HMP Exam 2 ALREADY PASSED
Methods of reimbursing - =1. Payments made by third party payers to service providers
2.Fee for service
3. Package pricing
4. Resource-based relative value scale
5. Reimbursement under managed care
Fee for service - =Services can be broken down into individual parts
(Exams, blood analysis, etc.) and each service is billed and paid for separately
Original fee for service - =fees were set by providers and Insurers began to limit reimbursements
to an amount that was 'usual, customary, and reasonable'. Providers began to request that patients
pay the difference between the insurance payment and the amount charged (balance bill)
Risk of using original fee for service - =incentive for provider-induced demand and was rarely
used
Still used by some providers (dentists, optometrists)
Package pricing - =Bundled charges, related services are grouped together
One bill for the package of services
For example, obstetrics services
Resource-Based Relative Values Scale - =Services reimbursed based on "relative value" Time,
skill, and intensity of service.
A Complex formula
Medicare developed in 1989
Publishes Fee Schedule every year (geographic area adjusted)
Reimbursement under Managed Care PPO - =Discounted FFS negotiated with network provider
, Reimbursement under Managed Care HMO - =Pay providers salary.
Capitation - provider is paid a monthly rate per enrollee, regardless of whether the enrollee needs
care or not
Removes incentives for provider induced demand
Retrospective Reimbursement - =Traditional way of reimbursing health care services
Reimbursement rates were set after evaluating the costs
Directly related to length of stay, services provided, cost of providing the services No incentive
to control costs
Generally not used any more
Prospective reimbursement - =Costs from previous years are used to determine the amount paid
this year, Pre-established criteria, Used by Medicare Part A since 1983
(4 methods of prospective payment systems (PPS)
DRGs, APCs, RUGs, HHRGs)
Conventional (Indemnity) Insurance - =Fee-for-service payments, Visit any provider/hospital
you want whenever you want (no referrals)
Usually responsible for premiums, deductibles, and coinsurance (80/20) You may be required to
pay for care yourself and be reimbursed by the plan
Managed Care - ="Mechanism for providing health services in which a single organization takes
on the management of financing, delivery, and payment" (Shi & Singh 2011: 206)
Really, it's a set of principles or ways of providing care
Many different kinds of MCOs (HMOs, PPOs, etc.)
Insurance - =Assumes the risks for enrollees
Reimbursement - =Pays providers with capitation, discounted fees, etc
Methods of reimbursing - =1. Payments made by third party payers to service providers
2.Fee for service
3. Package pricing
4. Resource-based relative value scale
5. Reimbursement under managed care
Fee for service - =Services can be broken down into individual parts
(Exams, blood analysis, etc.) and each service is billed and paid for separately
Original fee for service - =fees were set by providers and Insurers began to limit reimbursements
to an amount that was 'usual, customary, and reasonable'. Providers began to request that patients
pay the difference between the insurance payment and the amount charged (balance bill)
Risk of using original fee for service - =incentive for provider-induced demand and was rarely
used
Still used by some providers (dentists, optometrists)
Package pricing - =Bundled charges, related services are grouped together
One bill for the package of services
For example, obstetrics services
Resource-Based Relative Values Scale - =Services reimbursed based on "relative value" Time,
skill, and intensity of service.
A Complex formula
Medicare developed in 1989
Publishes Fee Schedule every year (geographic area adjusted)
Reimbursement under Managed Care PPO - =Discounted FFS negotiated with network provider
, Reimbursement under Managed Care HMO - =Pay providers salary.
Capitation - provider is paid a monthly rate per enrollee, regardless of whether the enrollee needs
care or not
Removes incentives for provider induced demand
Retrospective Reimbursement - =Traditional way of reimbursing health care services
Reimbursement rates were set after evaluating the costs
Directly related to length of stay, services provided, cost of providing the services No incentive
to control costs
Generally not used any more
Prospective reimbursement - =Costs from previous years are used to determine the amount paid
this year, Pre-established criteria, Used by Medicare Part A since 1983
(4 methods of prospective payment systems (PPS)
DRGs, APCs, RUGs, HHRGs)
Conventional (Indemnity) Insurance - =Fee-for-service payments, Visit any provider/hospital
you want whenever you want (no referrals)
Usually responsible for premiums, deductibles, and coinsurance (80/20) You may be required to
pay for care yourself and be reimbursed by the plan
Managed Care - ="Mechanism for providing health services in which a single organization takes
on the management of financing, delivery, and payment" (Shi & Singh 2011: 206)
Really, it's a set of principles or ways of providing care
Many different kinds of MCOs (HMOs, PPOs, etc.)
Insurance - =Assumes the risks for enrollees
Reimbursement - =Pays providers with capitation, discounted fees, etc
