PRINCIPLES OF HEALTHCARE
REIMBURSEMENT STUDY GUIDE WITH
QUESTIONS AND SOLUTIONS
AHA CODING CLINIC FOR HCPCSAHA CODING CLINIC FOR ICD-10-CM & ICD-10
PCS ✅A publication issued quarterly by the American Hospital Association & approved
by the Centers for MC & MK Services (CMS) to give coding advice & direction for
International Classification of Diseases, 10th Revision, Clinical Modification &
Procedure Coding System( IC10-CM/PCS)
WHY HAVE MANY INSURERS REPLACED RETROSPECTIVE REIMBURSEMENT
METHODS WITH PROSPECTIVE PAYMENT METHODS? ✅The prospective
payment method is an attempt to correct perceived faults in the retrospective
reimbursement method by incenting providers to provide more cost-effective care for a
fixed rate. Thus, the prospective reimbursement method controls costs on a grand or
systematic scale. An episode of care is the health services that a patient receives, for a
specific health condition or illness. During a period of relatively continuous care from a
provider.
ACCOUNTABLE CARE ORGANIZATION ✅Physician and hospital organization that
has voluntarily formed a network to provided coordinated care & to receive a share of
the savings it produces while meeting quality & cost targets
ADJUDICATION ✅The determination of the reimbursement payment based on the
member's insurance benefits.
AFFORDABLE CARE ACT ✅Brief name of pt protection & Affordable Care Act of 2010
as amended by the Health Care & Education Reconciliation Act of 2010. Collectively,
these 2 acts are known as the ACA.
ALLOWABLE CHARGE ✅Average or maximum amount the third-party payer will
reimburse providers for the service.
BUNDLED PAYMENT ✅Reimbursement methodology where a predetermined
payment amount is provided for all services required for a single predefined episode of
care.
CAPITATION ✅Method of payment for health services in which an individual or
institutional provider is paid a fixed, per capita amount for each person enrolled without
regard to the actual number or nature of services provided or number of persons
served.
,CASE RATE METHODOLOGY ✅Type of prospective payment method in which the
third-party payer reimburses the provider a fixed , preestablished payment for each use.
CENTERS FOR MC & MK SERVICES ( CMS) ✅A division of the Department of Health
& Human Services (DHHS) that is responsible for administering the MC program & the
federal portion of the MK program, responsible for maintaining the procedure portion of
the International Classification of Diseases, 10th Revision, Clinical Modification ( ICD-
10-CM). Before, 2001, CMS was named the Health Care Financing Administration (
HCFA).
CHARGE ✅Price assigned to a unit of medical or health service, such as a visit to a
physician or a day in a hospital . See fee.
CLAIM ✅Request for payment, or itemized statement of healthcare services & their
costs, provided by a hospital, physician's office, or other healthcare provider. Claims are
submitted for reimbursement to the healthcare insurance plan by either the policy or
certificate holder or the provider. Also called bills for MC Part A & B, services billed
through fiscal intermediaries, & for Part B, physician or supplier services billed through
carrriers.
DEPENDENT(FAMILY) COVERAGE, ✅Healthcare benefits for spouses, children or
both of the member( enrollee, subscriber, certificate holder) , coverage is dependent on
relationship w/ member. Also known as non single coverage.
EPISODE- OF - CARE ✅The care delivered w/i a defined period of time.
FEE SCHEDULE ✅Third-party payer's predetermined list of maximum allowable fees
for each healthcare service.
FIRST MOVER ✅Initial innovators; other organizations follow trying to obtain success
similar to first organization.
GLOBAL PAYMENT METHOD ✅Method of payment in which the third-party payer
makes one consolidated payment to cover the services of multiple providers who are
treating a single episode of care.
GUARANTOR ✅Person who is responsible for paying the bill or guarantees payment
for healthcare services. Patients who are adults are often their own guarantor. Parents
guarantee payments for the healthcare costs of their children.
HEALTH DISPARITY ✅Population - specific difference in the presence of disease,
health outcomes, quality of healthcare, & access to healthcare services that exists
across racial and ethnic groups.
