Healthcare
Reimbursement Methodologies Test
Questions and Correct Answers
Healthcare reimbursement methodologies breakdown into two primary types: ✅1- Fee-
For-Service, Reimbursement based on: •Services provided to the patient
1.Self-pay
2.Retrospective payment
3.Managed care
2. Episode-of-Care, Patient's condition/illness •A specified time period
1.Managed care - capitation
2.Global payment
3.Prospective payment
Third party payer ✅Entity other than the patient reimburses provider for services
Fee-for-service reimbursement ✅is payment in which providers receive payment for
each service provided, and is a common method of calculating reimbursement.
Examples of fee-for-service reimbursement are self-pay, traditional retrospective
payment, and managed care.
Many insurance plans establish fee schedules and contractual arrangements with
facilities ✅a fee schedule is a predetermined list of fees that the third-party payer will
allow for healthcare services. The allowable fee is the average or maximum amount the
payer will reimburse providers for services.
Retrospective Payment ✅is described as a fee-for-service that is reimbursed to
providers after health services have been given.
Fee-for-service ✅1. Self-pay
2. Retrospective payment
3. Managed care
Retrospective payment ✅Under a discounted fee-for-service retrospective payment
system, 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.
, Third party FEE SCHEDULES ✅predetermined list of maximum allowable fees for
specific healthcare services. The insurance company and provider have a contractual
relationship where the provider agrees to accept the insurer's fee schedule payment as
payment in full. The provider cannot collect the difference from the patient; the provider
collects only the patient's copay (set by the insurance company).
Explanation of benefits (EOB) ✅is a document or report sent to the policyholder and to
the provider by the insurer. This document describes the healthcare services, the cost,
the applicable cost sharing, and the amount that the particular insurer will cover. Any
amount not covered by the third-party payer, would be the responsibility of the patient.
Usual, Customary, and Reasonable ✅The usual, customary, and reasonable (UCR) is
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 is an extension of the fee schedule retrospective reimbursement system.
Usual ✅Usual for the provider's practice
Customary ✅Customary for the community
Reasonable ✅Reasonable for the situation
Resource-Based Relative Value Scale (RBRVS) ✅is the retrospective fee-for-service
reimbursement methodology used by Medicare to determine reimbursement amounts
for physician-based services.
Medicaid reimbursement may be based on RBRVS or a modified RBRVS system or
other state-specific reimbursement methodology.
Resource-Based Relative Value Scale (RBRVS) ✅the RBRVS reimbursement system
seeks to set reimbursement rates for physician services based on three primary factors:
•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
Managed Care ✅- can operate under a fee-for-service model or under an episode-of-
care model.
- Managed care simply means the third-party payer takes an active role in influencing
cost and quality through its policies and provisions.
- A simple example of a managed care policy is pre-authorization
Hmos, or health maintenance organizations ✅- fee-for-service hmos use a
retrospective payment model, type of managed care
- exercise the most control over patient choice and provider treatment options
Reimbursement Methodologies Test
Questions and Correct Answers
Healthcare reimbursement methodologies breakdown into two primary types: ✅1- Fee-
For-Service, Reimbursement based on: •Services provided to the patient
1.Self-pay
2.Retrospective payment
3.Managed care
2. Episode-of-Care, Patient's condition/illness •A specified time period
1.Managed care - capitation
2.Global payment
3.Prospective payment
Third party payer ✅Entity other than the patient reimburses provider for services
Fee-for-service reimbursement ✅is payment in which providers receive payment for
each service provided, and is a common method of calculating reimbursement.
Examples of fee-for-service reimbursement are self-pay, traditional retrospective
payment, and managed care.
Many insurance plans establish fee schedules and contractual arrangements with
facilities ✅a fee schedule is a predetermined list of fees that the third-party payer will
allow for healthcare services. The allowable fee is the average or maximum amount the
payer will reimburse providers for services.
Retrospective Payment ✅is described as a fee-for-service that is reimbursed to
providers after health services have been given.
Fee-for-service ✅1. Self-pay
2. Retrospective payment
3. Managed care
Retrospective payment ✅Under a discounted fee-for-service retrospective payment
system, 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.
, Third party FEE SCHEDULES ✅predetermined list of maximum allowable fees for
specific healthcare services. The insurance company and provider have a contractual
relationship where the provider agrees to accept the insurer's fee schedule payment as
payment in full. The provider cannot collect the difference from the patient; the provider
collects only the patient's copay (set by the insurance company).
Explanation of benefits (EOB) ✅is a document or report sent to the policyholder and to
the provider by the insurer. This document describes the healthcare services, the cost,
the applicable cost sharing, and the amount that the particular insurer will cover. Any
amount not covered by the third-party payer, would be the responsibility of the patient.
Usual, Customary, and Reasonable ✅The usual, customary, and reasonable (UCR) is
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 is an extension of the fee schedule retrospective reimbursement system.
Usual ✅Usual for the provider's practice
Customary ✅Customary for the community
Reasonable ✅Reasonable for the situation
Resource-Based Relative Value Scale (RBRVS) ✅is the retrospective fee-for-service
reimbursement methodology used by Medicare to determine reimbursement amounts
for physician-based services.
Medicaid reimbursement may be based on RBRVS or a modified RBRVS system or
other state-specific reimbursement methodology.
Resource-Based Relative Value Scale (RBRVS) ✅the RBRVS reimbursement system
seeks to set reimbursement rates for physician services based on three primary factors:
•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
Managed Care ✅- can operate under a fee-for-service model or under an episode-of-
care model.
- Managed care simply means the third-party payer takes an active role in influencing
cost and quality through its policies and provisions.
- A simple example of a managed care policy is pre-authorization
Hmos, or health maintenance organizations ✅- fee-for-service hmos use a
retrospective payment model, type of managed care
- exercise the most control over patient choice and provider treatment options
