1. © 2010 Principles of Healthcare Reimbursement Third Edition Chapter 1 Healthcare Reimbursement Methodologies

2. © 2010 Introduction to Healthcare Reimbursement U.S. Healthcare Reimbursement is Complex Health Insurance –System of reducing a person’s exposure to risk of loss by another party. Health insurance reduces the risk of loss related to health costs –Premium

3. © 2010 Introduction to Healthcare Reimbursement (cont.) Historical Perspectives –Health insurance and employment –Compensation for healthcare (reimbursement) –Third party payment –Characteristics of reimbursement methodologies

4. © 2010 Characteristics of Reimbursement Methodologies (cont.) CharacteristicDescription Unit of PaymentElement that is the basis of payment Time OrientationRetrospective or Prospective Degree of Financial Risk Level of uncertainty

5. © 2010 Types of Healthcare Reimbursement Methodologies Two Major Types –Fee-for-service reimbursement –Episode-of-care reimbursement

6. © 2010 Types of Healthcare Reimbursement Methodologies (cont.) Fee-for-ServiceEpisode-of-Care Self-PayCapitated Payment Traditional Retrospective Payment Global Payment Managed Care* (*some forms) Prospective Payment

7. © 2010 Fee-for-Service Reimbursement Terms –Fee –Charge –Claim Advantages and Disadvantages –Freedom –Higher deductibles and copayments

8. © 2010 Fee-for-Service Reimbursement (cont.) Self-Pay –Guarantor –Situations for self-pay –Self-insured plan

9. © 2010 Fee-for-Service Reimbursement (cont.) Traditional Retrospective Payment –Fee schedule –Allowable fee –Discounted fee-for-service payment UCR CPR RBRVS –Uncertainty for third party payers

10. © 2010 Fee-for-Service Reimbursement (cont.) Managed Care (some forms) –Features –Purposes –Forms –Criticisms

11. © 2010 Episode-of-Care Reimbursement Definition Description –Particular health condition or illness –Period of relatively continuous care from a provider

12. © 2010 Episode-of-Care Reimbursement (cont.) Capitated Payment Method (Capitation) –Per capita –Per member per month (PMPM) –Advantages and disadvantages

13. © 2010 Episode-of-Care Reimbursement (cont.) Global Payment Method –Combined payment –Block grant –Total episode-of-care payment rate

14. © 2010 Episode-of-Care Reimbursement (cont.) Prospective Payment Method –Predetermined rate Per-diem Case-based –Criticisms

15. © 2010 Future Trends in Healthcare Reimbursement Federal Healthcare Initiatives –Healthcare Reform –Use of Information and Communication Technologies Universal Healthcare Coverage Physician Care Groups Refined Case-based Payment Case-Mix Adjustment Models