Question

1. List and discuss the three payment-determination bases.
2. Explain the difference between a specific services payment unit compared to a bundled services payment unit.
3. What are the three major ways that health care providers can control their revenue function?
4. What are the three factors that influence pricing?
5. Why does market share matter to a health care provider?
6. What contract provision will best protect a hospital being paid on a DRG basis for inpatient services from a catastrophic patient?
7. Why should providers seek whenever possible to minimize health plan rate differentials?
8. What can a health care provider vary across different payers?
9. What is the best way to compare hospital costs?
10. What measure(s) is used directly as one of the means of determining the reasonableness of a hospital’s charges?
11. What are the four major activities of a health plan?
12. Explain coordination of benefits.
13. What does a high deductible health plan with a savings option include?
14. What is a withhold feature for payment to health care providers?
15. What promotes the growth of Integrated Delivery Systems?
16. Why are capitation plans more common for physician payments?
17. The James Clinic is an organization of 100 physicians in a variety of specialties. They recently contracted with Prudential Health Plan on a capitated basis to provide all medical services to Prudential's members for the next three years. What would this HMO model be defined as?
18. What provision would a medical group include in its contract with an HMO to receive larger PMPM payments if the HMO members are chronically ill?
19. You are trying to establish a PMPM rate for Primary Care Physicians. Actuarial estimates project 2,500 visits per 1,000 members per year. You have contracted with a Primary Care Medical group at $45.00 per visit with a $5.00 copayment that you will receive. What PMPM rate should you set?
20. An HMO has a Point of Service (POS) option for its members, but will pay only 80% of approved charges. If a member goes out of network for a medical procedure with a charge of $2,000, of which $1,200 is approved, how much must the member pay?
21. A hospital has contracted with an HMO to provide acute care inpatient services for $1,000 per day, subject to a 10% withhold. The proposed budget for inpatient services is based upon expected utilization of 600 days per 1,000 members at $1,000 per day, or $600,000 per 1,000 members. The hospital risk pool will be split equally between the hospital and a primary care physician group. If only 450 days per 1,000 members were utilized in the first year, how much would the hospital be paid per 1,000 members?
22. A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If costs are expected to average $120 per day, what is the maximum utilization of days per 1,000 members that the nursing home can experience before it begins to lose money?

PLEASE answer all of them, the last post- they did not do so. Thank you!

Answer 1

1.   The three payment determination bases are as follows:
Cost base – a system that uses the provider cost as its starting point to determine the payment amount. A cost payment means that the method for the payment is the provider’s cost. The rules and the regulations for determining the costs are in the contract between the healthcare provider and the payer

Price related – provider is paid for the services on the bases of some relationship to total charger or price for the services that are delivered to the patient. Price-related payment means that the provider paid for the services on the basis of some relationship to total price or charges for services that is been delivered to the patient

Fee schedule – Actual payment is unrelated to either provider’s cost or actual prices. A fee schedule means actual payment is predetermined or you can say it is unrelated to the provider’s cost or actual prices.

2.   Bundled service plan of payment has two features, the first one is that the payment to the provider is not related necessarily to list of service provided to the patient. Also, the bundled services have a fixed specified fee per unit of the service. The master price lists are referred to as the charge description masters. Chargers that are applicable to the specific services may also bear no relation to the actual amounts paid.

3.   The three major ways the health care providers can control their revenue function and can also bring a greater flow of cash in the business. Beginning with the first, the health care providers can improve the scheduling process of appointment, and improving the patient’s intake is the best way to ensure that the information collected for the verification of the insurance is complete and accurate. Another way for the improvement of the revenue function is through implementing the audits and checking the completeness of the precision of the charging process. And the last way to support the revenue function of the service provider is complying with the regulations or requirements of payers that are involved.

4.   The factors influencing the price are as follows:

Customers
The most important factor that consumers perceive from the product is that it offers them value. it is the customers who influence the pricing of the product. If the value is not equal to the cost of the product they will go for alternatives or else they will decide whether they can do without that service or the product. So overall the customers are totally responsible for the influence of the price.

Price elasticity
People’s sensitivity to price can change the demand for the products. Let’ say think about the pair of pants with the elastic waist. You can stretch elastic waistband like the one in pants but it is very difficult to stretch waistband of dress slacks. When the consumers are sensitive to the price change they buy more products when the prices are lower and less if the prices are high. Demand for this is price elastic.

Competitors
Competitors' pricing and how they set their prices to have a tremendous effect on the pricing decisions. Let’s say if you want to buy a pair of slippers but the price was 50% less on the other store what could you do? Companies want to maintain loyal customers so they match their prices with the competitor’s price to make sure that they don’t lose their own customers. So competitors influence the pricing.