Funding Of Healthcare/ Reimbursement Issues Essay Paper

Funding Of Healthcare/ Reimbursement Issues Essay Paper Funding Of Healthcare/ Reimbursement Issues Essay Paper Pay-for-performance (P4P) is the compensation representation that compensates healthcare contributors for accomplishing pre-authorized objectives for the delivery of quality health care assistance by economic incentives. P4P is increasingly put into practice in the healthcare structure to support quality enhancements in healthcare systems. Thus, pay-for-performance can be seen as a means of attaching financial incentives to the main objectives of clinical care. However, reimbursement is a managed care payment by a third party to a beneficiary, hospital or other health care providers for services rendered to an insured or beneficiary. This paper discusses how reimbursement can be affected by the pay-for-performance approach and how system cost reductions impact the quality and efficiency of healthcare. In addition, it also addresses how pay-for-performance affects different healthcare providers and their customers. Finally, there will also be a discussion on the effects pay-for-performance will have on the future of healthcare. Funding Of Healthcare/ Reimbursement Issues Essay Paper Permalink: https://nursingpaperessays.com/ funding-of-healt…sues-essay-paper / Discussion How Reimbursement Is Affected By Pay-For-Performance Approach Healthcare payers agree with the idea of Evidence-Based Medicine (EBM) to advocate for pay-for-performance in provider reimbursement on quality and efficiency. The fundamental system that most payers use to compensate physicians and provider associations embodies enticements for excellence and efficiency. Reimbursement can be affected by the P4P approach and other factors such as the claims process, out-of-network payments, legislation, audits and denials. While the same P4P approaches are attempts to commence incentives and new strategies into the healthcare, the underlying arrangement of the compensation system produces Funding Of Healthcare/ Reimbursement Issues Essay Paper There are two broad approaches to financing health care: a market-based approach and a government-financed approach. For each approach, answer the following questions: 1. Who is provided access? Most government financed systems are inclined to make available for every person living in the nation with treatment which proposes access to some fundamental level of care. Majority of people pay for coverage through taxes and additional charges. In government financed health care the government may provide care itself such as the United Kingdom or they may contact other providers to do so ex: Germany and Japan or in the United States …show more content… This rewards quantity over quality. Fee for service does nothing to promote low cost, high value services, such as preventive care or patient education even if they could considerably enhance patients’ physical condition and reduce health care costs through the system. 78% of employer sponsored health insurance is was fee for service. Reimbursement is the form of payment for services provided. The most common practice is the insurance company pays to the provider directly. Under the MCO when receiving care the patient is usually required to pay a small amount out of pocket such as 15 or 20 dollars and the rest is picked up by the managed care plan. 4. How does reimbursement apply? Reimbursement is the determination how much to pay for certain services. Reimbursement is costs or repayment for health care benefits. In the United States health benefits are often provided before the payment is made. End result physicians, clinics, hospitals, and other health care contributor establishment request reimbursement for health services provided in addition to expenses incurred. Presently reimbursement of claims for healthcare service depends on the appointment of medical codes to explain the diagnosis.Funding Of Healthcare/ Reimbursement Issues Essay Paper There are two broad approaches to financing health care: a market-based approach and a government-financed approach. For each approach, answer the following questions: 1. Who is provided access? Most government financed systems are inclined to make available for every person living in the nation with treatment which proposes access to some fundamental level of care. Majority of people pay for coverage through taxes and additional charges. In government financed health care the government may provide care itself such as the United Kingdom or they may contact other providers Funding Of Healthcare/ Reimbursement Issues Essay Paper This rewards quantity over quality. Fee for service does nothing to promote low cost, high value services, such as preventive care or patient education even if they could considerably enhance patients’ physical condition and reduce health care costs through the system. 