Final project submission

Running Head: FINANCIAL PRINCIPLE AND REIMBURSEMENT

FINANCIAL PRINCIPLE

Financial Principle and Reimbursement

Maria Williams

Southern New Hampshire University

03/14/2021

Financial Principles and Reimbursement

Strategies

Pay-for-performance is any payment arrangement to reimburse providers and is performance based and also may include incentives (Castro,2015).This model measures the performance using surveys on patients' experience with care and clinical methods. This strategy can be targeted to individuals, a group of physicians and organizations like health centers. Pay –for-performance can come in various ways that is direct incentives, bonuses, or reimbursements. The pay-for performance also consist of penalties on providers based on the providers ability and inability to meet specific performance.Electronic health records and resource use are controlled by a merit-based Incentives System. This payment method when adopted in Medicare includes financial impact with discipline.

Case rates and management utilization affects the pay-for-performance incentives, for instance when the number of cases increases there is always an increase in payment which is through positive feedback. The providers are paid for each service performed which include test and consultation. This impact immediately affects the pay for performance of incentives. Also the percentage of performance bonuses and penalties of the base payment the providers would receive are of low percentage. The more cases rise also the need to maintain and improve the quality care on efficiency and profitability (Castro, 2015).

Methods

Fee –for-services is a payment method for each service performed ,but overtime, additional costs are included (Castro,2015). For inpatient services relative weight case rates are used by the payer to promote shared cost. High cost items are excluded to reduce the loss risk by the providers. Discount from billed charges is also a method of payment,it offers a lower risk to the providers and the payer agrees to negotiate a discount with the provider’s standards. It is the easiest to calculate but payers mess with the billed charge leading to higher denial rate. Bundled payment,where providers are reimbursed for specific episodes (Castro,2015). This method encourages better care services and can prevent unnecessary medical services. Discount from billed charges is advantageous for the payer since it is easier to calculate and negotiations allowed.

Management

Financial management involves evaluating the financial effectiveness and overall operations of the health care organization (Miller,2021). By evaluation it helps an organization to plan the future, if an organization evaluates the revenue of x-ray services and discover that its small and they are losing patient, they may decide to expand the ex-ray services. Financing the financial team must raise funds for expenditure .they look for the cost and the benefit of the investment. They may decide to source funds from outside or internally (Miller,2021). Working capital management this are the current assets excluding the liabilities. Managing capital to reduce cost and running the organization effectively. Financial record keeping also to monitor the progress of the organization.

Receivable

Receivable is the payment which is not yet realized. In health care organizations there are many challenges in receiving payment from patients. Due to the low or lack of price transparency in the healthcare organization, patients are left liable to shock when they receive their medical bill. Unclear billing process is another challenge in the organization, a long process of clearing the bill even when the amount is ready to be paid. Healthcare organizations should adopt a less complicated billing process. Manual billing process which is tiresome and data is lost easily, automated billing process will practice revenue cycle speeding the payment. Monitoring cash flow by keeping financial records helps in planning and mostly to avoid losses in the organization.

Team Work

Teamwork is important, a visit to a healthcare organization requires a multidisciplinary group of clinicians, staff, patients and their loved ones. Ineffective care coordination is a health issue and health care is operating under a high stakes in the regulatory environment. The delivery of better services and the best quality care demands a reliable teamwork and collaboration. Teamwork will help boost creativity and performance. When multidisciplinary teams work together and it is easier to bring out creativity. Shared goals among the healthcare organization will help the support system among them, mutual trust in the team to avoid mistakes and failures(Land,2016). Communication is another principle that is required in the team to help in case of a surgery. Communication is important.

Maximizing

Case rates are single payment made to cover the cost based on the outcome decided upon by a payer. Health care should maximize the high increasing case rates which also causes an increase in payment per patient. Therefore the organization should use the advantage and expand using the more profit they get from the increased case rates. Billing has become a complex endeavor thus the industry has shifted from the free-for-service to value-based payment methods. Increasing the revenue cycle process. Also working with staff at the front end and all the staff will make sure all the data is collected accurately.

References

Casto, A. B., & Forrestal, E. (2016). Principles of healthcare reimbursement. American Health

InformationManagement Association.

Daar, A. S., Gutmann, T. H., & Land, W. (2016). Reimbursement,‘rewarded gifting’, financial

incentives and commercialism in living organ donation. In Procurement, preservation

and allocation of vascularized organs (pp. 301-316). Springer, Dordrecht.

Wood, F. C., McClave, S. A., Marsano-Obando, L. S., Gilbert, L., Russ, L., & Miller, K. R.

(2021). Reimbursement systems influence prosthodontic treatment of adult patients. Acta

Odontologica Scandinavica, 73(6), 414-420.