Reimbursement Methods
What are the definitions of and the similarities and differences of the following reimbursement methods; capitation, discount, per diem, case rate, DRG’s/MS-DRG’s?
Starting with capitation. Capitation is prepayment for services, per member per month. A physician or facility is paid the same amount of money every month for each member or patient regardless if that patient is actually seen or receives services and regardless of how extensive of services that member/patient have received. The capitation amount is calculated and set at the fixed amount usually for one year.
Discount means the percentage off of total charges. The bill is for $100 and receives a 20% discount, responsibility would then be $80. A straight discount is usually found in areas with markets of low levels of managed care or more rural or destitute areas. This is where the facility submits a claim and the plan gives a discount with an agreed upon percentage. A sliding-scale discount, is dependent on the facilities total volume of admissions. Sometimes also left to the discretion of the facility when and which
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For example, an inpatient stay. The facility is paid a certain negotiated amount for every day regardless of the costs or charges incurred. Flat per diems, are any inpatient stay, mainly in the acute care settings. Service-specific per diems are multiple sets of negotiated per diems based on service type. Two examples are OB-Gyn and rehab. Per diem differential, are reimbursed by day, inpatient care where hospitalizations require surgery (s) or more extensive care on the first day and lessoning each day of the stay. Sliding scale per diem, just like the sliding scale discount, but based on total volume. When using the sliding scale per diem it is suggested to reevaluate and adjust on a quarterly basis to utilize unexpected changes to the advantage of the facility, this way the facility is not losing out in the