78% of employer sponsored health insurance is was fee for service. Reimbursement is the form of payment for services provided. The most common practice is the insurance company pays to the provider directly. Under the MCO when receiving care the patient is usually required to pay a small amount out of pocket such as 15 or 20 dollars and the rest is picked up by the managed care plan. 4. How does reimbursement apply? Reimbursement is the determination how much to pay for certain services. Reimbursement is costs or repayment for health care benefits. In the United States health benefits are often provided before the payment is made. End result physicians, clinics, hospitals, and other health care contributor establishment request reimbursement for health services provided in addition to expenses incurred. Presently reimbursement of claims for healthcare service depends on the appointment of medical codes to explain the diagnosis. correctly with varied crowds of patients to reduce incentives to keep away from most patients is quite challenging. Finally, the effects pay-for-performance will have on the future of the health care depends on incentives with “teaching to the test” to guarantee that the affirmative objectives are not attained at an enormous price. The Social Security Act of 1965 created Medicare and Medicaid, which provides health care coverage for the elderly, poor, and disabled. Medicare has become the largest single payer health entity spending $57.9 billion in 1980, $271 billion in 2003, and $513 billion in 2010 (Social Security Administration, 2012). Whereas, Medicaid being state funded, its governance is state-specific for spending. There have been very few changes to The United States health care payment system since Medicare’s and Medicaid’s inception, until March 23, 2010 Funding Of Healthcare/ Reimbursement Issues Essay Paper Definition of the problem intended to be solved by legislation/policy The problems (for this paper) with the current reimbursement for patients with Medicare and Medicaid, begins with and depends on how one looks at the problem. Physicians/providers, patients, and payers all have different opinions on what the actual problems are. This graduate nursing student (GNS) identifies these five primary problems. First, the traditional fee-for-service model, that pushes or rewards (financially) quantity of care provided, and deters or punishes quality of care provided seems to be the most pressing issue (Thorpe and Ogden, 2010), as well as, contradicts the premise of the ACA. Second, the reimbursement rates for Medicaid are significantly lower than Medicare and Medicaid dollars spent are matched at the federal level. Depending on the state and service, the difference can be up to 59% lower for Medicaid. (Sommers, Paradise, and Miller, 2011). Third, the looming 24% Medicare cut across the board, that will affect Medicaid too, has been thwarted again by legislation. Fourth, prior to the ACA, physicians were already limiting the number of Medicare and Medicaid patients because of lower reimbursement rates, delayed payments, and non-clinical spent for patient care (not reimbursed) (Sommers, Paradise, and Miller, 2011). Now, only four years after the ACA was passed into law, the number of primary care physicians has decreased by 17% (AHRQ, 2014), creating an even larger dilemma then reimbursements. Fourth, with the above mentioned problems and along with Medicaid expansion (in the states that have chosen to expand) have caused an increase in the number of people eligible. Thus, this creates an even larger bottleneck to prevent access to health care The Department of Veterans Affairs is a prime example of too many patients and not enough resources. Although, the looming 24% Medicare cut required by a law passed in 1997 to reduce Medicare payments to all providers is not addressed by the ACA, this GNS thinks it is vitally important to note that it was just passed by Congress for the 17th time and has become known as doc fix legislation (Peterson, 2014). Funding Of Healthcare/ Reimbursement Issues Essay Paper Finally, the problem with the ACA is not only with what it did address, but with what it did not address in making sure health care is accessible and reimbursed to providers, presumably its stated goal. For example, Medicare will have 140,000 different codes next year for billing that the ACA has not addressed, which is complicating matters. The Economist (May 31-June 6 ) discusses how there are nine codes for injuries related to a turkey encounter (patient struck or pecked, once or multiple times, infection/s as a result, etc…). This GNS mentions this because it is a great example of Medicare’s ridiculousness and an area that the government has ignored and hindered health care’s functionality. Dr. B. Bojewski, D.O. (personal communication, May 23, 2014) reports, providers in all areas of practice,… More and more, the popular press discusses rural hospitals as though they were an “endangered species,” with the implication that the forces leading to their extinction are inexorable. Indeed, the problems facing these institutions do seem at times to be overwhelming. 1 During the 1980s, the declining economy of many rural areas led increasing numbers of young adults to migrate to urban areas. The remaining population served by rural hospitals is becoming poorer, older, and increasingly likely to be covered by public insurance programs. Because of the relatively high proportion of rural hospital patients who are elderly, rural hospitals are particularly vulnerable to Medicare payment policies. Rural advocates argue that current policies are insensitive to the special problems of small hospitals, pointing to reports of widespread financial losses and an increasing number of hospital closures concentrated among facilities with fewer than fifty beds. 2 Some sources predict that as many as 600 rural hospitals could close over the next few years.Funding Of Healthcare/ Reimbursement Issues Essay Paper The problems of rural hospitals have generated a sympathetic response from the media and some members of Congress. 