Finance In Healthcare Essay

Finance plays an important role in the healthcare industry. It deals with accounting and money management options (Gapenski, 2012). Finance is the evaluation of costs, expenses, revenues and investments options. Financial information will be useful with the Cs, which includes reducing costs, managing cash, acquiring capital and controlling resources (Gapenski, 2012). The healthcare industry’s finance is not well balanced when it comes to patients and reimbursement. The proper coding is vital in order to ensure prompt reimbursement for care. The major third-party payers are private insurers (Aetna), commercial insurers, self-insurers, public insurers (Medicare & Medicaid) and managed care organizations (Gapenski, 2012). The three types of

DRG, the diagnosis-related group model uses the ICD-9-CM codes to classify the groups of patients medically related by diagnosis, treatment, length of stay, age and sex. DRGs focus on patients with similar amounts of resources and similar conditions. With the DRGs, the classification is based on the diagnosis and the treatment resources (McWay, 2011). MDCs, the major diagnostic category model classifies the patients based on medical and surgical categories. The medical category is subdivided based on the primary diagnosis while the surgical theory is based on the performed surgical procedure. Because the DRG is the higher ranking of the MDC, patients with several procedures are classified by the DRG (McWay, 2011).

Because of the say “if it’s not documented, then it’s not done”, there are no excuses for incorrect or improper documentation as well. For third party payers, a miscoding could indicate that the physicians are providing the wrong or the unnecessary care services and might be considered as a rip-off. Otherwise, a miscoding could also result in a low or high reimbursement from the third party payers; and in case the reimbursement is low, it puts more stress on the patients who become liable for the remaining amount (Littlehale,