FINANCIAL MANAGEMENT IN HEALTH CARE QUESTIONS AND ANSWERS

LEADERSHIP: CHAPTER 4: FINANCIAL MANAGEMENT IN HEALTH CA
cf cf cf cf cf cf cf



RE:
FINANCIAL MANAGEMENT IN HEALTH CARE
QUESTIONS AND ANSWERS

RevenuecfCyclecf-cfanswer--Entirecfprocesscfofcfcollectingcfcash

AspectscfofcfRevenuecfCyclecf-cfanswer--1.cfRegistercfpatientcf&cfprovidecfservices
2.cfDocumentcfservicescfincfmedicalcfrecordcf(incfmedicalcfrecord)
3.cfEstablishcfcharges
4.cfPreparecfclaim/bill
5.cfSubmitcfclaim
6.cfReceivecfpayment

HCPScfcodescf-cfanswer--
Usedcfforcfreportingcfprocedurescfbycfphysicianscfforcfbothcfinpatientcfandcfoutpatientcfprocedures;cfusedcfbycfhospitalscff
reportingcfoutpatientcfprocedurescfonly;

infocfaboutcfprocedure

LevelcfIcfcodescf-cfanswer--Referredcftocfascfcurrentcfprocedurecfterminologycf(CPT)cfcodescfundercfHCPS

Fee-For-Servicecf(FFS)cf-cfanswer--Reimbursementcftiedcftocfamountcfofcfservicescfrendered;cf
unbundled

Capitationcf-cfanswer--
Reimbursementcftiedcftocfpatientcfpopulationcf(#cfofcfenrollees);cfpercfmembercfpercfmonthcfpayments.

ICD-9cfcodescf-cfanswer--
Requiredcfforcfprocedurecfreportingcfforcfhospitalcfinpatientcfprocedures;cfusedcfforcfdiagnosiscfreportingcfforcfallcfhealthc
ecfproviders,cfincludingcfhospitalscfandcfphysicians

HCPScf&cfCPTcfcodecfsignificancecf-cfanswer--Effectcfoncfprovidercfpaymentcfforcfbothcffacilitiescfandcfphysicians.

Pricecfimpactcfbasedcfoncfmarketcfsharecf-cfanswer--
Thecfgreatercfthecfmarketcfsharecfacfcompanycfhascfthecfhighercfthecfpricescftheycfcancfcharge;
lesscfcompetitorscfmeanscfpricescfcancfgocfup;
marketcfshare=cfcompetitivecfadvantage

Howcftocfcontrolcfrevenuecffunctioncf-cfanswer--1)cfSetcfpricescf--
incfacfwaycftocfgeneratecfthecfrequiredcflevelcfofcfrevenuecfneededcftocfsustaincfoperationscf(Medicare&Medicaidcfpaycfonc
ed-fee-schedulecfthatcfhascfnothingcftocfdocfwithcfprices).
2)cfContractcfnegotiationcf--
criticalcfforcfhealthcfcarecffirmscfthatcfreceivecfmajoritycfofcfrevenuecffromcfcommericalcfinsureers;cfnegotiatecfratescfhighe
hancftheircfcosts
3)cfBillingcfandcfcodingcfissuescf--
Allcfdiagnosescfmustcfbecfrecorded,cforcfthecfrightcfDRGcfmaycfnotcfbecflistedcfoncfthecfbill,cfresultingcfincfunderpaymentcffor
ervicescfrendered.

1cf/cf6

, LEADERSHIP: CHAPTER 4: FINANCIAL MANAGEMENT IN HEALTH CA
cf cf cf cf cf cf cf



RE:
Bundledcfservicescf-cfanswer--Twocfkeycffeatures:cf
1)cfPaymentcfgroupedcfintocfmutuallycfexclusivecfsetcfofcfcategories
2)cfFixedcffeecfspecifiedcfpercfunitcfofcfservice

Howcftocfincreasecfrevenuecffunctioncf-cfanswer--Increasecfcompetitivecfposition/advantage
1)cfSetcfprices
2)cfContractcfnegotiation
3)cfBillingcf&cfcodingcfissues

Pricingcfuponcfdifferentcfpayerscf-cfanswer--
Cancfnegotiatecfdifferentcfratescfofcfpaymentcfwithcfthecfmostcfimportantcfdisctinctioncfbeingcfunitcfofcfpayment

HMOcfstaffcfmodelcf-cfanswer--HMOcfmustcfcontrolcfprimarycfphysiciancfnetwork;cfemployeescfofcfHMOcf(non-contractua

Fourcfmajorcfpaymentcfunitscf-cfanswer--1)cfHistoricalcfreimbursement
2)cfSpecificcfservicescf(chargecfpayment)
3)cfCapitatedcfrates
4)cfBundledcfservices

Adversecfselectioncf-cfanswer--Insurancecfcompaniescfmustcfhavecfbothcfhigh-riskcfandcflow-risk;cfsickcf(high-
risk)cfpeoplecftendcftocfbuycfhealthcfinsurancecfbutcfwillcfequalcflossescfforcfinsurancecfcompanies;
EX:cfIfcfsignificantcfnumbercfofcfAIDScfpatientscfarecfattractedcftocfacfhealthcfplan,cfbothcfproviderscfandcfhealthcfplancfmayc
se.

Othercfbalancecfsheetcfaccountscfandcftheircfeffectscfoncfcashcf-cfanswer--
Ascfthecfnumbercfofcftransactionscfincreases,cfthecfnumbercfofcfindividualcfassetscf&cfliabilitycfalsocfincreasescf(akacfaccou
s).

Dualitycfprinciplecfstatescf-cfanswer--Forcfeverycfdebtcfthere'scfacfcredit

Individualcfassets,cfliability,cfandcfnetcfassetcfaccountscfalwayscfcreatecfacfbalance

Financialcfauditcf-cfanswer--
Whencfancfoutsidecfparty,cfusuallycfacfCPAcffirm,cfverifies,cfreviewscfandcfrenderscfancfopinioncfaboutcfthecffinancescfofcfacf
mpany

QuicfTamcf-
cfanswer--"Whistleblower" cfactions;cfprovisioncfofcfthecfFederalcfCivilcfFalsecfClaimscfAct;cfFCAcfclaimscfbroughtcfbycfindi

ual

FederalcfCivilcfFalsecfClaimscfActcf(FCA)cf-cfanswer--FederalcfGovernment'scfprimarycfcivilcfremedycfforcfimproper/
fraudulentcfclaims;cfintentcfnotcfrequired

Fraudcf-cfanswer--Intentionalcfactscfofcfdeception;cfEX:cfkickbackscfforcfreferralscforcfmedicalcfprocedures

Abusecf-cfanswer--Impropercfactscfthatcfarecfinconsistentcfwithcfstandardcfpracticecfandcfmaycfresultcfincfover-
paymentscforcfover-utilization

ThecfAnti-KickbackcfStatutecf(AKS)cf-cfanswer--
Nocfpersoncfmaycfoffercforcfrequest,cfgive,cforcfreceivecfremunerationcfincfexchangecfforcfacfreferralcfforcfacfgoodcforcfservic
hatcfmaycfbecfreimbursedcfundercfacffederalcfhealthcarecfprogram;cf
2cf/cf6