Question

In: Finance

Compare and contrast the fee-for-service and episode of care reimbursement methodologies. In your response, include the...

Compare and contrast the fee-for-service and episode of care reimbursement methodologies.

In your response, include the following:

  • A description of each methodology.
  • An explanation of the benefits and drawbacks of each.
  • Identify one payment method and describe how the provider would be reimbursed under the payment model. (Examples: fee-for-service and self-pay)

Solutions

Expert Solution

Customarily, there have been three significant types of reimbursements in the medical services commercial center, these include Fee for Service (FFS), Capitation, and Bundled Payments / Episode-Based Payments. FFS and Episode based payments are described below:

Fee For Services

Under FFS repayment, a doctor's income depends exclusively on what procedures they perform. Every "service" a patient recieves would have a relating code with a cost joined. For instance, a 30-minute office counsel, a shot, a urinalysis, an essential metabolic board, all have separate codes and costs joined to them.

Furthermore, what a medical care supplier gets paid for a specific assistance differs relying upon the insurance of the patient accepting the consideration. When managing Medicare or Medicaid the costs per code are chosen by Centers for Medicare and Medicaid Services (CMS). Business (or private) protection frequently sets its costs per code as a percent of the Medicare cost. Medicaid costs are the least, second is Medicare, and maximum is Commercial. Thus, a doctor may get paid three fold the amount of to give precisely the same consideration to a privately insured patient than they would for a patient secured under Medicaid.

FFS repayment approaches are alluded to as "volume-based" repayments, in light of the fact that the essential path for a supplier to build their income is to expand the quantity of services they perform. To be reimbursed, a supplier needs to show that the methods delivered are reasonable to the analysis that are available. There is a likely misalignment of inducements here, where specialists can legitimately accomplish more (and along these lines make more income) in any event, when the extra facilities probably won't be vital or proper for the patient.

The benefits of FFS are as follows:

1. It is relatively flexible, and it works irrespective of the healthcare organisational structure and size.

2. Maintains responsibility for patient care, yet gets restricted to the service a specific doctor can deliver at any point in time.

3. It reassures the delivery of care and maximizes the number of patient visits.

The drawbacks of FFS includes:

1. Offers minimal incentive to deliver effective care or avert needless care

2. Restricted to face-to-face visits and do not allow other means to cater to the patients.

3. The logistics involved are borne by the patients

Episode Based Payments

Episode based payments are also called bundled payments, they are the repayment of medical services suppliers based on anticipated expenses for clinically-characterized scenes of care. These scenes spread a wide scope of conditions from maternity care, hip substitutions, tumor, organ transfers etc. In this way, for instance, in the event that the normal expense for a straightforward hip substitution is $15,000, at that point a supplier would be repaid $15,000 for each hip substitution he performs, despite the fact that some individual medical procedures will be more and some will be less.

This reimbursement method can be glanced as a blend of charge for service repayment and capitation. Suppliers are getting repaid for the different individual techniques required as an aspect of the whole scene of care, yet just for what is relied upon to be required. In the event that a supplier has a more extreme circumstance than is considered in the valuing of the episode, they will be come up short on for the event of care. Thus, similarly as with capitation, it is imperative to consider different seriousness levels of scenes in the valuing. In the event that seriousness is adequately caught in the estimating, the packaged installment approach advances effective consideration, since suppliers can build their income by bringing down their expenses.

Episode based reimbursement have developed in ubiquity all through the execution of Affordable Care Act (ACA). They have been utilized as a system for lessening medical services costs through effectiveness of care. Both Medicare and Commercial payers have indicated enthusiasm for bundled payments so as to lessen costs. Be that as it may, there are difficulties in utilizing this repayment structure viably. The advancement of fitting expected expenses per scene is definitely not a basic exercise, especially for sorts of conditions with wide variety in seriousness and cost, similar to cancer. Getting the cost contrasts directly for different severities of a scene is very testing. Also, not all consideration patients get neatly falls into a "bundle". Also, episode based repayment can be all the more difficult to regulate contrasted with the easier FFS and capitation models.

The benefits of Episode of care reimbursement are:

1. Advances management among several caregivers

2. Flexibility in the care delivery with respect to place and timing

3. Effective management of an episode which includes reduce treatment and fair supervision of costs

4. The billing of logistics are easy as only one bill is prepared

5. Responsibility for care for a specific episode

The drawbacks of this reimbursement method includes:

1. Differentiating the lines between the episodes, defining the boundaries

2. Restrictions in the patience choice regarding choosing the doctor and the geographical area

3. No incentives are provided to reduce the unnecessary episodes.

4.There is no way to avoid the high risk patients who could exceed the average episode payment

Medical providers are paid by insurance or government payers through an arrangement of repayment. After you get a clinical assistance, your supplier sends a bill to whomever is liable for taking care of your clinical expenses. The sum that is charged depends on the services and the settled upon sum that Medicare or your wellbeing back up plan has contracted to pay for that specific help. In the event that you are paying for your medical care using out-of-pocket/ Self Pay, your primary care physician is needed to furnish you with data about the expense of services. Nevertheless, there might be some flighty expenses. For instance, on the off chance that you have a diagnostic test and you might build up a hypersensitivity to the differentiation material. This could require another help—treating your hypersensitive response. The expense of that administration couldn't have been foreseen before your test on the off chance that you didn't think about the hypersensitivity early. In this case the doctor will be paid by your cash in hand.


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