Reimbursement -Exam 1 with
Complete Solutions
What is insurance? - ANSWER-Insurance is a system of reducing a person's exposure
to risk of loss by having another party (insurance company or insurer) assume the risk
Insurance company assumes the risk and reduces its own risk by distributing the risk
among a larger group of persons (insured's) Group of persons having similar risks of
loss and is known as a risk pool. Premium is the payment in return for assuming the
insured's exposure to risk of loss. Premium payments for all of the insured's are in the
group and are combined into a pool of money
What is a First Party Payer? - ANSWER-First Party Payer - The patient himself or
herself or the person, such as a parent, responsible for the patient's health bill
What is a Second Party Payer? - ANSWER-Second Party Payer - The physician, clinic,
hospital, nursing home, or other healthcare entity rendering the care
What is a Third Party Payer? - ANSWER-Third Party Payer - Is the uninvolved
insurance company or health agency that pays the physician, clinic or the other second
party provider for the care or services rendered to the first party (patient)
What are the types of healthcare Reimbursement Methodologies? - ANSWER-Fee-for
service reimbursement and episode-of care reimbursement?
What is a Fee-for-Service reimbursement? - ANSWER-Healthcare payment method in
which provider retrospectively receives payment for each service rendered. A fee is set
amount or a set price. A healthcare organization or fractioned bills for each service
provided on a claim that lasts the fees or charges for each service. People who have
health insurance that reimburses on the basis of fee-for-service have the advantage of
great independence. They are allowed to make almost all health decisions about which
physician to see and about which conditions to have treated. Disadvantage is that they
often have higher deductibles or copayments.
What is a fee? - ANSWER-A set amount or a set price.
Types of Fee-for-Service? - ANSWER-Self-Pay, Traditional Retrospective Payment;
Managed Care Methods
Describe Self-Pay - ANSWER-Self-Pay - Patients or their guarantors (responsible
persons such as parents for children) pay a specific amount for each service received.
Self-insured plan is one in which the employer eliminates the "middle man" the
, employer administers its own health insurance benefits. Rather than shift the risk to a
health insurance entity.
What is a MS-DRG - ANSWER-Medicare refinement to the diagnosis-related group
(DRG) classification system, which allows for payment to be more closely aligned with
resources intensity. Each MS-DRG categorizes patients who are homogenous in terms
of clinical profiles and requisite resources. Each MS-DRG has a payment rate called a
"weight". Weights are relative to one another. Higher weights are associated with
groups in which more resources are need for care and treatment. Lower weights are
associated with groups in which less resource is needed for care and treatment. Higher
weights get higher payments, lower weights get lower payments
What is some of the criticisms of Episode-of-Care Reimbursement - ANSWER-The
impact of the case-based payment method is that it rewards effective and efficient
deliver of health services and penalizes ineffective and inefficient delivery. Some
advocates have noted that the payment method creates incentives to substitute less
expensive diagnostic and therapeutic procedures and laboratory and radiologic tests
and to delay or deny procedures and treatments. Other say the savings associated with
eliminating wasteful or unnecessary procedures and tests and that volume and expense
do not necessarily define quality.
Resource Based Relative Value Scale (RBRVS) - ANSWER-RBRVS is a discounted fee
schedule for Medicare uses to reimburse physicians. The RBRVS is a payment method
that classifies health services based on the cost providing physician services in terms of
effort, practice expenses (overhead), and malpractice insurance. As a schema used to
determine how much money medical providers should be paid. It is partially used by
Medicare in the United States and by nearly all Health maintenance organizations
(HMOs). RBRVS assigns procedures performed by a physician or other medical
provider a relative value which is adjusted by geographic region (so a procedure
performed in Manhattan is worth more than a procedure performed in Dallas). This
value is then multiplied by a fixed conversion factor, which changes annually, to
determine the amount of payment.
The form UB04, What provider use this - ANSWER-Healthcare facilities submit claims
via the electronic format (screen 8371) which replaces the UB-04 paper billing form. The
UB04 claim form is used by facilities rather than physicians for their health insurance
billing. Hospitals, rehabilitation centers, ambulatory surgery centers, clinics, etc need to
bill their services on the UB04 form in order to get paid.
The form CMS1500, What provider uses this - ANSWER-Physicians submit claims via
the electronic format (screen 837P), which takes the place of the CMS-1500 billing form.
The Form CMS-1500 is the standard paper claim form used by health care
professionals and suppliers to bill Medicare Carriers or Part A/B and Durable Medical
Equipment Medicare Administrative Contractors (A/B MACs and DME MACs).
