BHA FPX 4009 Assessment 2 Reimbursement Options BHA-FPX4009 Health Care Reimbursement Systems

 

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Introduction

This paper provides an overview of various reimbursement options in healthcare and explores different payment models. Additionally, it discusses the drawbacks and impacts on reimbursement rates associated with fee-for-service, capitation, pay-for-performance, and resource-based relative value scale (RBRVS) models. Furthermore, this paper evaluates alternative payment options for uninsured patients, including Medicaid, self-pay, and financing options.

Part I – Provider Reimbursement Options

Fee-For-Service

Fee-for-service (FFS) is a reimbursement model where healthcare providers receive payment for each service rendered based on charges or a fee schedule (Rosenthal, 2007). The fee schedule outlines fees allowed by third-party payers for healthcare services (Casto, 2019A). Critics argue that FFS lacks incentives for cost control and may lead to overutilization of services (Casto, 2019A). Providers can increase revenue by offering more services per patient, but reimbursement depends on the complexity of care provided (Fearnley, 2016). While FFS is widely used globally, countries adopt variations based on their healthcare systems and funding sources (Ikegami, 2015). For instance, Canada employs a hybrid model combining social insurance and national health services (Casto, 2019A).

Capitation

Capitation involves fixed payments per person per month (PMPM) to healthcare providers, irrespective of services provided (Casto, 2019A). Providers may avoid high-cost patients to maximize profits under this model (Casto, 2019A). However, predicting reimbursement becomes challenging due to the fixed nature of payments (Fearnley, 2016).

Pay-for-Performance

Pay-for-performance incentivizes quality care delivery through financial bonuses (McKethan & Jha, 2014). It focuses on patient outcomes, processes, and experiences (Mongan et al., 2008). Programs like the Hospital-Acquired Condition Reduction Program aim to improve care quality by penalizing certain conditions (Pay for Performance Reimbursement, 2019). This model aligns with efforts to improve quality while controlling costs (Rosenthal, 2007).

Resource-Based Relative Value Scale

RBRVS reimburses healthcare services based on resources required and service units’ appropriate prices (Casto, 2019B). Implemented in 1992, RBRVS aims to standardize physician payments (DeVries, 2019). Reimbursement is calculated using a formula incorporating relative value units and practice expenses (DeVries, 2019).