4 Both the 99th and the 100th Congress passed legislation to modify the way in which rural hospitals are paid under Medicare’s prospective payment system (PPS). In the 100th Congress, the National Rural Health Care Act of 1988 was introduced by Rep. Edward Roybal (D-CA) with a wide-ranging agenda for changes in rural health care financing and delivery. Congress also legislated a “transition grants” program, under the sponsorship of Sen. David Durenberger (R-MN). This program, administered through the Health Care Financing Administration (HCFA), provides small grants to rural hospitals to diversify services, convert acute care beds to other uses, and engage in other similar activities. In addition, the Department of Health and Human Services (HHS) has created an Office of Rural Health Policy to coordinate public- and private-sector initiatives on rural health care. Clearly, rural health care delivery, and particularly the viability of rural hospitals, has emerged once again as a high-profile issue for federal health policymakers, although no coherent overall rural health policy has yet been articulated.Funding Of Healthcare/ Reimbursement Issues Essay Paper Stimulated in part by government and private foundation grant programs, rural hospitals have increasingly sought to address their problems through collective action. Many of these facilities have affiliated with a multihospital system. The American Hospital Association (AHA) reports that about one-third of rural community hospitals are owned, leased, or contract-managed by multihospital systems, and that system involvement is heaviest in regions where investor-owned systems are most prevalent (South Atlantic, Mountain, and Pacific). 5 However, this trend appears to have weakened, possibly because of financial losses incurred by these systems coupled with concerns on the part of rural communities that system affiliation can result in a loss of hospital autonomy and reduced hospital sensitivity to local needs. 6 In contrast, rural hospital alliances, or consortia, seem to be gaining in popularity among rural hospitals as a means of obtaining the benefits of collective action, while maintaining a greater degree of local control over hospital decision making. In this essay, we describe rural hospital consortia in the United States and discuss the factors that appear to facilitate or impede their development, using data collected as part of an ongoing evaluation of The Robert Wood Johnson Foundation’s Hospital-Based Rural Health Care (HBRHC) program.Funding Of Healthcare/ Reimbursement Issues Essay Paper While the level of formality of consortium arrangements varies, the primary purpose of all rural hospital consortia is to provide an administrative framework for developing joint activities among member institutions. As the Senate’s Special Committee on Aging (1989) has observed, relatively little is known about the number, structure, and activities of rural hospital consortia or the developmental problems that they face. 7 A 1986 survey conducted by National Health Advisors found nine rural hospital alliances ranging in size from four to twenty-five hospitals. 8 More recently, a staff report to the Senate’s Special Committee on Aging speculated that as many as a quarter of rural hospitals (approximately 650) participate in hospital consortia. Funding Of Healthcare/ Reimbursement Issues Essay Paper In December 1988, we initiated an effort to identify and survey all rural hospital consortia in the United States. We began with a list of 180 consortium applicants to the HBRHC program and added to this number through a phone survey of representatives of each of the fifty state hospital associations. We identified 269 potential rural hospital consortia in this manner. We completed telephone interviews with representatives from 266 of these organizations, resulting in a list of 127 groups of rural hospitals that met our loose definition of a consortium: any group of rural hospitals (or rural and urban hospitals) that meet or work together for specific purposes and have specific membership criteria. The average number of rural hospitals in these consortia was 12.7, with a median participation of nine. If this represented an unduplicated count, it would suggest that 1,600 hospitals nationwide belong to consortia. However, since many rural hospitals participate in more than one consortium, the total number of hospitals participating in consortia is approximately 1,000, or slightly less than half of all U.S. rural hospitals. Clearly, rural hospital consortia have the potential to play a significant role in health care delivery in rural areas.Funding Of Healthcare/ Reimbursement Issues Essay Paper It appears that rural hospital consortia are a relatively recent phenomenon, since 59 percent of the consortia we identified were three years old or younger in December 1988, while only 14 percent had existed for longer than ten years. Twenty-eight percent of the consortia had nonhospital members, and slightly over half listed a hospital located in a metropolitan statistical area as a member. Typically, hospitals in rural consortia retain the option of participating, or not participating, in each consortium activity. The common thread