Medicare Payment Systems, Coding, Pricing and Billing

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Medicare Payment Systems, Coding, Pricing and Billing

Using the most common office visit, CPT code 99214, determine the reimbursement from the Centers for Medicare and Medicaid Services (online fee schedule available for Medicare).

Medicare: 40%

Medicaid: 10%

Reimbursement from the centers for Medicare and Medicaid services = (40+10)/100 = 0.5

Using the same CPT code, 99214, determine the reimbursement for Medicaid (fee schedules should be available from the individual state).

Medicaid: 10%

Reimbursement for Medicaid = 10/100 = 0.1

Using the same CPT code, 99214, create at least 3 other traditional indemnity insurance reimbursements.

The three-other traditional indemnity insurance reimbursements are self-insurance, private insurance, and fixed annuity insurance.

Assess the information for areas of improved reimbursement of at least 20% or more

The specific area that requires being reviewed in the reimbursement area to establish whether changes were necessary is patient feedback. The patients may give feedback through filling questionnaires or comment cards. The feedback given by patients after receiving the healthcare services may go a long way to suggesting whether changes are necessary for the reimbursement area. This is because the feedback given by the patients is what shows the nature of quality offered by the healthcare providers. If the patient feedback suggests that the services offered were effective and efficient in terms of how well they got satisfied, then this warrants the need for increasing the reimbursement. The vice-versa is also true. A healthcare organization can improve its earnings and reimbursement by streamlining the workflows and processes through revenue cycle management. The process starts when the patient enters the system, all the transactions that lead to the collection of revenues and ends after the facility collects the revenue. The process to implement to ensure that the management of the revenue cycle is effective is scheduling or preregistration, registration, capturing the charges by integrating the patient’s financial and clinical information, coding, making claims from the insurance provider and receiving payments.

Evaluate the options available to change the payer–patient mix with consideration of related legal and ethical issues

First option

The first option to change payer-patient mix is the management of the revenue cycle in the healthcare organization. In the revenue cycle, the first most important department is customer service. This is because, without the customers or patients, the healthcare organization would not exist. The healthcare organization exists to serve the patients and as such, satisfying the needs and wants of the patients is the most important purpose and goal of any given healthcare firm. The customer service department is the one which determines whether the patient will consider the services of a given organization and whether a treated patient may consider the services of that organization next time. This is because the customer service department is the one that handles the patients and hence highly determines the revenue to be made by a given organization.

The second most important department in the revenue cycle in the healthcare organization is accounting and finance department. This is because after the patients have been received by the customer service department, it is the responsibility of the accounting and finance department to handle the payments to be made and how much to be made. The department assesses the costs to be attached to various cost centers. By assessing the costs of various services, the accounting and finance department is able to set the prices to be charged for various services offered to the patients. From there, the finance and accounting department is able to estimate the amount of money to be paid to each and every healthcare provider for the services offered or the input made. In this department, there are certain factors that may lead to fraud. The factors include accounting errors, failure to keep healthcare records, and unclear payment terms. The accounting errors may occur especially when the accountant is not careful. An accountant may intentionally lower the numbers for the amount of money to be paid to a healthcare provider. The aim is to use this money for selfish benefits. This can be prevented by ensuring that there are internal control systems such as internal auditing which ensures no fraud in accounting and finance department. Failure to keep healthcare records well may also bring about fraud. As such, it is important to ensure that each healthcare provider keeps copies of the services he or she has done and present to them to the accounting and finance as prove of the amount to be paid. Unclear payment terms may also encourage fraud. In order to prevent fraud, in this case, the healthcare provider should only work when there is clear agreement with the clients and administration of what payment methods to be used.

The third most important department in a healthcare organization is human resource department. This is a department which assesses the needs of the employees and hence has a lot to do with the general motivation and satisfaction of the personnel. In this case, the healthcare organization will have motivated employees because of the efforts made by the human resources department. This is the department which way assess the need to have the training for the employees of the organization in order to enhance their skills and knowledge. It is important to carry out an assessment to establish what the employee needs to be done in order to remain motivated to their work. The employees require being engaged by the management in order to ensure that they feel appreciated in terms of decision making. This will make them committed to implementing that goals and objectives of the organization.

The other departments such as procurement, IT, etc will act as support departments in ensuring that the patients receive the proper care and that the employees are satisfied.

Second option

The second option would be the utilization of reimbursement data at several departments in the healthcare organization. The utilization of reimbursement data at various departments helps in showing the accountability in terms of how the payment has been done. Ordinarily, the nurses or healthcare employees ought to receive the payment according to the services they have delivered. Therefore, there is need to ensure that the reimbursement is done according to the required data from the human resource department. Internal auditing will be necessary to establish whether the reimbursement impact if attained fully by these departments. This is because the internal audit is done by the internal employees from various departments and hence it is effective. The impact on these departments on pay-on-performance incentives should be measured through comparing the previous performance with the current performance. The aim is to establish whether the incentives have yielded any improvement in the performance of the employees. In other words, the outputs will be measured to establish whether there is any improvement as a result of the incentives given.

