Reimbursement Options

Reimbursement Options

Healthcare reimbursement is essential to access to healthcare services and medicines (Vogler & Panteli, 2018). There are various options for patients to make payments to healthcare providers after receiving their intended care services. Individuals may be directly responsible for their care costs if uninsured or pay for the care costs incurred through health insurance options. This paper discusses the various reimbursement options for both insured and insured patients.

Part I – Provider Reimbursement Options

The healthcare marketplace operates on unusual consumption rules. In other markets, the consumer decides on the products and services to consume and pay for. However, in health care, the health care provider determines the decision of services to purchase and consume. This further gets complicated as the payment to the provider is made using the insurance plan the patient is under. There are different reimbursement options for healthcare providers. These include the fee-for-service, capitation, pay-for-performance, and resource-based relative value scale or case-based.

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Fee-For-Service

Fee-for-service involves the health insurer making payments to the health care provider for the costs incurred by the insured patients based on the quantity of the services received. In this reimbursement option, the fee for the care services must be made regardless of the quality of care provided and patient outcomes. An example is a payment made to a care provider for a minor surgical service, irrespective of whether the patient feels better after the operation. The main drawback of the fee-for-service reimbursement method is that it encourages the inflation of care costs (Meyers et al., 2018). Fee-for-service also restricts the advancement of the value-based care model.

Capitation

The capitation option includes setting a fixed payment to the health care provider. In this case, the insurer pays the care provider per enrolled patient for the length of care provided. The fixed amount is based on the disease, age, location, and gender, among other factors. The set payment is made regardless of whether the enrolled individual seeks care services. Although capitation may be favorable if utilization rates are low, it may be a disadvantage as the utilization rate and cost may exceed the fixed amount (Ehrlich, 2020).

Pay-for-Performance

Utilizing the pay-for-performance option for provider reimbursement involves making payments based on set outcomes of the care provided. It is, therefore, payment for the value and quality of provided care. The main drawback of the pay-for-performance option is that it is tied to the ability to deliver quality services. This may mean lower rates for care providers in low-resource settings, leading to poor care outcomes and patient experiences.

Resource-Based Relative Value Scale or Case-Based 

The resource-based relative value scale reimbursement option views payments to care providers as varying based on the cost of the resources utilized to provide care services. Payments consider provider input, practice expenses, and professional liability insurance. Although the payment option aims to improve the payment system for care providers, it may lead to overutilization of care services and concentration on resources utilized rather than the quality of care and patient outcomes.

Part 2 – Payment Options for Uninsured Patients

Healthcare providers can be reimbursed for care provided to uninsured patients through various payment streams, including public funds such as Medicaid or other individual compensation methods such as available financing options, self-pay, or charity care.

Medicaid

Medicaid is publicly funded, and uninsured patients can qualify for the coverage. The uninsured patient can qualify for Medicaid if they are elderly, come from a low-income family, are pregnant, or live with a recognized disability (Huguet et al., 2019). They must also be residents in the state where they seek care services.

Financing Options

Financing options for uninsured patients depend on their financial well-being against the cost of care received. Patients may opt for healthcare insurance coverage from the marketplace, pay out of pocket for the services, or co-pay for Medicaid or marketplace insurance plans. Patients have the option to bargain for the cost of care received.

Self-Pay

Self-pay is a provider reimbursement option that involves the patient making out-of-pocket payments for the cost of health care services received. Self-pay includes covering all bundled costs of all care services received. The standard self-pay rates are based on the rates utilized by Medicare and other marketplace insurers. However, the total costs are based on service utilization and current out-patient or in-patient rates.

Charity Care

Charity care covers uninsured patients who cannot meet the costs of the health care services they are receiving. The healthcare provider must write off the debt for care services. The provider can be compensated by Medicare or through a tax exemption. However, the patient must be screened based on their family background, citizenship, and income. To qualify the patient for charity care, the process would be found on the current provisions of federal law and other regulations for charity care.