, HEALTHCARE & EDUCATION RECONCILIATION ACT OF 2010: SEE AFFORDABLE
CARE ACT ✅See Affordable Care Act
INDIVIDUAL (SINGLE) COVERAGE ✅Health insurance that covers only the employee
INSURANCE ✅Reduction of a person's (insured's) exposure to risk of loss by having
another party( insurer) assume the risk.
NATIONAL HEALTH SERVICE( BEVERIDGE) MODEL ✅Method of health systems
financing in which there is a single payer that owns the healthcare facilities, pays the
healthcare providers, and is funded by a country's general revenues from taxes.
PT PROTECTION AND AFFORDABLE CARE ACT OF 2010: SEE AFFORDABLE
CARE ACT ✅See Affordable Care Act 2010
PAYER ✅A payer is an entity that pays for health services, such as an insurance
company, workers' compensation, MC, or an individual.
PAYER MIX ✅Percentage of revenue coming from each type of contracted payer such
as government- based insurance, commercial insurance, and self- paying individuals for
a facility or provider.
PERCENT OF BILLED CHARGES ✅Type of retrospective reimbursement
methodology where the payer negotiates to reimburse the facility or provider a
percentage of the charge amount for a service, supply, procedure or conferment period.
PER DIEM PAYMENT ✅Type of retrospective payment method in which the third party
payer reimburses the provider a fixed rate for each day a covered member is
hospitalized.
PREMIUM ✅the amount of money a policyholder or certificate holder must periodically
pay a healthcare insurance plan in return for healthcare coverage.
PRIVATE HEALTH INSURANCE MODEL ✅Method of health systems financing in
which many competing private health insurance companies exist, collect premiums to
create a pool of money, and pay for health claims of their subscribers.
PROSPECTIVE REIMBURSEMENT ✅Type of reimbursement in which a third party
payer establishes the payment rates for healthcare services in advance for a specific
time period.
REIMBURSEMENT ✅Compensation or repayment for healthcare services already
rendered.
REIMBURSEMENT STUDY GUIDE WITH
QUESTIONS AND SOLUTIONS
AHA CODING CLINIC FOR HCPCSAHA CODING CLINIC FOR ICD-10-CM & ICD-10
PCS ✅A publication issued quarterly by the American Hospital Association & approved
by the Centers for MC & MK Services (CMS) to give coding advice & direction for
International Classification of Diseases, 10th Revision, Clinical Modification &
Procedure Coding System( IC10-CM/PCS)
WHY HAVE MANY INSURERS REPLACED RETROSPECTIVE REIMBURSEMENT
METHODS WITH PROSPECTIVE PAYMENT METHODS? ✅The prospective
payment method is an attempt to correct perceived faults in the retrospective
reimbursement method by incenting providers to provide more cost-effective care for a
fixed rate. Thus, the prospective reimbursement method controls costs on a grand or
systematic scale. An episode of care is the health services that a patient receives, for a
specific health condition or illness. During a period of relatively continuous care from a
provider.
ACCOUNTABLE CARE ORGANIZATION ✅Physician and hospital organization that
has voluntarily formed a network to provided coordinated care & to receive a share of
the savings it produces while meeting quality & cost targets
ADJUDICATION ✅The determination of the reimbursement payment based on the
member's insurance benefits.
AFFORDABLE CARE ACT ✅Brief name of pt protection & Affordable Care Act of 2010
as amended by the Health Care & Education Reconciliation Act of 2010. Collectively,
these 2 acts are known as the ACA.
ALLOWABLE CHARGE ✅Average or maximum amount the third-party payer will
reimburse providers for the service.
BUNDLED PAYMENT ✅Reimbursement methodology where a predetermined
payment amount is provided for all services required for a single predefined episode of
care.
CAPITATION ✅Method of payment for health services in which an individual or
institutional provider is paid a fixed, per capita amount for each person enrolled without
regard to the actual number or nature of services provided or number of persons
served.
