Journal 1

In Module One, our first step is to direct our focus on what healthcare reimbursement means and how that meaning will be applied throughout the course. In Module One, you will be provided with explanations of the terminology and methodologies surrounding the cost of healthcare services and, subsequently, how providers of those services are compensated.

Reimbursement in a healthcare context refers to the payment that providers and facilities receive for the services that they provide their patients. Providers and facilities include physicians, hospitals, clinics, outpatient rehabilitation centers, home healthcare centers, and other healthcare facilities. Many providers are not-for-profit as opposed to investor-owned.

Questions that will be answered in this module include:

· What are reimbursement methodologies and how do they impact healthcare organizations?

· What are the current trends in healthcare reimbursement?

· How might healthcare administrators differentiate between reimbursement methods?

· How are financial management principles applied to reimbursement methods?

· Who are the key stakeholders surrounding healthcare reimbursement?

The answers to these questions will provide you with a better understanding of the background, context, and trends surrounding healthcare reimbursement systems. Further, you will find it helpful to assume the role of a healthcare administrator as you practice what it would be like to assume a management position. Although you will have your own personal opinions based on experiences from a patient perspective, for this course, you will view the assignments through the lens of the healthcare administrator. The administrator is challenged with providing the best care and services to the communities that they serve, while charging a price that is affordable to both the patient and the organization. The administrator must also take into account the various compliance standards and government regulations.

Why Study Reimbursement?

Healthcare administrators and other health personnel can better meet the needs of their patients, clients, and organization by offering clear guidelines and cost structures concerning healthcare reimbursement. The key stakeholders of healthcare reimbursement systems are patients, healthcare providers, and third-party processors. As such, there are many perspectives to consider when administrators develop strategic plans designed around revenue generation. Many healthcare administrators are involved in contract management decisions and also represent their organizations by negotiating with managed care organizations and third-party payers.

The Affordable Care Act is one of the largest pieces of healthcare legislation in our era. The law itself is over 1,000 pages covering funding, Health Insurance Portability and Accountability Act (HIPAA) requirements, insurance coverage, health information systems, and reimbursement. Not surprisingly, this has contributed to the increase in employment in the healthcare industry. Employment in healthcare-related jobs is expected to rise by 22% over the next 7 to 10 years (Bureau of Labor Statistics, 2014). Hospitals account for approximately 39% of total healthcare employment (Bureau of Labor Statistics, 2014).

Not surprisingly, there are career opportunities for those individuals entering the healthcare administration field. The study of reimbursement systems and methodologies provide students with knowledge needed to make management decisions impacting the revenue cycle. Consequently, management decisions impact the sustainability of the healthcare organization.

Financial Management and the Role of the Healthcare Administrator

Financial management rests on theory, concepts, and tools that help managers make informed decisions. Therefore, in the context of reimbursement, healthcare administrators find themselves applying financial management principles to revenue cycle management. Healthcare information systems provide resource data that informs decision making (Stansfield, Walsh, Prata, & Evans, 2006). One source of financial data can be found in the general ledger system. Another source of data can be found in admission reports. Specific reports can provide information on the number of encounters (the number of patients that a doctor has seen). One example of an external report is a report on the number of aging individuals located in a geographical location. This information can be found on a state or government website (Centers for Medicare & Medicaid Services, 2015). Healthcare administrators use many sources of internal and external data to inform strategic, operational, and financial decision making.

Next Steps

In Module Two, you will examine healthcare reimbursement based on the reporting guidelines established by the Centers for Medicare & Medicaid Services (CMS). You will visit the CMS Website frequently in this course because of the vast amount of information that is provided on reimbursement, clinical coding, and other Medicare- and Medicaid-related topics.

References:

Bureau of Labor Statistics. (2014). Occupational outlook handbook. Retrieved from http://www.bis.gov/ooh/community-and-social-service/social-and-human-service-assistants.htm

Centers for Medicare & Medicaid Services. (2015). Medicare. Retrieved from https://www.cms.gov/Medicare/Medicare.html

Stansfield, S. K., Walsh, J., Prata, N., & Evans, T. (2006). Information to improve decision making for health. In D. T. Jamison, J. G. Breman, A. R. Measham, G. Alleyne, M. Claeson, . . . P. Musgrove (Eds.), Disease control priorities in developing countries (pp. 1017–1030) (2nd ed.). Washington, DC: World Bank. Retrieved from http://www.ncbi.nlm.nih.gov/books/NBK11731