Reimbursement In The Health Care Sector
Introduction
The finance department is sensitive in all the sectors of the economy. In the health care sector of the USA, the service providers are regulated by regulations from the state and the federal government. The CMS controls and governs the firms in this industry (Casto & Forrestal, 2013). Financing in this sector is challenging and often requires the introduction of third-party payers to help streamline the flow of resources. To ensure financial sustainability, the health care providers rely on the third party, patients, and the CMS (Forsberg, Axelsson,& Arnetz 2017). Full reimbursement in time helps to ensure efficiency in the performance of firms in the health care industry.
Achievement of full reimbursement often requires the firms in the industry to follow a set of guidelines set by the authorities responsible for compensation. As well, the firms have to act in line with a set of financial principles and strategies that make them liable for reimbursement.
Part 1: Financial Principles and Reimbursement
Reimbursement Strategies
Case rates often are used for infectious disease, and imply the number of cases of the contagious illness over a while as a factor of the population during that period, mostly a population of 100,000 people (Forsberg, Axelsson & Arnetz, 2017). On the other hand, utilization management entails a set of systems that are utilized by or on behalf of procurers of health care benefits to manage health care overheads by impelling patient care decisions. These two concepts are essential in coming up with decisions that are of importance to disease control in the health care sector.
Case rates are of importance in raising the pay for performance incentives to the health care workers. The health care industry often has to face off with infectious diseases and ensure a stop in their spread. During outbreaks, the authorities look at the severity of the disease and give them incentives to professionals in the health care industry to help motivate in their work.
Utilization management similarly integrates prospective, retrospective, and concurrent measures to help determine the pay for performance incentives. It is tied to financial policies that ensure regulations, quality, and risks are risks that are assessed to support the management to take the appropriate course of action. Utilization management thus provides a substantial effect on the determination of the incentives to be awarded to the health workers.
Reimbursement Methods
| Reimbursement Method | Advantages
For Strategic Planning of Operational Performance |
Disadvantages
For Strategic Planning of Operational Performance |
Best Use
(Type of Facility and Why) |
| Accountable care organization | This model helps to provide an unconventional source of income to the health care industry while delivering the required structures and information systems | The model is highly risky to the industry thereby making the doctors mechanical in their work | This method can be of considerable significance to the public health care sector due to its stringent pressure on the delivery by the health care professionals |
| Prometheus payment | It gives physicians bonuses for doing their work efficiently without attaching financial risks to the bonuses | The model does not provide the required infrastructure to make the model work | This model can be best used in the private health care sector, where the resources may not be efficient in providing the necessary infrastructure. Through the model, the professionals in this would use the available support to gain optimal results |
Financial Management Principles
| Financial Management Principle | How It Is Used to Evaluate Operational Performance |
| Strategy formulation | This principle necessitates the formulation of strategies in carrying out tasks. The employees are then appraised based on their ability to meet the set objectives |
| Execution of the strategy | This principle enables appraisal of the employees based on their results and the time taken to achieve such results |
| Accountability | It appraises employees based on their accountability to the results gained. |
Accounts Receivable
Accounts receivables in the health care sector mostly are from payments by the patients. The industry, however, faces challenges during the collection of such payments. Some of the most prominent challenges include the denial of insurance and bad debts. These challenges harm the revenue received by the industry.
Denials of insurance claims contribute mainly to the losses made by the industry. These arise when insurance companies fail to clear up medical bills by denying their cover of the patients in question. Bad debts, on the other hand, arise from failure by the patients to make their payments upon receipt of treatment.
The firms in the health care sector must regularly evaluate their cash flows and days in accounts receivable. Such measures help in planning as they provide the information on the amount of time payment may be due. Monitoring also helps to eliminate errors that may have arisen throughout the process.
Teamwork Principles
| Teamwork Principle Used with Cross-Disciplinary Teams | A Challenge Presented By This Principle and Why |
| Leadership and management | This principle poses the challenge of identification of the best leader from the group which may be hard |
| Proper communication | Gaining coherence involves the connection from the individual level to the group level thus may be hard to achieve due to personality differences |
| Team climate | The team members relationship may be hard to control due to their differences in opinions |
| Clarity of vision | This principle is challenging in the sense that it is not easy to ascertain what is evident. |
Maximizing Reimbursement
The management of the health care sector often reimburses their payers. There is the use of case rate and utilization management in the maximization of such repayments To achieve maximum reimbursement. However, the refunds are not often only determined by these factors but by other factors too.
The reimbursement decision-making process would lead to a decision on how to reimburse. Transparent processes often earn maximum reimbursement. Moreover, the reimbursement process is also affected by patient cost-sharing. Patient cost-sharing limit the effects of innovation in the industry and thus jeopardize the maximization process.
Part 2: Federal and State Payment Systems
Federal and State Regulations
The Patient Protection and Affordable Care Act (ACA) of 2010. The ACA regulation set by the State government to ensure increased access to health care, promote quality, and to improve efficiency. It offers stakeholders opportunities and as well presents challenges to the sector.
Accountable Care Organizations act of 2011. This law enhances the ability of the pharmacies to manage and expand the scope of their activities.
The management in the health care system needs to take a keen look at the regulations as they give the guidelines for which operations are to be carried out. Failure to carry out activities by law may lead to legal problems.
Reporting Requirements
The CMS gov abbreviates Centers for Medicare & Medicaid Services and involves a federal agency in the USA Department of Health and Human Services that administers Medicare programs and works.