among all such activities is that voluntary cooperation among rural hospitals can yield benefits unavailable to an individual hospital acting alone. For example, while a single rural hospital may not have adequate numbers of patients or resources to purchase specialized equipment, a group of rural hospitals may be able to do so in a cost-effective manner. Thus, a consortium of rural hospitals in the Midwest has purchased magnetic resonance imaging (MRI) equipment jointly. Sharing services of this type can benefit rural hospitals financially by reducing the likelihood that rural residents will travel to urban centers for specialized diagnostic care. It also, of course, improves access to services in rural areas.Funding Of Healthcare/ Reimbursement Issues Essay Paper Joint physician and staff recruitment can be carried out through consortia, since a group of hospitals often can negotiate a more favorable contractual arrangement with a recruiting firm than can a single rural hospital. Consortium members can share advertising costs for allied health personnel and nurses, allowing broader coverage in national journals. In some consortia, shared staff arrangements for allied health and nursing personnel have evolved to address fluctuations in patient census or the need for flexible part-time staff. Consortia can also facilitate the sharing of costs for marketing surveys or community relations campaigns for their members. And, group efforts to improve quality in rural hospitals are now occurring through consortia. Standardized credential review processes and the sharing of a full-time quality assurance coordinator often result from these efforts. Many other kinds of activities are possible under a consortium framework, including management and financial consultation, acute care bed conversions, the development of primary or specialty clinics, lobbying on legislative issues, and regional planning. In our survey, we found that the average consortium was involved in six different types of activities. Four out of five consortia had educational programs for physicians or hospital personnel, and four of five had shared service programs. Two-thirds of rural hospital consortia conducted legislative liaison activities. The least common activities arguably were the ones requiring the highest level of cooperation and trust among participating hospitals: acute care bed conversions and quality assurance. Only one of five consortia reported acute care bed conversion projects, and two of five had joint quality assurance or credentialing efforts.Funding Of Healthcare/ Reimbursement Issues Essay Paper If participation in a hospital consortium proves to be an attractive way for rural hospitals to enhance their financial viability and the quality of the services they offer to their communities, then it will be important for policymakers and hospital administrators to understand the factors that can influence consortium development and implementation. To identify these factors, we conducted structured interviews with consortium directors and hospital administrators at the thirteen HBRHC program sites, approximately four to nine months after they had first received grant funds from The Robert Wood Johnson Foundation. The consortia in the HBRHC program were selected from 180 applications submitted by groups of hospitals and other health care organizations in response to a program solicitation by the foundation. Fourteen consortia were chosen to receive funding of approximately $150,000 per year, with a progress review to occur at the end of two years. The foundation offered a maximum of four years of support, along with access to loan funds not to exceed $500,000 per consortium. One of the selected consortia withdrew from the program early in its first year because it was unable to maintain support among its member hospitals for its only proposed program—a rural health maintenance organization (HMO).Funding Of Healthcare/ Reimbursement Issues Essay Paper. There was considerable variation in regional environments and organizational characteristics among the remaining thirteen consortia. The degree of prior collaboration among hospitals ranged from little or no previous cooperative activities or meetings in some consortia to a highly formalized consortium that had been in existence for ten years. The consortia were administered through state hospital associations, state planning agencies, tertiary care centers, and freestanding consortium organizations. In most cases, the consortium’s governing board was composed of all consortium members, while, in a few cases, the board was composed of a smaller number of appointed members. All consortia had a designated director, although the person designated sometimes had other duties as well. The number of additional consortium staff, beyond the director, ranged from none to over forty.Funding Of Healthcare/ Reimbursement Issues Essay Paper Environmental and demographic characteristics indicate a great deal of diversity among the thirteen consortium sites. The population of their market areas ranged from 44,000 persons in northern Montana to nearly one million persons in South Carolina and in southern Maine. The smallest geographic area included within a consortium boundary was 3,500 square miles (northeastern New York), while the largest was 90,000 square miles (Nevada). Population density was lowest in Nevada, at 1.1 persons per square