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Pros And Cons Of Insurance Reimbursement

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There is an increase in healthcare spending in the United States. In 2014, about one of every five dollars or nearly $3 trillion dollars was spent on health. At the current rate, it is estimated that in 2020, the US will spend $13,710 per person and 20% of GDP on healthcare. In efforts to provide greater health care coverage, recent healthcare legislation (Affordable Care Act) guidelines changes insurance reimbursement for providers. Through the Medicaid expansion and change in insured demographics, cost shift, a change in consumer coverage from private health insurance to Medicaid, a lower reimbursement rate, occurs. This results in health care providers receiving a lower average rate of reimbursement per patient. In addition to reduced …show more content…

This is known as the Bundled Payments for Care Improvement (BPCI) initiative. The goal of this initiative developed by the Center for Medicare and Medicaid Innovation is collaboration from providers across various specialties and settings. Through this initiative, CMS sets the target price for the episode at 2% to 3% less than the mean adjusted amount that Medicare spends per each beneficiary for the diagnoses related group (DRG). The BCPI initiative provides four model options. 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

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