The Human Resource Department has the data concerning the employees and it records information about their performance and further training or education. The Customer Service Department collects information about the patients in terms of the services they want to access. This information is used to calculating the revenue gained and it is disseminated to the accounting and finance department. The Accounting and Finance Department uses the data from the customer service as well as human resource departments in order to compute the required reimbursements.

The Quality Assurance Department is the one that is in charge of ensuring that the billing and coding policies are complied with. In this case, the quality assurance department inspects to ascertain that the billing and coding policies, as well as other standards set, are adhered to in order to ensure that quality services are given to the patients and that there is a general satisfaction of all the employees since they are the internal customers.

Third option

The third option is to carry out both billing and reimbursement at the same time. The collection of data by patient access personnel relates to the data collected about the patients in terms of their personal details and the services they wish to seek in the organization. This data is very important to billing and collection process in that it forms the basis of calculating the charges to be placed on the patients and that it can be used for future references. Further, this data may be used to ascertain the need of exceptional customer service where the management will use the data to establish the changing needs and wants of the customers and hence be able to respond by giving exceptional customer services going forward. This will exceedingly enhance the customer satisfaction.

Fourth option

The other option relates to the use of third-party policies to benchmark billing guidelines. The third-part policies may be used as a benchmark when developing the billing guidelines for parties financial services (PFS), personnel as well as the administration. In other words, the management of this organization of this organization may look at the best practices of the third-party policies and consider borrowing some of the aspects in order to strengthen its billing guidelines for PFS personnel and administration. This is because benchmarking allows the organization to gauge how it is performing in comparison to the industry’s best practices. The third-party policies may be assessed to see how the organization may borrow some of the best practices in this area of billing guidelines.

Propose a best strategy with justification and rationale based on effective decision-making tenets

Best strategy with justification

The best strategy is to have effective revenue management. This will ensure that there is effective reimbursement and that the payer-patient mix is done in efficient manner. Revenue cycle management refers to the diverse administrative and clinical functions that assist in capturing, managing and collecting revenues earned after offering services to the patients (Mace, 2017). A healthcare organization can improve its earnings and reimbursement by streamlining the workflows and processes through revenue cycle management. The process starts when the patient enters the system, all the transactions that lead to the collection of revenues and ends after the facility collects the revenue. The process to implement to ensure that the management of the revenue cycle is effective is scheduling or preregistration, registration, capturing the charges by integrating the patient’s financial and clinical information, coding, making claims from the insurance provider and receiving payments.

To ensure that all the needs of a claim are addressed, the steering committee should be composed of leaders from the finance department and any other department that can be affected by the revenue cycle performance.

The effective revenue cycle management will also ensure that there are better healthcare reimbursement methodologies that can be adopted. For instance, the fee-for-service is one of the most healthcare payment methods that are used. This model requires payers to reimburse the provider of healthcare service for each service which is performed. In this case, there is no incentive which is given to execute preventive care strategies, prevent hospitalization, or even take any other related cost-saving measures (Casto & Forrestal, 2013).

Pay-for Coordination is another methodology and it coordinates care between specialists and primary care provider. This coordination of care between a number of providers assist patients as well as their families to manage a unified care plan as well as it may assist decrease wastage in expensive tests and procedures (Casto & Forrestal, 2013).

Pay-for-performance is another methodology and it is commonly referred to as value-based reimbursement environment. In this method, the healthcare providers are only rewarded if they able to meet specific metrics for efficiency and quality (Casto & Forrestal, 2013). As such, developing quality benchmark measures ties reimbursement for physician directly to the quality of care that they can offer.

Bundled Payment, also called Episode-of-Care Payment, is payment for healthcare providers for certain episodes of care like as an inpatient hospital stay (Casto & Forrestal, 2013). This healthcare reimbursement method encourages quality and efficiency of care since there is only a pre-determined amount of money which will pay the entire episode of care.

There are a number of factors which may lead to fraud as well as abuse in healthcare reimbursement methodologies. The factors include accounting errors, failure to keep healthcare records, and unclear payment terms. The accounting errors may occur especially when the accountant is not careful. An accountant may intentionally lower the numbers for the amount of money to be paid to a healthcare provider. The aim is to use this money for selfish benefits. This can be prevented by ensure that there are internal control systems such as internal auditing which ensures no fraud in accounting and finance department. Failure to keep healthcare records well may also bring about fraud. As such, it is important to ensure that each healthcare provider keeps copies of the services he or she has done and present to them to the accounting and finance as prove of the amount to be paid. Unclear payment terms may also encourage fraud. In order to prevent fraud in this case, the healthcare provider should only work when there is clear agreement with the clients and administration of what payment methods to be used.

