Revenue and reimbursement

Introduction to health care finance class on health care revenue sources

Miatta Teasley

Capella University

MHA-FPX5006

Health Care Finance and Reimbursement

Professor Tom Clobes

March 24,2023

Introduction

Patients pay the majority of the bill for healthcare. Both public and private funding sources support healthcare. Payers produce healthcare revenue. A healthcare organization's profile frequently includes information about the payer mix or the percentage of revenues from different payers (Rosenbaum & Wilensky, 2020). Medicaid, Medicare, and Managed Care are a few examples of the different types of healthcare revenue sources.

Medicaid

Medicaid covers the health care costs of tens of millions of low-income Americans, such as children, pregnant women, the elderly, and people with disabilities. According to federal rules, states manage Medicaid (Rosenbaum & Wilensky, 2020). The program has both state and federal support. Low-income people can access healthcare thanks to Medicaid. Reimbursement is a challenge.

State-by-state Medicaid reimbursement policies differ, but some standards are universal. Each service is paid for its services under the fee-for-service (FFS) model. Physicians are compensated at FFS rates for specialized patient care. Unfortunately, dealing with patients who have private insurance benefits doctors more (Rosenbaum & Wilensky, 2020). Thanks to the Affordable Care Act, managed care organizations are assisting states in reducing Medicaid costs. 70% of Medicaid participants utilize managed care. Medicaid's funding, benefits, and administration are all intricate. Medicaid reimbursement is problematic, so many doctors steer clear of it. Thankfully, a lot of doctors are eager to serve their patients.

Medicaid offers low-cost coverage for people with high needs. Medicaid shields recipients from out-of-pocket costs as well (Rosenbaum & Wilensky, 2020). The program provides coverage for stays in hospitals, visits to doctors, drugs prescribed by doctors, preventive treatments, skilled nursing facilities, home health care, and hospice care.

 

Within the rules set by the federal government, state Medicaid programs decide on the type, number, length, and scope of services. Some benefits are required by federal law, but the states can decide on others (Rosenbaum & Wilensky, 2020). Hospitalization, medical care, lab and imaging services for diagnosis, and home health care are all important benefits. Case management, physical and occupational therapy, and medicine prescribed by a doctor are all examples of services that people can choose to use or not.

Medicare

Medicare was created in 1965 as a government health insurance program for people over 65. The inclusion of long-term disabled people under 65 in the program began in 1972. For 60 million elderly and disabled people, Medicare offers financial and health security (Roberts & Mehrotra, 2020). The program covers hospital stays, doctor visits, prescription medications, preventative services, expert nursing amenities, home care, and hospital care.

Medicare reimburses medical staff for treating enrollees. If original Medicare enrolees receive treatment from a non-assigned provider, they may also be required to file claims for payment (Roberts & Mehrotra, 2020). In this instance, documentation is required for reimbursement of medical expenses. Form 1490S, the Patient Request for Medical Payment, is used to start a Medicare claim. It is given to the neighborhood Medicare contractor along with an itemized bill.

The patient might have to file a Medicare claim if the doctor doesn't. Non-assignment physicians may bill Medicare directly or demand that you pay them in advance and file your own claim. Whether the provider submits a claim or accepts a Medicare assignment will determine the person's action and payment. If the doctor consents to the assignment of Medicare benefits, the provider submits a Medicare claim, and the patient is only responsible for the Medicare deductible and coinsurance (Roberts & Mehrotra, 2020). A person might be required to cover the entire cost or just the excess charges, deductible, and coinsurance if the doctor submits a claim but refuses to accept Medicare assignment. Any refund or balance would be discussed between the patient and the doctor after Medicare has reviewed the claim. If the provider refuses to accept Medicare assignments or submit a claim, an itemized bill, and a Medicare Form 1490S are generated for payment (Roberts & Mehrotra, 2020). Deductibles, coinsurance, and excess costs are paid by the patient. Medicare may pay the patient or the provider. A patient might receive a refund after processing or might owe the provider money. These procedures are applicable because Medicare Advantage programs directly pay original Medicare subscribers' claims. There are still non-Medicare providers of health services. For the majority of services, businesses may charge 15% more than Medicare.

Medicare covers hospital stays, doctor visits, prescription drugs, preventive care, skilled nursing care, home health care, and clinic visits. Medicare covers people over the age of 65 who are disabled and ESRD patients of all ages (Roberts & Mehrotra, 2020). Medicaid aids low-income people without health insurance or with insufficient coverage.

Managed care

The goal of managed care is to reduce costs without sacrificing quality. Popular in contemporary health programs is managed care. networks of providers, oversight, dosage levels for prescription drugs, and more (Cantrell & Reilly, 2020). They reduce costs without sacrificing quality.

Before receiving a diagnosis, patients are unsure of what to buy. Planning a fever is difficult. Rarely do patients have the option to negotiate prices or compare options. When paying for medical care later, people frequently are unsure of what is fair or how much they will spend (Cantrell & Reilly, 2020). Most American goods and services as well as best practices in ten high-income countries are in opposition to this healthcare paradigm.

Managed care reimbursement covers the majority of medical expenses. Managed care lowers medical expenses without compromising on quality. According to this definition, managed care is cost containment (Cantrell & Reilly, 2020). Managed care systems include Medicaid and Medicare as well. Managed care organizations (MCOs) are in charge of overseeing managed health insurance plans. MCOs collaborate with providers to link reimbursement with a standardized care system across a healthcare network in order to bring down the overall cost of providing medical services. Reference-based pricing compares the total costs of comparable treatments to negotiate lower medical costs (Cantrell & Reilly, 2020). By remaining independent of medical networks, it lowers inflated costs and expands access to top-notch healthcare.

Clean claim reviews go line by line through medical invoices to identify and get rid of errors, extra charges, and discrepancies that patients would have to pay for. Bill payments and payment integrity both increase (Cantrell & Reilly, 2020). These cost-cutting choices may benefit healthcare providers who serve employees. However, medical billing and reimbursement for healthcare are complex, so it's crucial to work with a specialist who can translate the jargon and ensure you're only paying what is necessary and acceptable.

Managed care results in decreased service usage. It frequently reduces patients' out-of-pocket expenses. Coordination of patient services may be improved by managed care (Cantrell & Reilly, 2020). The majority of managed care companies employ the patient's primary care physician to guide and coordinate the patient's treatment, which should result in services that are more rational, individualized, and timely than those provided by other systems. Managed care improves the evaluation of patients and clinicians by using internal computer information systems to monitor treatment quality. Finally, some managed care organizations provide patient transportation from their homes to medical facilities (Cantrell & Reilly, 2020). These services might be required by patients with severe impairments, particularly those individuals living in areas without public transport.

References

Cantrell, S., & Reilly, C. (2020). Milestones in managed care pharmacy. Journal of Managed Care & Specialty Pharmacy, 26(11), 1379–1383. https://doi.org/10.18553/jmcp.2020.26.11.1379

Roberts, E. T., & Mehrotra, A. (2020). Assessment of disparities in digital access among Medicare beneficiaries and implications for telemedicine. JAMA Internal Medicine, 180(10), 1386. https://doi.org/10.1001/jamainternmed.2020.2666

Rosenbaum, S., & Wilensky, G. (2020). Closing the Medicaid coverage gap: Options for reform. Health Affairs, 39(3), 514–518. https://doi.org/10.1377/hlthaff.2019.01463