mile, and highest in western New York, at 119 persons per square mile. The percentage of the population age sixty-five and over ranged from 9.8 percent in South Carolina to 15.4 percent in Missouri, while the percentage of area population living in poverty ranged from 10.6 percent in western New York to 25.3 percent in Alabama. Physician shortages appeared particularly acute in Nevada (sixty-one physicians per 100,000 residents) and Montana (sixty-six per 100,000 residents). Northern Maine, southern Maine, and northeastern New York were the consortium areas with the greatest number of physicians per capita, but they were still below the national average of about 180 patient care physicians per 100,000 population.Funding Of Healthcare/ Reimbursement Issues Essay Paper The HBRHC consortia proposed to pursue a broad range of activities (Exhibit 1 ). Eight consortia intended to develop shared-services programs of some type, while seven planned joint professional recruitment activities. Seven others hoped to develop primary care or specialty clinics through the cooperative efforts of participating hospitals. At the other extreme, only two consortia planned to develop quality assurance programs. The two programs are very different, but they both come under the management of the Centers for Medicare and Medicaid Services. This is a division of the U.S. Department of Health and Human Services. President Lyndon B. Johnson created both Medicaid and Medicare when he signed amendments to the Social Security Act on July 30, 1965.Funding Of Healthcare/ Reimbursement Issues Essay Paper Medicaid is a social welfare, or social protection, program. Data from August 2018 show that it serves about 66.6 million people. Medicare is a social insurance program that served more than 56 millionenrollees in 2016. Medicaid, Medicare, the Children’s Health Insurance Program, and other health insurance subsidies represented 26 percent of the 2016 federal budget, according to the Center on Budget and Policy Priorities. The Centers for Medicare and Medicaid Services (CMS) report that 91.1 percent of the U.S. population had medical insurance in that year. According to the 2017 U.S. census, 67.2 percent of people have private insurance while 37.7 percent have government health coverage.Funding Of Healthcare/ Reimbursement Issues Essay Paper Medicaid makes it possible for many people with a low income to access healthcare. Medicaid is a means-tested health and medical services program for certain individuals and low-income households with few resources. Primary oversight of the program happens at the federal level, but each state is responsible for: establishing its eligibility standards determining the type, amount, duration, and scope of its services setting the rate of payment for services administering its own Medicaid program Each state makes the final decisions regarding what their Medicaid plans provide, but they must meet some federal requirements to receive federal matching funds.Funding Of Healthcare/ Reimbursement Issues Essay Paper Medicaid does not directly provide people with health services. Instead, it reimburses healthcare providers for the care that they deliver to enrolled patients. Not all providers need to accept Medicaid, so it is essential that users check their coverage before receiving care. People who do not have private health insurance can seek help at a federally qualified health center (FQHC). These provide coverage on a sliding scale, depending on the person’s income. Centers must provide specific services, including: inpatient hospital services outpatient hospital services prenatal care vaccines for children physician services nursing facility services for people aged 21 years or older family planning services and supplies rural health clinic services home healthcare for people who are eligible for skilled nursing services laboratory and X-ray services pediatric and family nurse practitioner services nurse-midwife services FQHC services and ambulatory services early and periodic screening, diagnostic, and treatment (EPSDT) services for both children and adults under the age of 21 years Funding Of Healthcare/ Reimbursement Issues Essay Paper States may also choose to provide optional additional services and still receive federal matching funds. The most common of the 34 approved optional Medicaid services are: diagnostic services prescribed drugs and prosthetic devices optometrist services and eyeglasses nursing facility services for children and adults under the age of 21 years transportation services rehabilitation and physical therapy services dental care The program aims to help people in low-income households, but there are other eligibility requirements too. These relate to age, pregnancy status, disability status, other assets, and citizenship. For a state to receive federal matching funds, it must provide Medicaid services to individuals who fall under certain categories of need. For example, the state must provide coverage for some individuals who receive federally assisted income-maintenance payments and similar groups who do not receive cash payments. The federal government also considers some other groups to be “categorically needy.” People in these groups must also be eligible for Medicaid.Funding Of Healthcare/ Reimbursement Issues Essay Paper They include: children under the age of 18 years whose household income is at or below 138 