners, N.d.). If an individual does not have Medicaid, then the person is responsible for the portion of the monthly premium Medicaid would pay for. Those who only have Medicare will be charged a monthly premium to cover the long-term care portion of the benefit and the Medicare Part-D prescription drugs. Further, those individuals who do not have Medicare or Medicaid can join a PACE program by paying privately. In addition, the PACE program has no deductibles and copayments, which is a great incentive for qualified individuals to participate in this model of care (Shi & Singh, 2012). Overall this program has a great cost savings compared to other forms of long term care delivery systems, while providing quality health

States have chosen to two forms of Medicaid managed care to better deliver healthcare services besides the traditional fee-for-service Medicaid programs; primary case management and traditional health maintenance organizations. “In primary care case management, the state Medicaid agency contracts with a primary gatekeeper entity (e.g., physician, clinic) that coordinates primary and specialty care for Medicaid beneficiaries. For healthcare maintenance type programs, a State Medicaid agency contracts with an existing healthcare maintenance organization, prepaid health plan, or other institutional health care provider who, in addition to proving primary care services, assumes insurance risk of providing covered services. Typically primary case management are paid on a fee-for-service basis plus a monthly case management fee per enrollee, while health maintenance organization plans are paid a capitation rate and are at full financial risk.” (1)

“Reimbursement” in healthcare refers to the decision of the entity paying for an item or service (called the “payor”) of whether a particular item or service is covered by a particular healthcare payment program for the patient at issue and therefore eligible for payment. “Payors” refers to the entity through which an individual has healthcare coverage. The federal government is the largest single payor of healthcare services in the United States through a variety of federal healthcare programs such as the Medicare and Medicaid programs established under the Social Security Act (SSA).

Medicare is an insurance program. Medical bills are paid from trust funds in which deposited money people covered. It helps mainly people over 65, no matter what their income, younger people with disabilities and dialysis patients. The patients pay part of the costs through deductibles for hospital costs, among others.

There are also two other less common forms of managed care. Point-of-service organizations differ from the previous two forms because they allow their clients to choose a doctor outside of the network for a slightly higher copayment (Chitty & Black, 2007). The last type of managed care involves a hospital corporation teaming with a select group of medical staff. Their teams then negotiate with managed care organizations or self-insured employers to set fees for different services (Chitty & Black, 2007).

Understanding the classification of healthcare services in terms of acute and long term care enable us to plan for services, to describe institutions, and to allocate funding and reimbursement. In the United States, healthcare services provided by health care providers (such as doctors and hospitals) are paid for by the following including, private insurance, Government insurance programs, people themselves (personal, out-of-pocket funds). Additionally, the government directly provides some health care in government hospitals and clinics staffed by government employees. Examples are the Veteran’s Health Administration and the Indian Health Service.

Healthcare is often driven by consumers and insurance companies; there is strong pushes for insurance companies to start paying better through Patient Care Medical Homes (PCMH) or Accountable Care Organizations (ACO) rather than paying at a per-visit basis (Hamlin, 2015). With PCMH or ACOs payment is made on a continuum of care, encouraging the provider to be involved in all aspects affecting health of the patient (Derksen, & Whelan,