,CASE RATE METHODOLOGY ✅Type of prospective payment method in which the
third-party payer reimburses the provider a fixed , preestablished payment for each use.
CENTERS FOR MC & MK SERVICES ( CMS) ✅A division of the Department of Health
& Human Services (DHHS) that is responsible for administering the MC program & the
federal portion of the MK program, responsible for maintaining the procedure portion of
the International Classification of Diseases, 10th Revision, Clinical Modification ( ICD-
10-CM). Before, 2001, CMS was named the Health Care Financing Administration (
HCFA).
CHARGE ✅Price assigned to a unit of medical or health service, such as a visit to a
physician or a day in a hospital . See fee.
CLAIM ✅Request for payment, or itemized statement of healthcare services & their
costs, provided by a hospital, physician's office, or other healthcare provider. Claims are
submitted for reimbursement to the healthcare insurance plan by either the policy or
certificate holder or the provider. Also called bills for MC Part A & B, services billed
through fiscal intermediaries, & for Part B, physician or supplier services billed through
carrriers.
DEPENDENT(FAMILY) COVERAGE, ✅Healthcare benefits for spouses, children or
both of the member( enrollee, subscriber, certificate holder) , coverage is dependent on
relationship w/ member. Also known as non single coverage.
EPISODE- OF - CARE ✅The care delivered w/i a defined period of time.
FEE SCHEDULE ✅Third-party payer's predetermined list of maximum allowable fees
for each healthcare service.
FIRST MOVER ✅Initial innovators; other organizations follow trying to obtain success
similar to first organization.
GLOBAL PAYMENT METHOD ✅Method of payment in which the third-party payer
makes one consolidated payment to cover the services of multiple providers who are
treating a single episode of care.
GUARANTOR ✅Person who is responsible for paying the bill or guarantees payment
for healthcare services. Patients who are adults are often their own guarantor. Parents
guarantee payments for the healthcare costs of their children.
HEALTH DISPARITY ✅Population - specific difference in the presence of disease,
health outcomes, quality of healthcare, & access to healthcare services that exists
across racial and ethnic groups.
, HEALTHCARE & EDUCATION RECONCILIATION ACT OF 2010: SEE AFFORDABLE
CARE ACT ✅See Affordable Care Act
INDIVIDUAL (SINGLE) COVERAGE ✅Health insurance that covers only the employee
INSURANCE ✅Reduction of a person's (insured's) exposure to risk of loss by having
another party( insurer) assume the risk.
NATIONAL HEALTH SERVICE( BEVERIDGE) MODEL ✅Method of health systems
financing in which there is a single payer that owns the healthcare facilities, pays the
healthcare providers, and is funded by a country's general revenues from taxes.
PT PROTECTION AND AFFORDABLE CARE ACT OF 2010: SEE AFFORDABLE
CARE ACT ✅See Affordable Care Act 2010
PAYER ✅A payer is an entity that pays for health services, such as an insurance
company, workers' compensation, MC, or an individual.
PAYER MIX ✅Percentage of revenue coming from each type of contracted payer such
as government- based insurance, commercial insurance, and self- paying individuals for
a facility or provider.
PERCENT OF BILLED CHARGES ✅Type of retrospective reimbursement
methodology where the payer negotiates to reimburse the facility or provider a
percentage of the charge amount for a service, supply, procedure or conferment period.
PER DIEM PAYMENT ✅Type of retrospective payment method in which the third party
payer reimburses the provider a fixed rate for each day a covered member is
hospitalized.
PREMIUM ✅the amount of money a policyholder or certificate holder must periodically
pay a healthcare insurance plan in return for healthcare coverage.
PRIVATE HEALTH INSURANCE MODEL ✅Method of health systems financing in
which many competing private health insurance companies exist, collect premiums to
create a pool of money, and pay for health claims of their subscribers.
PROSPECTIVE REIMBURSEMENT ✅Type of reimbursement in which a third party
payer establishes the payment rates for healthcare services in advance for a specific
time period.
REIMBURSEMENT ✅Compensation or repayment for healthcare services already
rendered.