Complete Solutions
What is insurance? - ANSWER-Insurance is a system of reducing a person's exposure
to risk of loss by having another party (insurance company or insurer) assume the risk
Insurance company assumes the risk and reduces its own risk by distributing the risk
among a larger group of persons (insured's) Group of persons having similar risks of
loss and is known as a risk pool. Premium is the payment in return for assuming the
insured's exposure to risk of loss. Premium payments for all of the insured's are in the
group and are combined into a pool of money
What is a First Party Payer? - ANSWER-First Party Payer - The patient himself or
herself or the person, such as a parent, responsible for the patient's health bill
What is a Second Party Payer? - ANSWER-Second Party Payer - The physician, clinic,
hospital, nursing home, or other healthcare entity rendering the care
What is a Third Party Payer? - ANSWER-Third Party Payer - Is the uninvolved
insurance company or health agency that pays the physician, clinic or the other second
party provider for the care or services rendered to the first party (patient)
What are the types of healthcare Reimbursement Methodologies? - ANSWER-Fee-for
service reimbursement and episode-of care reimbursement?
What is a Fee-for-Service reimbursement? - ANSWER-Healthcare payment method in
which provider retrospectively receives payment for each service rendered. A fee is set
amount or a set price. A healthcare organization or fractioned bills for each service
provided on a claim that lasts the fees or charges for each service. People who have
health insurance that reimburses on the basis of fee-for-service have the advantage of
great independence. They are allowed to make almost all health decisions about which
physician to see and about which conditions to have treated. Disadvantage is that they
often have higher deductibles or copayments.
What is a fee? - ANSWER-A set amount or a set price.
Types of Fee-for-Service? - ANSWER-Self-Pay, Traditional Retrospective Payment;
Managed Care Methods
Describe Self-Pay - ANSWER-Self-Pay - Patients or their guarantors (responsible
persons such as parents for children) pay a specific amount for each service received.
Self-insured plan is one in which the employer eliminates the "middle man" the
, employer administers its own health insurance benefits. Rather than shift the risk to a
health insurance entity.
What is a MS-DRG - ANSWER-Medicare refinement to the diagnosis-related group
(DRG) classification system, which allows for payment to be more closely aligned with
resources intensity. Each MS-DRG categorizes patients who are homogenous in terms
of clinical profiles and requisite resources. Each MS-DRG has a payment rate called a
"weight". Weights are relative to one another. Higher weights are associated with
groups in which more resources are need for care and treatment. Lower weights are
associated with groups in which less resource is needed for care and treatment. Higher
weights get higher payments, lower weights get lower payments
What is some of the criticisms of Episode-of-Care Reimbursement - ANSWER-The
impact of the case-based payment method is that it rewards effective and efficient
deliver of health services and penalizes ineffective and inefficient delivery. Some
advocates have noted that the payment method creates incentives to substitute less
expensive diagnostic and therapeutic procedures and laboratory and radiologic tests
and to delay or deny procedures and treatments. Other say the savings associated with
eliminating wasteful or unnecessary procedures and tests and that volume and expense
do not necessarily define quality.
Resource Based Relative Value Scale (RBRVS) - ANSWER-RBRVS is a discounted fee
schedule for Medicare uses to reimburse physicians. The RBRVS is a payment method
that classifies health services based on the cost providing physician services in terms of
effort, practice expenses (overhead), and malpractice insurance. As a schema used to
determine how much money medical providers should be paid. It is partially used by
Medicare in the United States and by nearly all Health maintenance organizations
(HMOs). RBRVS assigns procedures performed by a physician or other medical
provider a relative value which is adjusted by geographic region (so a procedure
performed in Manhattan is worth more than a procedure performed in Dallas). This
value is then multiplied by a fixed conversion factor, which changes annually, to
determine the amount of payment.
The form UB04, What provider use this - ANSWER-Healthcare facilities submit claims
via the electronic format (screen 8371) which replaces the UB-04 paper billing form. The
UB04 claim form is used by facilities rather than physicians for their health insurance
billing. Hospitals, rehabilitation centers, ambulatory surgery centers, clinics, etc need to
bill their services on the UB04 form in order to get paid.
The form CMS1500, What provider uses this - ANSWER-Physicians submit claims via
the electronic format (screen 837P), which takes the place of the CMS-1500 billing form.
The Form CMS-1500 is the standard paper claim form used by health care
professionals and suppliers to bill Medicare Carriers or Part A/B and Durable Medical
Equipment Medicare Administrative Contractors (A/B MACs and DME MACs).