Conclusion

Reimbursement determines access to care and the quality of care provided. This further influences the outcomes of the care provided. Insured patients have a wide range of provider reimbursement options that guarantee access to quality care. However, these payment options have various drawbacks that impact the quality of care provided and care outcomes. On the other hand, uninsured patients may have limited options for provider reimbursement. Uninsured patients may also have difficulties in accessing quality care.

References

Ehrlich, D. B. (2020). KIT – Institut für Volkswirtschaftslehre (ECON) – Workshop on Economics and Finance – Is it wrong to be good? An investigation into potential underfunding of tertiary health care providers under a capitation-based funding system.

Huguet, N., Valenzuela, S., Marino, M., Angier, H., Hatch, B., Hoopes, M., & DeVoe, J. E. (2019). Following Uninsured Patients through Medicaid Expansion: Ambulatory Care Use and Diagnosed Conditions. The Annals of Family Medicine, 17(4), 336–344. https://doi.org/10.1370/AFM.2385

Meyers, D. J., Mor, V., & Rahman, M. (2018). Medicare Advantage enrollees are likelier to enter lower-quality nursing homes than fee-for-service ones. Health Affairs, 37(1), 78–85. https://doi.org/10.1377/HLTHAFF.2017.0714/ASSET/IMAGES/LARGE/FIGUREEX2.JPEG

Vogler, S., & Panteli, D. (2018). Ensuring access to medicines: How to redesign pricing, reimbursement, and procurement? http://www.euro.who.int/en/about-us/partners/

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Patient scenario: Your office sees a new patient for the first time (new patient consults are $500).
As the reimbursement specialist for a large primary care office, he outlines the different reimbursement options to which the practice is subject for the providers in the group.
Support your assertions with at least three academic sources. This may require you to do additional independent research. You may wish to consult the Health Care Administration Undergraduate Library Research Guide before you begin any further research.
This assessment has two parts.

Reimbursement Options

Part 1: Provider Reimbursement Options

Present (at least) the four main reimbursement options your provider would likely have for a new patient consult. Describe the options and comment on potential drawbacks or additional considerations with each model. Also, consider the likelihood and challenges of recouping the entirety of the consult charges for the patient.
Relevant scoring guide criteria:
• Describe drawbacks of the fee-for-service reimbursement model.
• “Describe” means to give an account in words of (someone or something), including all the relevant characteristics, qualities, or events. Describe the drawbacks of the capitation reimbursement model as it relates to providing comprehensive services.
Describe how pay-for-performance impacts reimbursement rates.
Describe how resource-based relative value scale or case-based payment encourages an overuse of services.
Adhere to the rules of grammar, usage, and mechanics.
• “Grammar” refers to the basic rules for how sentences are constructed and how words combine to make sentences (for example, word order, case, and tense).
• “Usage” refers to correct word choice and phrasing, particularly about the meanings of words and phrases.
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• “Mechanics” refers to the correct use of capitalization, punctuation, and spelling.
Apply APA formatting to in-text citations and references.
• Be sure to include a separate references page.

Fee-for-service.
• What is it?
• Consider health care spending and cost control; what are the drawbacks of this model?
Capitation.
• What is it?
• What are the potential drawbacks of this model for the physicians who are driven to provide comprehensive services to their patients? • Pay for performance.
• What is it?
• How does this model impact reimbursement rates?
Resource-based relative value scale or case-based payment.
• What is it?
• How can this model potentially encourage an overuse of services?

Part 2: Payment Options for Uninsured Patients

Identify and explain the potential payment options available to the patient and your care provider if the patient in for the new consult had been uninsured. Also, discuss how a patient could qualify for specific payment options and the rationale for the associated appointment charge.
Relevant scoring guide criteria:
• Explain payment options for uninsured patients, including how the patient would qualify for each option.
• “Explain” means to make (an idea, situation, or problem) clear to someone by describing it in more detail or revealing relevant facts or ideas.
Adhere to the rules of grammar, usage, and mechanics. Apply APA formatting to in-text citations and references.
One potential way to organize this part would be:
Medicaid.
• How does the patient qualify?

• How would the patient be charged? A percentage of commercial contracts or a percentage of Medicare?
• Charity care.
• How would you screen a patient for charity care?
• What process would you implement to qualify a patient for charity care?