Reimbursement Methodologies – Penn Foster Billing & Coding Exam Study Guide
Two types of Healthcare reimbursement methodologies - (ANSWER)1. Fee-For-Service
2. Episode-of-Care
fee-for-service reimbursement system - (ANSWER)reimbursement is based on what services are
provided to the patient.
Self-pay
Retrospective payment
Managed care
Episode-of-care reimbursement system - (ANSWER)payment is based upon services provided for
conditions for which the patient is treated.
There are different situations this reimbursement method applies. Depending upon the specific method,
the unit of time a patient is treated may affect the received reimbursement.
reimbursement is based on the patient's particular condition/illness or a specified time period over
which the patient receives care.
Managed care - capitation
Global payment
Prospective payment
Self-Pay - (ANSWER)Patients without third-party payer coverage or with very restrictive third-party
coverage pay for healthcare services on a fee-for-service basis.
Payment options for self-pay patients vary depending on the policies of the healthcare provider. Some
providers will not see patients who do not have insurance coverage without payment in full at the time
of service. Other providers offer options for monthly payment plans.
,Reimbursement Methodologies – Penn Foster Billing & Coding Exam Study Guide
Retrospective Payment - (ANSWER)Retrospective payment is described as a fee-for-service that is
reimbursed to providers after health services have been given.
payment is based on costs or charges actually incurred for the care of the patient during his or her
healthcare encounter. Payment decisions are made after the costs are incurred (retrospectively).
discounted fee-for-service retrospective payment system - (ANSWER)the third-party payer pays less
than the full price charged for the service. Depending on the contractual agreement(s) between
provider, third-party payer, and patient, the difference between the price charged and the amount paid
by the third-party payer may or may not be passed on to the patient. In other words, the discount
gained by the third-party payer doesn't necessarily have to be passed on to the patient.
Fee Schedules - (ANSWER)
Third party fee schedules - (ANSWER)are a predetermined list of maximum allowable fees for specific
healthcare services. Third-party payers establish a fee schedule that lists all services and the maximum
allowable rate the insurer will pay.
Provider is responsible to bill patient if they want.
explanation of benefits (EOB) - (ANSWER)a document or report sent to the policyholder and to the
provider by the insurer.
The usual, customary, and reasonable (UCR) - (ANSWER)the amount paid for a medical service in a
geographic area based on what providers in the area usually charge for the same or similar medical
service.
UCR reimbursement methodology - (ANSWER)an extension of the fee schedule retrospective
reimbursement system. the balance may or may not be billed to the patient.
Usual: - (ANSWER)Usual for the provider's practice
, Reimbursement Methodologies – Penn Foster Billing & Coding Exam Study Guide
Customary: - (ANSWER)Customary for the community
Reasonable: - (ANSWER)Reasonable for the situation
RBRVS method - (ANSWER)Resource-Based Relative Value Scale
Established in 1992
Resource-Based Relative Value Scale - (ANSWER)the retrospective fee-for-service reimbursement
methodology used by Medicare to determine reimbursement amounts for physician-based services.
RBRVS medicaid - (ANSWER)reimbursement may be based on RBRVS or a modified RBRVS system or
other state-specific reimbursement methodology. Medicaid varies from state to state since Medicaid is a
joint federal and state program
reimbursement system seeks to set reimbursement rates for physician services based on three primary
factors: - (ANSWER)Physician work (effort)
Practice expense (overhead)
Professional liability (malpractice insurance)
Each of these factors is translated into a "relative value unit" and multiplied by a dollar amount supplied
by CMS (Centers for Medicare and Medicaid Services).
each CPT code is assigned a relative value unit
Payments are adjusted for geographical differences.
CMS multiplier - (ANSWER)A set dollar amount in one unit. Example, $38
Two types of Healthcare reimbursement methodologies - (ANSWER)1. Fee-For-Service
2. Episode-of-Care
fee-for-service reimbursement system - (ANSWER)reimbursement is based on what services are
provided to the patient.
Self-pay
Retrospective payment
Managed care
Episode-of-care reimbursement system - (ANSWER)payment is based upon services provided for
conditions for which the patient is treated.
There are different situations this reimbursement method applies. Depending upon the specific method,
the unit of time a patient is treated may affect the received reimbursement.
reimbursement is based on the patient's particular condition/illness or a specified time period over
which the patient receives care.
Managed care - capitation
Global payment
Prospective payment
Self-Pay - (ANSWER)Patients without third-party payer coverage or with very restrictive third-party
coverage pay for healthcare services on a fee-for-service basis.
Payment options for self-pay patients vary depending on the policies of the healthcare provider. Some
providers will not see patients who do not have insurance coverage without payment in full at the time
of service. Other providers offer options for monthly payment plans.
,Reimbursement Methodologies – Penn Foster Billing & Coding Exam Study Guide
Retrospective Payment - (ANSWER)Retrospective payment is described as a fee-for-service that is
reimbursed to providers after health services have been given.
payment is based on costs or charges actually incurred for the care of the patient during his or her
healthcare encounter. Payment decisions are made after the costs are incurred (retrospectively).
discounted fee-for-service retrospective payment system - (ANSWER)the third-party payer pays less
than the full price charged for the service. Depending on the contractual agreement(s) between
provider, third-party payer, and patient, the difference between the price charged and the amount paid
by the third-party payer may or may not be passed on to the patient. In other words, the discount
gained by the third-party payer doesn't necessarily have to be passed on to the patient.
Fee Schedules - (ANSWER)
Third party fee schedules - (ANSWER)are a predetermined list of maximum allowable fees for specific
healthcare services. Third-party payers establish a fee schedule that lists all services and the maximum
allowable rate the insurer will pay.
Provider is responsible to bill patient if they want.
explanation of benefits (EOB) - (ANSWER)a document or report sent to the policyholder and to the
provider by the insurer.
The usual, customary, and reasonable (UCR) - (ANSWER)the amount paid for a medical service in a
geographic area based on what providers in the area usually charge for the same or similar medical
service.
UCR reimbursement methodology - (ANSWER)an extension of the fee schedule retrospective
reimbursement system. the balance may or may not be billed to the patient.
Usual: - (ANSWER)Usual for the provider's practice
, Reimbursement Methodologies – Penn Foster Billing & Coding Exam Study Guide
Customary: - (ANSWER)Customary for the community
Reasonable: - (ANSWER)Reasonable for the situation
RBRVS method - (ANSWER)Resource-Based Relative Value Scale
Established in 1992
Resource-Based Relative Value Scale - (ANSWER)the retrospective fee-for-service reimbursement
methodology used by Medicare to determine reimbursement amounts for physician-based services.
RBRVS medicaid - (ANSWER)reimbursement may be based on RBRVS or a modified RBRVS system or
other state-specific reimbursement methodology. Medicaid varies from state to state since Medicaid is a
joint federal and state program
reimbursement system seeks to set reimbursement rates for physician services based on three primary
factors: - (ANSWER)Physician work (effort)
Practice expense (overhead)
Professional liability (malpractice insurance)
Each of these factors is translated into a "relative value unit" and multiplied by a dollar amount supplied
by CMS (Centers for Medicare and Medicaid Services).
each CPT code is assigned a relative value unit
Payments are adjusted for geographical differences.
CMS multiplier - (ANSWER)A set dollar amount in one unit. Example, $38
