MHA FPX 5006 Assessment 1 Attempt 1 Financial Basics Purpose of Health Care Reimbursement Programs

Programs like Medicare, Medicaid, and managed care work to lower the cost of medical treatment for those who need more help paying for coverage. Over 55 million members of Medicare are covered for goods and services (Bosch et al., 2022). Approximately 9 million non-elderly persons with disabilities, including 1.4 million children, are among the more than 60 million Americans who rely on Medicaid. Such initiatives provide coverage for millions of people across the whole country (Bosch et al., 2022). Each plan’s coverage is subject to federal and state regulations. Plan, operator and service coverage all affect the rate of payment. Different coverage and reimbursement models, such as the fee-for-service approach, are described below. Medicare, Medicaid, and managed care programs all employ the fee-for-service business model. 

States often determine provider payments under the fee-for-service model (Browning et al., 2022). Such payments must be under effectiveness, economy, and standard of healthcare, and they must be adequate to ensure access comparable to that of the general population, according to Section 1902(a)(30)(A) of the Social Security Act. For a variety of services, Medicaid and CHIP Payment and Access Commission (MACPAC) have recorded state-specific fee-for-service payment procedures. Since Medicaid Fee for service (FFS) reimbursement rates for doctor services are frequently substantially lower than those paid by other payers, there are worries that the low fees would impair doctors’ willingness to accept Medicaid, and hence patients’ access to treatment (Bosch et al., 2022). Research has repeatedly established a correlation between low reimbursement rates (compared to other payers) and reduced levels of doctor engagement, even though other factors, such as administrative load, are also known to impact physician participation. Despite wide variations by state and service, Medicaid FFS physician payment rates are typically two-thirds of what Medicare pays. Although states pay care facilities differently, it is more challenging to compare Medicaid FFS payments to various providers.

MHA FPX 5006 Assessment 1 Attempt 1 Financial Basics

To compare Medicaid FFS inpatient hospital payments between states and with Medicare, MACPAC created a state-level payment index. Once supplementary reimbursements and provider contributions are acknowledged, the overall Medicaid payment is on level with or greater than Medicare (Moore, 2022). For skilled nursing payments, MACPAC has not conducted a comparable analysis. A managed care program was engaged by 83% of all Medicaid participants in 2019 (Heaton & Prasanna Tadi, 2022). For a variety of reasons, states have implemented managed care into their Medicaid systems. States have some control and certainty over upcoming expenditures because to managed care. Managed care, as opposed to FFS, can promote systematic attempts to assess, evaluate, and manage progress, equity, and efficiency and can permit more accountability for results. Additionally, managed care programs can provide a chance for better quality care and administration.

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The Reimbursement Process that Health Care Organizations Must Undertake

The five stages listed below must be followed by providers to get and keep payment for healthcare:

1. Providers sign in to the electronic health record (EHR) and enter crucial information about the patient’s past and current issues.
2. In the electronic health record (EHR), medical codes are assigned by providers or qualified medical coders, or the EHR may automatically recommend codes.
3. Suppliers have two options for submitting claims: either directly to payers or electronically through a processor that acts as a middleman and checks claims for potential inaccuracies.
4. A payer evaluates a claim after it has successfully passed through the clearinghouse and decides whether to completely resolve toward the authorized amount or to reject all or part of it.
5. Even though providers can take efforts to spot and avoid mistakes up front, they must also deal with post-payment audits, in which payers ask for proof that claims have been paid appropriately.

Some phases, including day and night, seasonal fluctuations, month-end closures, and year-end statements, are so typical for healthcare finance employees that they are overlooked. The proverb “the only permanent in life is change” and the proverb “the more things change, the more they stay the same” may both be applied to life. The idea of cycles applies when providers approach the task of examining payer compensation. Here are the top five ways that medical facilities are compensated: