Journal 8
Running head: FINANCIAL PRINCIPLES AND REIMBURSEMENT 1
FINANCIAL PRINCIPLES AND REIMBURSEMENT 2
Financial Principles and Reimbursement
Luz Rodriguez
Southern New Hampshire University
Reimbursement Strategies
A case rate is a fee paid for medical services based on the patient’s characteristics. When a case rate is applied, the healthcare provider or the hospital covers every service a patient needs for a specified period (irmi.com). Management utilization, on the contrary, refers to the assessment of the medical efficiency, suitability, and necessity of the use of healthcare facilities, processes, and services under the requirements of the appropriate health benefit plan (apta.org). In simple terms, management utilization is a strategy utilized by payers to regulate the use of resources within hospitals and physician offices to keep healthcare expenses down.
Both case rate and management utilization affect pay-for-performance initiatives. When a case rate is applied, the healthcare provider covers every service the patient needs for a specified period no matter what healthcare service they offer. This can impact pay for performance initiatives. The implementation of management utilization strategy to ensure patients are getting the right care at the right time will make sure that healthcare facilities are delivering suitable and worthwhile care, which means that the pay-for-performance initiatives may increase.
Reimbursement Methods
|
Reimbursement Methods |
Advantages for Strategic Planning of operational performance |
Disadvantages for Strategic planning of operational performance |
Best Use(Type of Facility and Why) |
|
Fee-for-service (FFS) |
With FFS, doctors can charge a realistic amount for a plan and can be flexible to provide precise help to their clients. |
Fee for service can lead to an increase in the overall medical costs over time since providers and patients are not financially accountable (Nehk, 2018). |
FFC usually encourage fragmentation and over-utilization, where patients and physicians are shielded from the financial implications of needless hospital visits and services. Thus, the method will be best in facilities with strict supervision from the government and insurance companies. |
|
Bundled Payments |
With bundled payments, there is easiness in billing logistics. |
However, bundled payments might create obstacles to client’s choice of provider or/and geographic preferences (medicalbillersandcoders.com). |
Bundled payment will be best for facilities that discourage unnecessary care. Bundled payment enhances care quality, reduces healthcare costs, and manage huge healthcare expenses. |
Financial Management Principles
|
Financial Management Principle |
How It Is Used to Evaluate Operational Performance |
|
Benchmarking of Industry Standard |
Healthcare facilities can take certain performance metrics and compare them to a standard established using information from other healthcare facilities (healthcatalyst.com). Through this, the healthcare facility can identify where they are doing well and where they need improvement. |
|
Financial data that describes financial performance of revenue |
The data can be used to evaluate how a healthcare facility is doing financially. |
|
payer-mix breakdown of payers |
This principle can be used by healthcare facilities to evaluate and compare the percentage of revenue that come from government insurance, private insurance, and self-paying persons. |
Account Receivables
Account receivables are the sum of money owed to the healthcare facility for the healthcare services offered but not yet paid. One problem relating to the collection of payment for account receivables is the refusal of an insurance company to honour a request by the healthcare provider to pay for healthcare services. The other challenge is the collection culture. Most healthcare facilities are not interested in collecting payment as their role is to offer quality healthcare service to their clients. The lack of proper account receivable management is also another challenge. Inappropriate account receivable management can lead to bad debts (Singh, 2019). Monitoring cash flow is essential as it allows healthcare facilities to keep track of its financial position. Monitoring days in account receivable is also essential because days in account receivable affects cash flows for an entity.
Teamwork Principles
It is essential for people from both clinical and non-clinical departments to work together. These people come together to share knowledge, skills, and expertise to improve patient care. Some of the principles that work best for this kind of teamwork is personalised healthcare programmes and plans, healthcare records which are shared across the team, and joint care planning (cordisbright.co.uk). This kind of teamwork, however, reduces cohesive collaboration because the team members come from different healthcare disciplines.
Maximizing Reimbursement
Healthcare organizations are utilizing management utilization to a large extent. Management utilization matters now more than ever. Management utilization personnel are now viewed as a substantial part of cost containment and compliance strategies. Healthcare organizations are now positioning their management utilization structures and teams to deliver on the following objectives: adapting and responding to changing regulations and market forces and changing management utilization from an operational requirement to a tactical driver of revenue integrity and compliance (Butters, 2017). Healthcare organizations spend a lot of money every year to make sure they are paid appropriately for the service provided. While claim denials may appear like an inescapable aspect of the revenue cycle, healthcare organizations can drastically influence their risk with a sound management utilization framework. The healthcare organization are also utilizing case rate to a large extent. Many providers receive payment for every patient visit no matter the service provided.
References
Butters, J. (2017). Why Utilization Management Matter. Becker’s Hospital CFO Report. Retrieved from: https://www.beckershospitalreview.com/finance/why-utilization-management-matters.html
https://www.apta.org/WhatIsUM/
https://www.healthcatalyst.com/healthcare-benchmarking/
https://www.irmi.com/term/insurance-definitions/case-rate
Nehk, K. (2018). What is Fee for Service in Healthcare? Prognocis by Bizmatics. Retrieved from: https://prognocis.com/what-is-fee-for-service-in-healthcare/
Singh, P, H. (2019). 9 of the most common medical accounts receivable problems and how to fix them. Retrieved from: https://www.cogneesol.com/blog/9-most-common-medical-accounts-receivable-problems-and-how-to-fix-them