The CMS requires reports on the MSP input file, which contains the GHP covered individuals satisfying the criteria of Active Covered Individual. As well, the CMS requires the news on the Non-MSP input file, which entails a list of the prescription drug insurance coverage information for the Inactive covered individuals.
The CMS has added advantage to the health care industry through decreased costs, provision of accredited care, cheaper prescriptions, and availability of extensive in-network providers. However, reporting on the CMS also bears challenges. These challenges include strict approval processes, inability to refer, and lack of specialty in treatment.
Compliance Standards
In ensuring compliance with the CMS guidelines, the health care facility should put into consideration the financial management principles. The principles help to blend and streamline the organization. These principles include accountability and strategy.
Accountability is an integral part of any institution. All the processes should be done in an accountable manner. Responsibility would ensure reimbursement from the CMS is done on time. Also, strategy as a principle is essential for the growth of any organization. To access the CMS, the facility must have policies that are compliant with the CMS regulations.
Government Payer Types
Reimbursement by the CMS requires proper clarity in the activities of the health care facility. There should be no doubt in the processes to get the full rebate. To achieve total compensation, the facility may need to put into place strategies that ensure clarity, for instance, the policy of accountability and transparency of vision.
The processes in the facility should be accounted for entirely. Often financial records have to be checked to ascertain the errors in them. Such accountability enables trust in the system, thus fastening and ensuring full reimbursement. Moreover, facilities need to have more lucid visions in line with the CMS regulations to get their total compensation.
Part 3: Third-Party Payment Systems
Healthcare System Reimbursement
A third-party payer is an entity other than the patient or the healthcare provider that reimburses health care expenses. One of the biggest third-party payers in the US is the Blue Cross. These institutions are essential in the recovery of health care expenses.
The third-party payers are essential in settling the risk of bad debts. The third parties help to resolve the medical bills in case the patients fail to pay them (Henkel & Maryland, 2015). The third parties help to prevent the risk of denial by the insurance companies as they step in to fill such gaps. It is, therefore, evident that the third-party payers have a role to play in the development of the health care sector. Due to such benefits carried by the third-party payers, the health service providers should meet their requirements.
Reporting Requirements
The blue cross is a third party pare in the USA. This payer requires reports to facilitate reimbursement claims. Such statements include the data of the individual patients in question and the health records of such patients. The third-party payers are essential to the health care sector in the sense that they offset the possibility of losses. On the other hand, the payers may be disadvantageous in the fact that they require constant adequate reporting of the entire process.
Compliance Standards
Third-party payers require compliance with set guidelines and procedures in their reimbursement process. Failure to comply with standards leads to delayed reimbursement or even no reimbursements. To ensure such an agreement, health care providers must comply with the financial principles of accountability and strategy.
The service providers must ensure that all the accounting processes in their books are accountable. There should be no questioning of the operations. Additionally, they should ensure that they have the stack to the organization’s strategy to avoid miss expenditure as such may not warrant a reimbursement.
Reimbursement Methods
To be reimbursed by third-party payers, the health care service providers should ensure the accountability and clarity of their operations. Acting on transparency will ensure the reimbursements are earliest and fully paid.
Part 4: Operational and Strategic Planning in Healthcare
Pay-For-Performance Incentives
I would recommend that the organization reassess the current state of affairs. There is a need to re-look at the process in totality To gain a full reimbursement. Reassessing the process will help identify the areas that are not done correctly.
The organization as well would need to understand the reimbursement cycle. The cycle is essential in gaining full and timely reimbursement. This understanding aids to know what is required and the point of its requirement.
Operational Performance Measures
In the health care sector, there are several performance measures—these measures highlight which facilities are performing well and those that are not performing well. In gaining full reimbursement, I would recommend the adoption of performance measures as the retention of patients and the readmission rates of the patients (Kavanagh, Cimiotti, Abusalem & Coty, 2018). These two measures would help the organization to move to greater heights, therefore, gain a full reimbursement.
Teamwork and Strategic Planning
| Collaborative Teamwork Technique | How It Will Help Maximize Reimbursement |
| Proper communication | Communication helps avail required information to the third-party payers impartially thus maximizing reimbursement |
| Encouraged innovation | Innovation leads to improvements in techniques and processes which improve performance, thus maximizing reimbursements. |
Communicating Strategic Planning Across Teams
Communication is essential in all parts of the health care industry. To ensure efficiency and consistency in the flow of information, I would recommend verbal and written methods of communication. Through such means, data can reach all the stakeholders of the organization.
Financial and Reimbursement Strategies
| ++++++++++++ | Cash Flow | Days in Accounts Receivable |
| Recommendation for Low Performing System | Track down the account receivables | Consider an early payment discount for the clients |
| Recommendation for High Performing System | Maintain clear and concise invoices | Consider offering a payment plan |
References
Casto, A. B., & Forrestal, E. (2013). Principles of healthcare reimbursement. American Health Information Management Association.
Forsberg, E., Axelsson, R., & Arnetz, B. (2017). Effects of performance-based reimbursement in healthcare. Scandinavian journal of public health, 28(2), 102-110.
Henkel, R. J., & Maryland, P. A. (2015). The risks and rewards of value-based reimbursement. Frontiers of health services management, 32(2), 3-16.
Kavanagh, K. T., Cimiotti, J. P., Abusalem, S., & Coty, M. B. (2018). Moving healthcare quality forward with nursing‐sensitive value‐based purchasing. Journal of Nursing Scholarship, 44(4), 385-395.
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