NUR 621 Healthcare Reimbursement Training

Sample Answer

Introduction

Healthcare reimbursements involved paying hospitals, diagnostic facility, health providers and other healthcare organization for the services they have offered, especially the medical services offered to clients (Chen et al.,2020).

Over the years, healthcare reimbursement in USA has evolved, and today, several reimbursement models exist. In some cases, the payer cover all the costs for the care services offered to patients while in other cases, patients are required to cover for part of the services offered.

In addition, in cases where a patient lacks a health insurance, then they are usually required to cover all the costs. This presentation will focus on healthcare reimbursement.

Medicare Reimbursement

Medicare reimbursement is one of the models which have been used in the USA. It is usually for people of 65 years and above. However, it can also be used in covering specific cases for people below that age, for instance with disabilities. The program has fur main parts, parts A, B, C and D. part A is also known as hospital insurance while part B is known as medical insurance (DeCherrie et al.,2021).

Part A helps in covering different services such as inpatient hospital care, skilled nursing facilities, hospice care and home health services. Comparatively, part B covers outpatient services, physician services and durable medical equipment. Part C is also known as Medicare advantage and is offered by private insurance companies approved by Medicare. The Part D covers prescription drugs through private insurance plans.

The parts of the Medicare direct the reimbursement process. For part A, the healthcare organizations which offer the services get reimburses through a prospective payment system. The system involves reception of a fixed amount of specific services given without taking into account the actual costs.

Comparatively, the fee-for-service is used in the Medicare part B. This approach entails fee schedule setting which then means that the healthcare entities get paid based on the services which they have given as guided by deductibles and coinsurance (Sen & Deokor, 2021).

Part C is based on capitated payments, implying that the government pays an amount to the private insurance on behalf of a beneficiary. Part D entails combining the beneficiary premiums and government subsidies where the government subsidizes the drug costs.

Medicaid Reimbursement

Apart from the Medicare reimbursement, Medicaid has also been used. Medicaid reimbursement refers to a joint federal and stated program which offers health insurance to people from low income families or individuals with economically disadvantaged backgrounds and low incomes. While Medicare is straightforward and easy to understand, the Medicaid has for decades described as complex (Mitchell et al.,2023).

This reimbursement is not uniform, but may vary from one state to the next. The federal government is responsible for setting rules which need to be followed by various states, none the less, states can come with eligibility criteria, benefits and rates.

Medicaid reimbursement model covers different services such as hospital care, physician services, prescription medication, long-term care and mental health services. Medicaid reimbursement uses different reimbursement strategies. Among the approaches is Free-for-Services which involves the healthcare providers billing Medicaid for each of the services they give, and the rates involved differ from one state to the next, however, the rates are lower that payments made by private insurers.

Medicaid also uses managed care. Managed care is based on a fixed monthly payment per individual. The state negotiated contracts with the managed care organizations to determine the reimbursement rates (Lin et al.,2020).

Another strategy is the intergovernmental transfer and upper payment limit which involve funds transfer between state and local governments. Upper payment limits entails a cap on the amount of money which states can claim. Disproportionate share hospital payment are used to offset uncompensated care costs.

Private Insurance Reimbursement

Apart from the Medicaid and Medicare, there is also private insurance reimbursement models which entail private insurance companies. The companies pay the healthcare providers on behalf of their members for the services they receive. The private insurance can take the form of employer-sponsored group, individual or family plans.

Just like in Medicare and Medicare, private insurance also uses approaches such as Free-for-Services which involves billing the insurance entities for the services offered (Xu et al.,2020). It also uses the capitation model where the providers get a fixed monthly payment for the patients regardless of the services offered to the patients.

Cost, Charge and Payment

The reimbursement for services offered by various healthcare entities require that the player involve understand payment, charge and cost. All these three terms are vital in the reimbursement process, and even though they are usually used together, they are different from each other.

Cost refers to the actual expense that a healthcare provider incurs in giving health and medical services to patients (Mitchell et al.,2023). They may be inform of overhead costs, costs used for facilities and supplies and costs incurred in purchasing equipment. It is also worth noting that costs can either be variable or fixed.

The information offered by cost aspects can be used by the providers when carrying out different activities such as allocation of resources, pricing and in exploring the sustainability options. Charge is another term used in healthcare reimbursement.

Charge refers to the amount which a healthcare provider bills a patient or an insurance company upon provision of healthcare services. Charges are dictated by nature of services which have been offered, which may also differ from one organization to another. Charge is also heavily impacted by a hospital’s pricing policy and pricing strategy, and in some cases, the facility’s geographical location (Mitchell et al.,2023).

In most cases, the charges are non-negotiable and the responsible payer is expected to pay it as it is. It also comes after healthcare providers or organizations have offered the services required by patients or a patient.
Payment is different from charge and costs. In the context of healthcare reimbursement, payment refers to the actual amount of money given to a healthcare provider.