A healthcare organization can improve its earnings and reimbursement by streamlining the workflows and processes through revenue cycle management. The process starts when the patient enters the system, all the transactions that lead to the collection of revenues and ends after the facility collects the revenue. The process to implement to ensure that the management of the revenue cycle is effective is scheduling or preregistration, registration, capturing the charges by integrating the patient’s financial and clinical information, coding, making claims from the insurance provider and receiving payments.

To ensure that all the needs of a claim are addressed, the steering committee should be composed of leaders from the finance department and any other department that can be affected by the revenue cycle performance. The impacts of these reimbursement systems in physician offices is that physicians are influenced to see as many patients as possible and choose to offer procedures that have the highest reimbursements rate, even in situations where there exists an alternative treatment at a lower cost. The effect of the reimbursement systems on ambulatory surgery centers is that they brought more patients to the centers but affected the quantity of profits made by the centers. The consequences of the systems on outpatient hospital services are that hospitals responded by developing more outpatient services and developing market plans to stay financially viable (Camille, Raffel, & Raffel, 2010).

The benefits of the ambulatory and outpatient reimbursement system are that they allowed more people to access these services and improve the earnings for physicians, thereby improving their motivation.

Rationale based on effective decision-making tenets

The Center for Medicare and Medicaid Services (CMS) said recently that the federal payer programs no longer cover for medical services rendered to treat particular complications of care. In other words, it held that the federal programs are no longer responsible for reimbursing for medical services offered to injuries or complications which patients get at medical facilities (Mattie & Webster, 2008). For this reason, CMS came up with the new rules which would shift the liability to physicians for the injuries or complications that patients get while at their medical facilities. These are events which can be prevented if the physicians exercise due diligence and care. In fact, the advocacy groups call these complications or injuries as “never events” to mean that these events would not occur if the proper evidence-based guidelines are followed.

These rules have required the shift in the patient delivery model because the physicians were required to prove that the injury caused to the patient while at the medical facility occurred in the absence. This is because, under the CMS reimbursement rules, it is held that no patients should come out of the medical facility with added injuries or complications if the physicians followed the evidence-based guidelines (Rosenthal, 2007). This is important in ensuring that the physicians become extremely careful in whatever they are doing. In fact, the CSM argued that injuries or complications that patients may acquire while at a medical facility follow under three categories which are surgical events, case management, and medical products and devices. In this case, there is a shift for the medical facility to ensure that they adhere strictly to the evidence-based guidelines so that they do not become liable for causing injuries or complications to their patients.

In order to ensure that the relationship between the healthcare providers and patients improves, there is need to ensure that there is a win-win situation in terms of the negotiation which takes place in this case. The healthcare providers may consider enhancing their negotiation skills in order o ensure that they are compensated for the quality of services they offer. This can only be possible through a successful negotiation process. Negotiation refers to a process two party’s bargain over something like a contract (John, 2010). This mostly happens in a commercial setting where a business activity is being undertaken, and there is a need for the two parties to come to an agreement.

The order of the key areas of review in for timeliness and maximization of reimbursement from third-party policies players is as follows: customer service, accounting and fiancé, and human resource. In other words, the customer service is the most important area of review since serving the customers well will ultimately lead to the better financial performance. The human resource area is the least important since it only responds to the data collected and processed by the customer service and accounting and finance sections.

The follow-up staff will be through participatory management structure. In this case, there will be a two-way exchange of information which will enhance effectiveness.

The plan for periodic review will involve the following steps: inspection of the set standards, review of the performance standards, checking of the deviations between the actual standards and the actual standards, and taking the strategies to rectify the deviations (for instance, benchmarking).

References

Camille, K. B., Raffel, M. W., & Raffel, N. K. (2010). The U.S Health System: origins and functions. Boston: Cengage Learning.

Casto, A. B., & Forrestal, E. (2013). Principles of healthcare reimbursement. American Health Information Management Association.

John, M. E. (2010). Competitive advantage: creating and sustaining superior performance. New York: The Free Press.

Lewicki, R. J., Saunders, D. M., Minton, J. W., Roy, J., & Lewicki, N. (2011). Essentials of negotiation. Boston, MA: McGraw-Hill/Irwin.

Mace, S. E. (2017). Observation Medicine. Cambridge: Cambridge University Press.

Mattie, A. S., & Webster, B. L. (2008). Centers for Medicare and Medicaid Services'” Never Events”: An Analysis and Recommendations to Hospitals. The health care manager, 27(4), 338-349.

Morgan, G. (2010). Leadership: The Management of Meaning.The Journal of Applied Behavioral Science, 18 (3), pp. 257-273.

Pavlenko, A., & Blackledge, A. (Eds.). (2004). Negotiation of identities in multilingual contexts (Vol. 45). Multilingual Matters.

Rosenthal, M. B. (2007). Nonpayment for performance? Medicare’s new reimbursement rule. New England Journal of Medicine, 357(16), 1573-1575.