Question

Cash Flow Issues

• Explain cash-flow issues relevant to reimbursement of providers.
• Compare the risks to payer and provider of each reimbursement methodology.
• Examine the concept of positive cash flow in relation to claims processing.

Reimbursement issues

• Explain timely payment, with examples.
• Describe recoupment, with examples.
• Examine the concept of difficult economics in relation to a healthcare provider

  

Answer 1

Cash Flow issues:

The biggest issues of cash flow related to reimbursement of providers are in hospitality and medical bill reimbursement cases. Cash payer of medical and hospital bills very difficultly follow long and huge procedures. Medicare services covered by Medicare are usually subject to the establishment of medical necessity. Failure by the providers to establish and document medical necessity for services rendered can result in denied claims, an extended billing and collections process or, in certain circumstances, allegations of fraud.

The risk for provider, there could be a possibility that anyone can make fake bills of hospital and can claim for reimbursement. This is the major issue that currently mediclaim companies are facing.

The risk for payer can be loss or destroy of original bills as for reimbursement original documents are required. If payer lose it then he can't get money which he paid. So payer has huge risk of loss of money,

Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against future financial challenges.

Reimbursement issues:

Most health plans have contracts with hospitals that require billing within 180 days of the date of service. Some self-insured plans allow hospitals to submit their bills for up to a year. There are strict statutes in place to ensure these billing deadlines are upheld. Payers strictly enforce these deadlines, even when no harm is done by a brief delay. In a small number of cases, these contracts obligate the payer to allow for extenuating circumstances. In all other instances, the only recourse for a provider is to pursue legal action. For eg A patient arrives at the hospital and the admitting staff determines she has coverage under Amerigroup, a Medicaid payer (MCO), making it the payer of last resort. However, the patient only presents an Amerigroup I.D. when she is admitted. The hospital performs due diligence and verifies patient eligibility, notifies Amerigroup of the admission and obtains authorization, steps required under the contract. In other words there could be delay in providing proper documents or original bills.

Recoupment is a recovery of expenses; a reduction or withholding for legitimate reasons, of part or all of an owed amount. For e. g. due to some reason of missing documents Provider rejects partial claim and says after submitting missing documents only you will get remaining claim amount. Then payer submitted all missing documents to get remaining amount that process is called as recoupment.

Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and healthcare. In broad terms, health economists study the functioning of healthcare systems and health-affecting behaviors such as smoking. Consumption of alcohol, smoking and other intoxication are the reasons for difficult economics in relation to a healthcare provider.