ipl-logo

Medicare Payment Mechanisms In Healthcare

1620 Words7 Pages

Payment mechanism are contracts among patients, providers, and payers to provide health care services. Payment mechanisms attempt to improve management, and quality of care. There are several hospital payment system that have both advantages and disadvantages on cost containment and provider behavior. Four of these payment systems include, fee-for-service, per diem, DRG based payment system, and capitation. Cost containment as a policy issue is related to the question of what the right amount systems should pay for health care (Carrin, 2003). In part II, the difference in Medicare payment methods for outpatient services versus physicians’ services will be discussed. The difference between global payments and bundled payments will also be covered. …show more content…

Physicians are paid by Medicare based on a list of services, and their payment rates (Medicare Payment, 2014). Under this payment method, the unit of payment is usually an individual service, like an office visit, or diagnostic procedure, and the products range from general services to bundles of services associated with surgical procedures (Medicare Payment, 2014). All of the services are reported and classified to CMS according to their Healthcare Common Procedure Coding System (HCPCS) (Medicare Payment, 2014). Unlike OPPS, the fee schedule payment method does not use APC codes when billing, this method only uses the HCPCS codes (Guidi, 2010). When determining the payment rates for fee schedule, The Centers for Medicare and Medicaid Services (CMS) considers the amount of work required to provide the service, expenses that are related to maintaining the physician practice, and liability insurance costs (Medicare Payment, 2014). The article (2014) states that the values for these three sources are adjusted by variations in the input prices for different markets, and then the total is multiplied by a conversion factor that is a standard dollar amount. According to the Medicare Payment Advisory Commission (2014) payment rates are based on relative rates called relative value units or RVU. These values account for the relative costliness of the inputs used to provide physician services, work, expenses and liability costs (Medicare Payment, 2014). When calculating the payment rates, the three RVU values are adjusted to reflect the price level for related inputs in the local market, and separate geographic practice cost indexes are used for this process (Medicare Payment, 2014). The article (2014) states that the payment schedule fee is determined by adding the adjusted weights and multiplying the total by the fee schedule conversion factor. For most fee schedule services,

Show More
Related

What Are The Pros And Cons Of Capitation Payments

115 Words | 1 Pages

Capitation payments are prearranged or pre-established payments received by a physician, hospital or clinic for patients or enrollees in a healthcare plan. Fee for services are when a physician or hospital receives a fee for services rendered. Pros and cons of capitation depends on if the enrollees ' use the services. If patient cost go over the capitation payment accepted by the provider they loose money. If cost don 't go over the payment the provider pockets what ever money is left over.

Read More

Pros And Cons Of Medicare Reimbursements

264 Words | 2 Pages

Over 28 million people in the world receive health insurance through the Medicare program (Gornick, n.d.). The medicare program was designed to operate throughout the nation with a set of uniformed benefits and cost-sharing requirements in the form of deductibles and coinsurance. However, over the years the program data indicated that the Medicare premiums and deductibles, benefits paid out varied significantly by state of residence of the beneficiary (Gornick, n.d.). These variations are due to part of the fact that reimbursements are based on local physicians' prices. Many policy analysts suggested that the geographic variations in Medicare reimbursements should be reduced (Gornick, n.d.).

Read More

Advantages Of Outsourced Medical Billing

1146 Words | 5 Pages

In-house vs. Outsourced Medical Billing Services A never-ending challenge for a physician is to decide whether to outsource the medical billing services to a third-party or to keep the medical billing process in-house that winds up heavily on a healthcare provider. This explicitly differs from practice to practice and is based on several factors: • Duration of the business • Size of clinical staff • Financial health of a healthcare organization Medical Billing often referred as Revenue Cycle Management (RCM), includes the most complex and crucial components of a healthcare business. The advents of latest inventions in technology, increasing government regulations, and uncollectible accounts have ignited a new trend leading to an increased

Read More

Medicare Part-A Case Study

390 Words | 2 Pages

Dear healthcare staff: The hospital is currently under financial difficulty and as a hospital administrator, I would like to explain to you how the Medicare (DRG) works. First, Medicare is a federal-sponsored health insurance program for individuals who are older than 65 years. Medicare also covers people with major debilitating conditions, such as End Stage Renal disease without any limit to household income. In order to qualify for Medicare, a person has to be a US citizen or with at least 5 years of permanent residence in the United States. Medicare is divided into four parts, namely: Medicare part A, B, C and D. The Medicare part A covers the inpatient cost of the hospital and skilled nursing facilities; Medicare part B focuses on outpatient

