Provider payment is an essential part of the health care industry and although there are a number of payment models throughout the system the most common or talked about methods are the fee-for-service and capitation payment models. As with all payment models, there are a number of advantages and disadvantages to the payer, the provider and the consumer. This paper will primarily act to define each model and explore their advantages and disadvantages. Kongstvedt notes that the distinction between reimbursement and payment is important in the health care industry. He writes “reimbursement is applied to everyone in the same way… payment on the other hand has far less implications of fairness or equity” (2013). Essentially, this means that …show more content…
physicians are paid for the services in which they provide and thus the payment in which they receive is not consistent across the system and not every physician is paid the same price for the services that they provide. When it comes to payment models across the healthcare industry, there are more than seven methods used between payors and providers. The most common methods are fee-for-service (FFS) and capitation. The Fee-for-service (FFS) model is defined as a payment structure in which physicians and other health care providers are paid for each service performed (healthcare.gov). Such services include, but are not limited to office visits, and ancillary testing. Capitation, as defined by the American Medical Association, is a model based on the payment per person, rather than a payment per service (2016). Essentially this type of payment structure refers patients to specific facilities for services in order to reduce the cost of care to the payor and the consumer. Analysis With each payment model, there are a number of strengths and weaknesses (advantages and disadvantages), as well as opportunities and threats to the system.
As with all payor systems understanding and acknowledging both advantages and disadvantages help to provide a well-informed decision on which payment method works best for the facility and its primary consumers. Fee-for-service health insurance provides its members with an unlimited amount of choice. In addition to this, this payor system allows for its members to have direct access to care, with little to no wait times to see providers. As with many indemnity plans, consumers are able to pick and choose where they receive care without requiring a referral from a primary care provider, thus avoiding the gatekeeper system. With such a system, both the health care consumer and the provider (physician) benefits from the transaction. Consumers are able to receive the care they need when they need it and are also able to receive said care from whichever facility/provider they prefer. On the provide side, physicians are able to bill based on procedural services, which allows them autonomy over which patients they see and how much they get paid for the services they provide. An additional advantage of the plan is the accuracy of services billed provided by the physician. The disadvantages to this payor model include but are not limited to, the cost of FFS plans, the amount of paperwork required by the provider, the medical services provided by the plan, and the physicians ability to manipulate the system.
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Chapter 6 describes revenue determination. Write a 3-4 page paper to include: List and discuss the three payment-determination bases. Explain the difference between a “specific services” payment unit compared to a “bundled services” payment unit. Describe the three major ways that health care providers can control their revenue function. I expect at least 5 secondary sources properly cited and referenced for this paper.
It is generally accepted that the method of payment to physicians affect their professional attitude and behaviour. Consequently, health policy makers manipulate payment system in an attempt to achieve optimal health care for their citizens such as improve accessibility, quality of care, patient’s satisfaction and cost containment. In Ontario, there are a wide range of mechanisms that are used to pay physicians for their services that are funded by both federal and provincial government. According to Canada Health Act annual report (2013), the majority of primary healthcare physicians are funded using the fee for service payment arrangement but of that majority, only less than 30% are compensated exclusively according the fee for service plan. The remaining physicians are funded using one of the following mixed compensation models:
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,
The chargemaster is an integral element of the revenue cycle. It is used in generating charges for services that are rendered to patients in real time, the absence of functioning chargemaster can result in potential collapse of the revenue cycle. Hence, the process to optimize revenue cycle must include optimizing the chargemaster and all services that is associated with it. The negative consequences of nonfunctioning chargemaster can include excessive payment/overcharging, inaccurate billing to patients; and can result in stiff penalties and fines (Bielby et al,
Fee-For-Service or Traditional Indemnity plans are uncommon but still used. Payment is rendered for services provided. Traditional Indemnity plans in general have no provider network and a patient can see a specialist without a referral. If a patient uses an FFS plan, the patient would pay the provider for medical care provided. If the medical care provided is covered by the plan. The insurance company would then reimburse the patient according to the guidelines stated in the policy or the UCR’s “Usual, Customary, and Reasonable Fees.” (“Private-Fee-For-Service Plans,” CMS.gov, 3/16/2012). Key benefits of a Traditional Indemnity or Fee-for-Service plan include no in network physicians or health care providers and the patient may see any physician or seek health care services at any healthcare facility. The patient or client can also seek treatment from a specialist without a physician referral. Fee-for-Service plans are the most flexible plans for choosing a healthcare provider and health care facility. However, Traditional
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 ...
Pay-for-performance (P4P) is the compensation representation that compensates healthcare contributors for accomplishing pre-authorized objectives for the delivery of quality health care assistance by economic incentives. P4P is increasingly put into practice in the healthcare structure to support quality enhancements in healthcare systems. Thus, pay-for-performance can be seen as a means of attaching financial incentives to the main objectives of clinical care. However, reimbursement is a managed care payment by a third party to a beneficiary, hospital or other health care providers for services rendered to an insured or beneficiary. This paper discusses how reimbursement can be affected by the pay-for-performance approach and how system cost reductions impact the quality and efficiency of healthcare. In addition, it also addresses how pay-for-performance affects different healthcare providers and their customers. Finally, there will also be a discussion on the effects pay-for-performance will have on the future of healthcare.
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).
The fourth key point is payment models. In order to make sure quality health care is given across the board you have to follow the money. In this section it talks about an idea of restructuring the payment scheme. Using bundled payments “offer the potential for promoting equity by redirecting resources to health care values...
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
retrospect to its governing authority (Shi & Singh, 2012). However, private and public agencies are the controlling constituent in today’s business. Free markets allow patients to choose providers without the prior approval of insurance companies. The current system offers a proposed plan of limited physicians in exchange for payment of services. Because the potential has been given to the payers, they regulate the cost of services rendered through contractual
From the hospital perspective mandating the health insurance will reduce the problem of Free riders into the Hospital and if a person who is insured visits the hospital for the treatment the cost of his medical treatment will not be totally absorbed by the hospital if the person is unable to pay for the treatment and the amount will be shared between the hospital and the insurance company.
...re written-off and the expenses passed on to future patients, most commonly those who are insured. While there has not been an agreed upon solution in regards to solving the problem of the uninsured in our nation, most everyone agrees that the problem needs to be addressed. Everyone deserves access to proper medical care at a reasonable rate.
Fee-For-Service (FFS) is a payment model where services are unbundled and paid for separately. In health care, it gives an incentive for physicians to provide more treatments because payment is dependent on the quantity of care, rather than quality of care. Similarly, when patients are shielded from paying cost sharing by health insurance coverage, they are incentivized to welcome any medical service that might do some good. FFS is the dominant physician payment method in the United States, it raises costs, discourages the efficiencies of integrated care, and a variety of reform efforts have been attempted, recommended, or initiated to reduce its influence.
According to the laws and regulations of Medicaid, people who cannot afford health insurance get covered by other higher classes’ taxes. This creates an imbalance because it says, if