This money can either be given by an insurance company or a patient. The payment can vary in different situations. For example, the payments made by an individual or an insurance company can either be lower, equal to or more than the charges billed (Sen & Deokar, 2021).

Another factor which may impact or influence payment is the environment, for example, getting services out of the network providers, which may mean that the patient has to cover a bigger percentage of the total costs. Payment may also be influenced by the patient agreements such as copayments, deductibles and coinsurance. Negotiations can also change the amount of payments, with negotiations usually leading to lower payments.

Diagnostic Related Groups

Diagnostic related group is the classification system used to categorize and reimburse inpatient services provided by healthcare entities. The reimbursement is dictated by different factors such as the age of the patient, the kind of procedure performed, and the nature of the diagnosis. The classifications is usually to standardize payment of services given (Maryati et al.,2021).

Therefore, the focus is to ensure that there is fair and consistent reimbursements. The diagnostic related groups function through the classification of the inpatient hospital admissions into different groups, where the groups are assigned particular codes aligning to specific payment rates.

The implication is that healthcare entities get predetermined payment for each patient based on the assigned diagnostic related groups without taking into account the actual costs used when offering the patient services.

Examples of Diagnostic Related Groups

This section focuses on example diagnostic related groups. One of the examples is the DRG 292 (heart failure and shock with major complications or comorbidities. It entails patients with severe heart failure or shock conditions accompanied by major comorbidities or complications and requiring intensive medical management.

The other example is DRG 177 ( Respiratory infections and inflammations with major complications or comorbidities. It is for patient with severe respiratory infections or inflammations like severe pneumonia or bronchitis, with a major comorbidity or complications

Insurance Reimbursement and Private Pay Patients

Health insurance entities, whether private or public play a significant role in the payment of healthcare services offered to patients by different organizations. However, there are individuals who do not have health insurance from private or public entities, implying that, in case they get treatment services from healthcare providers, then they have to pay for the services from their pocket.

Insurance reimbursement impact private pay patients in various ways (Mariotto et al.,2020). One of the impacts is in the form of direct costs. Such individuals may need to pay higher out of pocket charges due to the higher costs negotiated by the insurance companies. The implication is that the healthcare providers have to bill them directly to pay the full amounts, which lead to higher out of pocket payments. They may also have reduced access to care since providers may prefer those with medical insurance covers.

References

• Chen, H. C., Cates, T., Taylor, M., & Cates, C. (2020). Improving the US hospital reimbursement how patient satisfaction in HCAHPS reflects lower readmission. International Journal of Health Care Quality Assurance, 33(4/5), 333-344. https //doi.org/10.1108/IJHCQA-03-2019-0066
  
• DeCherrie, L. V., Wardlow, L., Ornstein, K. A., Crowley, C., Lubetsky, S., Stuck, A. R., & Siu, A. L. (2021). Hospital at home services an inventory of fee‐for‐service payments to inform Medicare reimbursement. Journal of the American Geriatrics Society, 69(7), 1982-1992. https //doi.org/10.1111/jgs.17140
  
• Lin, J. C., Kavousi, Y., Sullivan, B., & Stevens, C. (2020). Analysis of outpatient telemedicine reimbursement in an integrated healthcare system. Annals of Vascular Surgery, 65, 100-106. https //doi.org/10.1016/j.avsg.2019.10.069
  Mariotto, A. B., Enewold, L., Zhao, J., Zeruto, C. A., & Yabroff, K. R. (2020).
• Medical care costs associated with cancer survivorship in the United States. Cancer Epidemiology, Biomarkers & Prevention, 29(7), 1304-1312. https //doi.org/10.1158/1055-9965.EPI-19-1534
  
• Maryati, W., Yuliani, N., Susanto, A., Wannay, A. O., & Justika, A. I. (2021). Reduced hospital revenue due to error code diagnosis in the implementation of INA-CBGs. Int. J. Public Health Sci.(IJPHS), 10, 354. DOI 10.11591/ijphs.v10i2.20690
  
• Mitchell, A., Baumrucker, E. P., Colello, K. J., Napili, A., Binder, C., & Braun, S. K. (2023). Medicaid An Overview. Congressional Research Service (CRS) Reports and Issue Briefs, NA-NA.
  Sen, S., & Deokar, A. V. (2021). Discovering healthcare provider behavior patterns through the lens of Medicare excess charge. BMC Health Services Research, 21, 1-18. Doi 10.1186/s12913-020-05876-1
  
• Xu, H., & Intrator, O. (2020). Medicaid long-term care policies and rates of nursing home successful discharge to community. Journal of the American Medical Directors Association, 21(2), 248-253. https //doi.org/10.1016/j.jamda.2019.01.153