NURS 8500-Reimbursement of Claims Discussion 3

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Reimbursement is another term for payment. A provider or facility submits a claim. Then the health insurance company or third-party administrator pays the provider or facility for their claim based on their contract. It sounds simple, but the payment arrangements in healthcare can be complex. As providers do not generally receive full payment for services upon a patient’s receipt of services under a health insurance scheme, reimbursement becomes essential to a provider’s livelihood.

2- Elements of Reimbursement (minimum 100 words)

· Coverage refers to a set of rules that explain when a payer will or will not pay for a product or service. Coverage can vary by payer and depends on what each payer considers to be medically necessary. In general, payers want to see regulatory approval, strong clinical evidence demonstrating the treatment is at least as beneficial as the established alternative, and a demonstration of the treatment’s cost-effectiveness. Payers expect well-designed clinical trials with results published in peer-reviewed journals. Support from the physician community and professional societies are also increasingly important to adoption and coverage of new technology.

· Coding refers to the sets of alphanumeric codes that are the language of billing. Providers use codes to tell a payer what products or services were provided and why. There are three main sets of codes: CPT, HCPCS, and ICD-10-CM. Choosing the right code to accurately describe a product or service while maximizing payment requires a detailed understanding of the coding structures. If no code exists, it is important to understand the approval process for acquiring a new one – whether it be a CPT code used by physicians to describe what is done to a patient, or an HCPCS code which describe products not described by CPT codes. Finally, it is important to understand that choosing the wrong code creates not only financial implications but also legal culpability. Reimbursement of Claims Discussion 3

· Payment is driven by the coding systems and is probably the most complicated element of reimbursement. Although coding drives payment, reimbursement is not quite as simple as just submitting an active code. Payment is driven by complex payment methodologies that differ depending on the site of care where delivery is provided. For example, payment for the same procedure in an Ambulatory Surgery Center (ASC) is often less than payment for the same procedure performed in a hospital outpatient facility.

3- Reimbursement in Saudi Arabia (minimum 100 words)

While the majority of healthcare is paid for by the government, reimbursement of medical services by providers can be seen in the private sector of Saudi Arabia. Now is therefore the best time to intervene and bring in regulation and standardization. The two main vehicles for carrying out reimbursement-related inventions are the aforementioned Central Board for the Accreditation of Health Institutions CBAHI and Council of Cooperative Health Insurance CCHI. The avenues for intervention are many. One avenue is to introduce regulation in chargemasters, building on the drug regulation mechanisms already in place. Another avenue is to standardize the electronic transfer protocol involving providers, insurers, and banks. Other avenues include introducing bundled payments, linking payment to quality, and using DRG-related payments.

Pharmaceuticals and Medical Devices

Even in countries where all healthcare services are covered free of charge, like the United Kingdom and Saudi Arabia, not all items like pharmaceuticals and medical devices receive the same treatment. It should be noted that there is reimbursement to some extent for pharmaceuticals in Saudi Arabia; however, it varies between sectors. For example, drugs covered under the Ministry of Health might not be covered under the Kingdom of Saudi Arabia Ministry of National Guard-Health Affairs. The same is true for private health insurance. Medication pricing is regulated by the Saudi Food & Drug Authority, but a pricing list by the SFDA does not ensure your medication will be reimbursed. In the event your insurance does not cover your medication, you have the option to pay out-of-pocket (Al-Saggabi, 2017).

4- Evaluating Types of Reimbursement

1# fee-for-service (minimum 100 words)

Fee-for service (FFS) is healthcare’s most traditional payment model where physicians and healthcare providers are reimbursed by insurance companies and government agencies (third-party payers) based on the number of services they provide, or the number of procedures they order. Payments are unbundled and paid for separately, so every time patients have a doctor’s appointment, a surgical consultation, or a hospital stay, these third-party payers are billed for each visit, test, procedure, and treatment provided, even though some of these may not be needed, or supported by evidence-based data. Three Types of Fee-For-Service Reimbursement

a) Cost-based Reimbursement (minimum 100 words)

Under this fee-for-service type of reimbursement, the payer agrees to pay the provider for the costs of providing medical services to its insureds. This is limited to allowable costs directly related to healthcare services. Under this method, administrative costs would not be included in the reimbursement (Gapenski & Reiter, 2015).

b) Charge-based Reimbursement (minimum 100 words)

This occurs based on a pre-established rate schedule between the provider and insurer, called a chargemaster or fee schedule. This is a negotiated, predetermined amount usually lower than a provider’s general charge (Gapenski & Reiter, 2015). The positive for this type of payment system is that insurers can better predict costs and encourage patient access to care; however, it can lead to overuse of services and fragmentation of care.

c) Prospective Payments (minimum 100 words)

Under this fee-for-service reimbursement, rates are established by the insurer before services are rendered but are not directly related to costs or fee schedules. These rates can be based solely on the procedure or diagnosis. Thus, more complicated procedures will be costlier. Payments can also be based on a per diem, meaning a facility will be reimbursed a predetermined daily amount for a hospital stay. Bundled rates are a combined payment for an episode of treatment. For example, in a bundled payment scenario, a patient having baby payments for prenatal and postnatal care would pay a single payment for these services (Gapenski & Reiter, 2015). Schedules can have the effect of encouraging providers to issue more services than necessary but gives payers more. A common method in prospective payments includes diagnosis related groups (DRGs). Instead of paying for the actual costs of the medical procedure, the payer expends the amount associated with the DRG. If the hospital expends less than the DRG, then it will make a profit. Reimbursement of Claims Discussion 3

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2# Capitation (minimum 100 words)

This is a different type of payment method that relates only to a covered life, regardless of the services performed. Thus, if patient A received the check-up, skin swab, and MRI, only a set amount would be paid, not each service provided. This payment system generally requires a patient to see a primary care physician before seeing a specialist. The goal of this of payment is to incentivize providers to limit unnecessary services.