percent of the federal poverty level (FPL) pregnant women with a household income below 138 percent of the FPL people who receive Supplemental Security Income (SSI) parents who earn an income that falls under the state’s eligibility for cash assistance States may also choose to provide Medicaid coverage to other, less well-defined groups who share some characteristics with those above. These may include: pregnant women, children, and parents who earn an income above the mandatory coverage limits some adults and seniors with low income and limited resources people who live in an institution and have low income certain adults who are older, have vision loss or another disability, and have an income below the FPL individuals without children who have a disability and are near the FPL “medically needy” people whose resources are above the eligibility level that their state has set Medicaid does not provide medical assistance to all people with low income and resources. The Affordable Care Act of 2012 gave states the option to expand their Medicaid coverage. In the states that did not expand their programs, several at-risk groups are not eligible for Medicaid.Funding Of Healthcare/ Reimbursement Issues Essay Paper These include: adults over the age of 21 years who do not have children and are pregnant or have a disability working parents with incomes below 44 percent of the FPL legal immigrants during their first 5 years of living in the U.S. Medicaid does not pay money to individuals but sends payments to healthcare providers instead. States make these payments according to a fee-for-service agreement or through prepayment arrangements, such as health maintenance organizations (HMOs). The federal government then reimburses each state for a percentage share of their Medicaid expenditures. This Federal Medical Assistance Percentage (FMAP) changes each year, and it depends on the state’s average per capita income level. The average reimbursement rate varies between 57 and 60 percent. Wealthier states receive a smaller share than poorer states, which can receive up to 73 percent of the money back from the federal government. In the states that chose to expand their coverage once the Affordable Care Act became effective, more adults and families on low incomes became eligible because the new provision allowed enrolment at up to 138 percent of the FPL. In return, the federal government covers all of the expansion costs for the first 3 years and over 90 percent of the costs moving forward.Funding Of Healthcare/ Reimbursement Issues Essay Paper Medicare is a federal health insurance program that pays for hospital and medical care both for people in the U.S. who are older and for some people with disabilities. The program consists of: two main parts for hospital and medical insurance (Part A and Part B) two additional parts that provide flexibility and prescription drugs (Part C and Part D) Medicare Part A, or Hospital Insurance (HI), helps pay for hospital stays and other services. Medicare can help people to access facilities such as walkers and wheelchairs. In the hospital, this includes: meals supplies testing a semi-private room It also pays for home healthcare, such as: physical therapy occupational therapy speech therapy However, these therapies must be on a part-time basis, and a doctor must consider them medically necessary. Part A also covers: care in a skilled nursing facility walkers, wheelchairs, and some other medical equipment for older people and those with disabilities Payroll taxes cover the costs of Part A, so a person does not usually have to pay a monthly premium. However, anyone who has not paid Medicare taxes for at least 40 quarters will need to pay it.Funding Of Healthcare/ Reimbursement Issues Essay Paper Medicare Part B, or Supplementary Medical Insurance (SMI), helps pay for specific services. These include: medically necessary physician visits outpatient hospital visits home healthcare costs other services for older people and those with a disability preventive care services For example, Part B covers: durable medical equipment, such as canes, walkers, scooters, and wheelchairs physician and nursing services certain vaccinations blood transfusions some ambulance transportation immunosuppressive drugs after organ transplants chemotherapy certain hormonal treatments prosthetic devices eyeglasses For Part B, people must: pay a monthly premium, which was $134 per month in 2018 meet an annual deductible of $183 a year, before coverage begins Funding Of Healthcare/ Reimbursement Issues Essay Paper Premiums might be higher or lower depending on the person’s income and Social Security benefits. Enrollment in Part B is voluntary. Medicare Part C, also known as Medicare Advantage Plans or Medicare+ Choice, allows users to design a custom plan to suit their medical needs more closely. Part C plans provide everything in Part A and Part B, but may also offer additional services, such as dental, vision, or hearing. These plans enlist private insurance companies to provide some of the coverage. However, the details will depend on the program and the eligibility of the individual. Some Advantage Plans team up with HMOs or preferred provider organizations (PPOs) to deliver preventive healthcare or specialist services. Others focus on people with specific needs, such as individuals living with

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