Centers for Medicare and Medicaid Services Reimbursement Strategies
The Centers for Medicare and Medicaid Services (CMS) is responsible for health insurance coverage to aproximately100 million people via Medicaid, Medicare, the Health insurance marketplace, and the children’s health insurance. The main agenda of CMS was to modernize and strengthen the healthcare system of the United States. It was also aimed at improving the quality of healthcare while reducing costs. In 2011, CMS developed a reimbursement strategy known as value-based purchasing to help revamp the payment processes for healthcare services. The strategy proposes incentive rewards for acute care hospitals based on the quality of care being provided in the inpatient setting. Additionally, the strategy has improved in documentation and application of evidence-based practice. As a result, this ensures accountability among healthcare professionals and also eliminates medical errors.
Despite the outlined benefits of value-based purchasing in the healthcare system, the implementation of the strategy has been successful but not fully due to some challenges. According to Hong et al. (2020), healthcare practitioners feared the value-based purchasing strategy claiming that the big hospitals would not be fairly awarded at the expense of hospitals that previously underperformed. Others also thought that value-based purchasing would not have an impact. This, therefore, discouraged the adoption of value-based purchasing. The study, however, reports that the value-based purchasing program has positively impacted the hospitals that were previously underperforming. The study also shows that the operation outcomes of the hospitals that adopted the program have increased the quality of healthcare accountability and healthcare data. On the other hand, the study by Lee et al. (2020) shows that the value-based purchasing program has not caused a meaningful impact and that it may negatively affect hospital safety. For this reason, it recommended a comprehensive adjustment of the program to encourage adoption.
I work at Druid City Hospital in Tuscaloosa as a revenue cycle manager. It is, however, difficult to access reimbursement strategies for the hospital. Nonetheless, two different reimbursement strategies can be applied. Firstly, the fee-for-service reimbursement model proposes that healthcare providers pay for each of the services they offer. This model proposed fees for each service, and the healthcare workers were to submit financial claims to the insurance companies for reimbursement. The total amount to be reimbursed was determined by simply multiplying the service fees by the proposed rate for the service. The benefits of this strategy included a clear payment structure, a direct correlation of the reimbursed amount to the service provided, and flexibility as the healthcare providers were given the freedom to determine the services to provide (Wei, Wang & Zhai, 2023). Compared to value-based purchasing, this model was not focused on the outcome of the patient as it focused on the quantity of the service provided rather than the quality,
The second strategy is the bundled payment, also called an episode-based payment. This model involves reimbursement based on the period or the episode the service is provided. The model recommended paying for the services cumulatively rather than paying for individual services. The purpose of this model was to encourage healthcare providers to practice efficiently and focus on the quality of the healthcare services provided (Wei. Wang & Zhai, 2023). This model has greatly improved care coordination, improved the quality of healthcare services, and reduced the cost of healthcare.
References
Hong, Y. R., Nguyen, O., Yadav, S., Etzold, E., Song, J., Duncan, R. P., & Turner, K. (2020). Early performance of hospital value-based purchasing program in medicare: a systematic review. Medical Care, 58(8), 734-743. https://doi.org/10.1097/MLR.0000000000001354
Lee, S. J., Venkataraman, S., Heim, G. R., Roth, A. V., & Chilingerian, J. (2020). Impact of the value‐based purchasing program on hospital operations outcomes: An econometric analysis. Journal of Operations Management, 66(1-2), 151-175. https://doi.org/10.1002/joom.1057
Wei, D., Wang, Y., & Zhai, Y. (2023). The Impact of Reimbursement Policy on the Competition between Public and Private Hospitals: Fee-for-Service vs. Bundled Payment. https://aisel.aisnet.org/pacis2023/175a:link {text-decoration: none;}a:visited {text-decoration: none;
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Question 
Apply concepts of financial accounting within the health care industry 598.
Reflect on the following in a minimum of 500 words:
The Centers for Medicare and Medicaid Services (CMS) implemented a new approach to reimbursement, which started in 2011 and is called value-based purchasing. The goal was to reduce the amount of CMS payments overall and to tie patient satisfaction and quality goals to reimbursement. Has this shift in reimbursement strategy been successful? Why or why not?
Centers for Medicare and Medicaid Services Reimbursement Strategies
Health care organizations must opt in to accept payment from Medicare and Medicaid, and payment from private insurance companies usually requires a negotiated contract, with reduced reimbursement rates. What is the reimbursement strategy for your own organization? If this information isn’t available to you, research and explain 2 different reimbursement strategies.