Question

The three types of revenue sources you will cover are the following:

• Medicaid.
• Medicare.
• Managed Care.

For each of the revenue sources, you must do the following:

• Explain the purpose of the program.
• Analyze the process of reimbursement for health care organizations.
  • What steps must be taken in order to receive reimbursement for services?
  • How complicated is each step?
  • What kind of information is required from the organization?
  • How long does it take to receive reimbursement?
• Explain the benefits of the program for both patients and health care organizations.

Answer 1

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Introduction:

In the area of healthcare companies, with few exceptions, are often reimbursed for their services rendered by health insurers. Medicaid, Medicare, and Managed Care are three forms of federal health insurance programs that provide revenue to healthcare organizations. The aim of this lecture would be to offer a concise description of the functions of each of those sources of income, describing the mechanism of repayment for each source.

Medicaid:

Purpose of the program: Medicaid 's aim is to provide the low-income community with health services that can be classified into four subdivisions: low-income mothers and children's families, medical costs for non-Medicare low-income older persons, low-income disabled individuals, and institutionalized elderly nursing home costs.

Reimbursement Process:Medicaid operates on a service model contract which ensures that the medical assistance system of the states charges to the providers a fixed amount for the medical services rendered. For the services rendered, facilities must first fill out a State application form and multiple codes must be inputted. However, the procedure is not that difficult, the form must be filled out properly as well as the codes entered properly, or the facility will not be reimbursed for the services. You will enter the following codes:

(i) Codes ICD-10: reference codes assigned to patient treatment and procedures.

(ii) Place of service codes: codes designating the location of treatment a individual has received.

(iii) Healthcare Common Procedure Coding System (HCPCS) codes: source, supplier, and drug type codes.

(iv) New Code of Procedural Terminology (CPT): a subset of HCPCS standards defining and classifying surgical practices and facilities.

Receiving Reimbursement: Medicaid requires up to 90 days to approve a application, but applications can take longer to process as both state and federal requirements must be enforced. As stated earlier, insurance forms and tags need to be filled out properly or facilities do not obtain reimbursement and will need to amend and re-submit insurance to be reimbursed.

Benefits of Medicaid: Since Medicaid offers care to people of low-income families, which allows certain patients to be compensated for medical facilities and treatments that usually may not be able to afford health insurance. In certain situations, having health insurance can mean for certain people the difference between life and death because people can opt not to receive medical attention because they do not have health insurance which may be negative. Medicaid further supports health care providers by encouraging low-income patients to be cared for and also earning insurance reimbursements. This might have significant financial consequences for the company if organisations such as hospitals had some low-income customers and were unable to account for their care bills.

Medicare:

Purpose of the program: Medicare is a government health benefit plan covering people 65 years of age and over, some elderly people and those with end-stage renal disease.

Reimbursement process: Medicare functions as a single-payer healthcare system paying out insurance companies on behalf of the patients enrolled in their program. The procedures for seeking reimbursement are identical to Medicaid's in that hospitals need to fill out a application form and enter the same codes, but the procedure is more complex due to the different sections of Medicare that are:

(i) Part A: medical benefits (inpatient services), hospitals are expected to complete a form UB-04 or CMS-1450.

(ii) Part B: medical (outpatient) insurance, facilities must fill out a CMS-1500 form.

(iii) Part C: provided by private insurance providers, covering anything protected by sections A and B with the option of additional benefits. For Part C, premiums are distributed by a private insurance company.

(iv) Section D: prescription drug coverage where personally made claims are relayed.

Receiving reimbursement: Medicare usually reimburses a payment within 30 days but similar to Medicaid, that may prolong the repayment process if the forms and codes are not right.

Benefits of Medicare: Normally, more medical attention is required as patients age. Medicare benefits these patients with increasing medical requirements , providing them with health insurance. In the same way, the only disease-specific coverage offered by Medicare is the Medicare ESRD programme. The cost of ESRD care was first important, and since the system was introduced in 1972, it has saved hundreds of thousands of lives. Unlike Medicaid, Medicare provides health insurance by offering preventive coverage for the patients so that financial compensation facilities will remain financially viable. Medicare also covers the services rendered by the patients.

Managed Care:

Purpose of program: Managed care offers insurance coverage to Beneficiaries by contract providers with Medicaid programs and managed care organizations (MCOs) who approve a charge per membe /per month, or capitation.

Reimbursement process: For managed care, the state charges a capitalized fee to the MCO company (a charge per member / month), irrespective of the services rendered. The company or supplier arranges benefits provided by program holders at a fixed prepayment fee at specified health care. That MCO arrangement can be complex and will make the repayment process more difficult. Contracts that determine treatment rates by resource utilization group (RUG) ratings, which diagnostic codes are permissible, how many days are called co-pay days for the patient, whether specific benefits are provided by the base rate and whether may be paid individually or not at all, and whether pre-authorisation or re-authorisation is required. To seek compensation, it is important to consider each contract and what diagnosis codes may be omitted in such contract. There are four Health Maintenance Organization (HMO) models which use MCO contracts:

(i) Community model: The HMO pays for care in a single area with a consortium of doctors at a fixed fee per patient.

(ii) Personal medical arrangement (IPA) model: the HMO agrees to deliver insurance at a fixed rate with a private practice provider or healthcare organization.

(iii) Network model: The HMO operates in a network of coordinated referral practices with a number of classes of doctors and other providers.

(iv) Staff model: doctors are paid by the HMO with a compensation agreement who solely offer services for enrolled individuals.

There are three health care service plans:

(i) Organization of preferred providers (PPO): Arrangements are negotiated with medical care providers and the benefits of patients are considerably greater with the care provided by preferred providers.

(ii) Special provider association (EPO): A program that only offers coverage if the patient receives services through a particular network.

(iii) Point-of-service program (POS): The customer may opt to provide the treatment from a participating or non-participating provider with varying rates of value associated with each.

Receiving reimbursement: Like Medicaid, it may take up to 90 days for claims to be refunded. Again, as with Medicaid and Medicare, forms and codes must be correctly filled out to receive reimbursement or the process may take longer to complete.

Benefits of managed care: There are many drawbacks of use health care for patients. First, it reduces healthcare costs by the development of a provider network, without compromising quality of care. In fact, patients are not required to stay in the network and are free to try out-of-network service services who will maximize the pace at which one provides treatment. Finally, managed care facilitates better collaboration between networked services that enhances enhanced patient treatment and care because patients do not need to make copies or require physicians to view their medical history. Managed treatment is valuable for hospital institutions because of the decreased costs. By partnerships that are created with various types of MCOs, states can minimize Medicaid system costs and help coordinate the utilization of health care across the developed networks.

Conclusion:

Medicaid, Medicare, and coordinated health care are three types of public health insurance systems that each have their benefits and drawbacks. -- plan has a payment procedure requiring mainly the filled out of application forms and the submission of diagnosis and care codes. If these are not properly completed the reimbursement process will be delayed for each program. Overall, these three programs have several benefits for both patients and health care organizations and work towards reducing the cost of health care while still allowing organizations to receive reimbursement for their services.

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