Insurance payments are basically made under four methods: Fee-for-Service Payments, Episode-of-Care Payment, Visit Payments or Per Diem, and Capitation Payments. Any medical office that is subscribed to the above methods requires a deep insight on their dispensation. The quality custom essays concept is essential within financial management strategies of any medical office. Per-episode payment plan, also referred to as case rates, involves making payments for all services dispensed over a given episode of care which would extend for several days or visits. The case implies that all the care received by a patient over this period is covered by a single payment. Episode remittances usually apply on ambulatory surgical processes, hospital inpatient visits or emergency room visits. Per diem remittance process takes place when an insurance imbursement is made to the medical office upon every appointment. These payments are based on a predetermined amount with no regard on the amount of time a physician spends providing treatment or the range of services received by a patient within a visit. Per diem imbursements may involve services such as skilled nursing and inpatient calls. Capitation remittances, are set monthly sums that a medical entity gets per patient. The amount is constant irrespective of patient calls made in a month or the total expenses incured. This payment plan is common with state medicaid initiatives. This method is widely embraced as the most effective way of reducing costs while promoting preventive care. The ordinary compensation system is fee for service. In this plan the medical office receives an amount set for each unit of service delivered. With this kind of plan, the medical agency will receive highest compensation with each care event.
Healthcare being like any other commodity is subject to limited resources. But unlike other commodities, the conventional supply and demand force do not satisfactorily carry out the distribution. Since consumers would not be able to foresee their future healthcare costs, health insurance comes in as a third party to spread risks, much as it is with other industries in the property sector. Contrary to property insurance, the maximum payout to health insurance customers is subject to ambiguity. While the pricing strategies employed display a close tally to the potential risks identified through medical assessments, a multi-level interaction between patients, doctors, hospitals and insurance providers complicates the entire process of determining the cost of healthcare.
Health insurance payers operate various payment reimbursement plans, the entry point usually being the contract between these payers, individual practices and health systems. The reimbursement system can get highly complex from the governing rules which may frequently change under government provisions from the angle of both a regulator and a payer. Renegotiation of contracts also being possible within the system presents another angle of flexibility. The price for service is not usually at the retail level. Payers generally have a “maximum allowed payment” for a given CPT code that marks the entry point into determining the amount of payment. Further adjustments would be made on the maximum allowed payments in form of “claim edits” that would exclude other services from the payment plan, and “payment rules,” which would often reduce payments for some services. Other than private payer influence stands the government, a sole player in the reimbursement plan, both as a regulatory arm and as a payer through the Medicaid plan. The government basically sets an overall benchmark for the private payers which has a ripple effect in the entire pricing structure.
Other payment methods have been equally employed in efforts to cut complications, infections and readmissions but episode-of Care payment plan tops the list of the most effective payment plan that seeks to optimize both clinical and business results rather than maximization of the process steps. While the degree of improvement will vary across the mentioned payment plans, a shift of focus by the provider to the cumulative result of individual contribution will certainly open way to better performance of the health care system. Bundled payment stands to be an ultimate tool of alignment between payers and providers that would eliminate some of the unnecessary financial incentives that would result to a fractured inefficient care. The idea points out the fact that providers and payers, having aligned themselves with appropriate incentives, will give way to a health care system that enables consumers to choose quality and cost-effective options suitable to their medical needs.