Read More

A Primer On Medicare Summary

711 Words | 3 Pages

Both beneficiaries and Medicare paying for these services can be

Read More

Resource-Based Relative Value System

202 Words | 1 Pages

The Medicare Physician Fee Schedule (MPFS) uses a resource-based relative value system (RBRVS) that assigns a relative value to current procedural terminology (CPT) codes that are developed and copyrighted by the American Medical Association (AMA) with input from representatives of health care professional associations and societies, including ASHA. The relative weighting factor (relative value unit or RVU) is derived from a resource-based relative value scale. The components of the RBRVS for each procedure are the (a) professional component (i.e., work as expressed in the amount of time, technical skill, physical effort, stress, and judgment for the procedure required of physicians and certain other practitioners); (b) technical component

Read More

Pros And Cons Of Insurance Reimbursement

595 Words | 3 Pages

The first model provides retrospective reimbursement based on inpatient prospective payment system. The second model provides retrospective reimbursement passed on care episodes of extended set times (1, 2, or 3 months) post discharge from hospital; the third model provides payments associated with post acute care episodes following discharge from hospital; and the fourth model offers prospective payments which include all services provided during hospitalization and includes all 30-day readmissions. These Bundled Payment Plans enable providers to focus on providing more effective care that focuses on patient outcomes and research, with the awareness that a standard required care be provided within a set allotment, rather than reimbursement based on quantity of services provided, or certain billing code, as currently

Read More

Medicare Public Policy Summary

743 Words | 3 Pages

Many uninformed individuals believe that Medicare is only a single program, this is a common mistake. Medicare is actually three different programs. Medicare Part A, the first program, financed by payroll taxes offers coverage of inpatient hospital costs and some of the costs of long-term care for the elderly. Medicare Part B covers the costs of both physician expenditures and outpatient hospital services. Part B, different from that of Part A, is financed through enrollee premiums and the general revenues of the government.

Read More

Medicare Part A Case Study

1499 Words | 6 Pages

Both Medicare Parts B and D are supplementary programs that are options to citizens. These beneficiaries pay a monthly premium and meet a deductible. In the past fifty years, Medicare has undergone some changes, but not to the extent that Medicaid has been changed (“Medicare,” Gale

Read More

Similarities Between Medicaid And Medicare

217 Words | 1 Pages

Medicare is only a federal based program. One of the other differences between the two are Medicaid will cover long term care and assisted living as long as it is necessary, where Medicare does not. The similarities that I found among the two are the fact that they are both funded federally, and that they are both

Read More

Medicare Synthesis Essay

673 Words | 3 Pages

In the year 2015, Medicare Access and Chip Re-Authorization Act (MACRA) have made a lot changes in the Medicare pays for physician services. Indeed, the Medicare Access and Chip Re-Authorization act terminating the sustainable growth rate and from the year 2015 to 2025 the Medicare Access and Chip Re-Authorization Act is providing the physicians the stable and sometimes flat updated payment to the Medicare Physicians. Moreover, from the year 2026 completely it’s a different scenario as physicians will be receiving a different annual update as they will be paid under the new Merit based Incentive Program system with 0.25 % under the MIPS. Additionally, the Merit based Incentive Program system is indeed based on the fee-for-service model which makes to tie with the quality of performance by the physician.

Read More

Medicare Contrast Essay

523 Words | 3 Pages

1. Medicare and Medicare are both Federal health care programs. However, Medicare is an insurance plan that supports people mainly over 65 that have paid into federal insurance taxes, and Medicaid is an assistance program that assists low-income citizens of all ages. Premiums are paid for non-hospital care in Medicare. There are no premiums for Medicaid, but occasionally a co-pay is required.

Read More

Medicare Comparison

469 Words | 2 Pages

Because Medicare is run by the federal government, its coverage, rules and guidelines are basically the same everywhere in the United States. With this program patients pay part of the costs through deductibles for hospital stays and they are required to pay monthly premiums health care services. Medical bills are paid from trust funds which those covered have paid into. Medicare has four parts: Part A: offers

Read More

Compare And Contrast Medicaid And Medicare

664 Words | 3 Pages

However, younger people may qualify if they have received 24 consecutive months of Social Security disability benefits, along with other specific requirements. There are four parts to Medicare’s benefits. Original Medicare includes Part A and Part B. Part A generally covers hospital care and hospice care, and Part B (Original Medicare) covers services such as medical care, durable medical equipment, and supplies, and some preventative services. Part A is funded primarily through a dedicated payroll tax paid by employers and their employees, while Part B is financed through a combination of general revenues, premiums paid by beneficiaries, and interest.

Read More

Essay On Medicare

542 Words | 3 Pages

(AAPR, January 1st, 2011) Medicare part B is the part that pays for a portion of your doctors’ visits, medical equipment, outpatient procedures, and so on. Part B required you to pay a monthly premium to Medicare, and there is a small deductible that you must reach before Part B

Read More

More about Medicare Payment Mechanisms In Healthcare

Related Topics

Open Document