Reimbursement in healthcare organizations describes the form of payment that a hospital, diagnostic facility, healthcare professional, or other practitioners receive once they have provided healthcare services (Clyne and Jewell, 2019). Mainly, the government pays for its citizens, but for the individuals who can afford health insurance, their insurers cover medical costs, whether in part or full.
In the U.S., the evolution of healthcare reimbursement, from the 1960-to-date, has resulted in a prospective-payment environment where different payment forms like capitation, episode-of-care, global payment, and managed care are used to cover healthcare bills (Harrington, 2021). The prospective-payment system in the healthcare industry allows third parties to understand their expenditure in advance for providing services to their members.
Further, reimbursement in the healthcare organizations allows third-party payers to minimize costs compared to Medicare and Medicaid, depending on the fee-for-service environment. Moreover, the payment allows third-party payers to better plan their members’ healthcare expenses implement a cost-sharing environment where healthcare organizations are responsible for loss and profits (Harrington, 2021). Additionally, reimbursement standardizes healthcare costs that make procedural consistencies among providers in patients’ out-of-pocket costs.
In cases where healthcare services are provided, but no payments are received, third parties will fail their members since practitioners will quit providing the same services. The outcome of such a decision would have a ripple effect on the costs of healthcare services since there would be no reliance on reimbursement. No reliance would translate to procedural inconsistencies as patients will be made to pay for the services from their pockets. The challenges the patients would encounter would be no plan for their healthcare expenses and losses since hospitals will become profit-based-run facilities.
In healthcare, professionals utilize a revenue cycle to track revenue from patients from their initial encounter or appointment to their last balance payment (Clyne and Jewell, 2019). The cycle starts at the point of encounter, follows six more steps, and ends with the practitioner receiving full payment for the services offered. At the pre-registration stage, the medical procedure captures the patient’s demographic and insurance information and real-time eligibility via a clearinghouse (Green, 2022).
The healthcare provider can discuss the patient’s financial expectations, including payment time and canceling or no-show policy. The second stage, registration, is where the patient’s information is solidified and proven to be 100 percent accurate. In addition to collecting the patient’s phone number, address, insurance information, and guarantors, the provider also collects copayments (Clyne and Jewell, 2019). Financial firms and insurance benefits are signed, and patients are assured of an authorization or a referral for their treatment.
The charge capture stage can be automated or conventional, where the patient’s information flows into the practice management billing system. The claim submission stage, the fourth stage, is where practitioners send information to the insurance carrier once the charges have been entered (Green, 2022). The remittance processing stage explains the benefits of the practice in terms of the provided services and payment. During the process, the contractual agreement between the insurance carrier and the practitioner is also provided (Green, 2022).
At stage six, insurance follow-up, where the practice looks at not only the paid services but also for those unpaid. The accounts receivable report reveals everything on the patient’s or insurer’s bucket list for a specific time. The report shows if the insurance breaks their responsibility and why it takes longer for payment to occur (Green, 2022). Patient collections are the last stage where the practice gets money from the patient or third party. To minimize possibility of collection backlog, a standard collection policy for deductibles and copayments must be established.
Departmental Impact on Reimbursement
Given that many healthcare departments rely on reimbursement data, the impact that organizations might face if departments fail to monitor the information is the loss of financial incentives to other institutions due to inappropriate information. Through the revenue cycle, it has been established that it is critical for healthcare departments to countercheck the information provided at the charge capture stage to minimize the possibility of entering false information (Clyne and Jewell, 2019). Departments must write coding charges to prevent the possibility of missing charges. Therefore, the impact healthcare departments might encounter if departments did not monitor the information is lost financial compensation for the services offered.
Data collection is significant for pay-for-performance because it allows for a payment model to provide financial incentives to the practitioners. The value behind effective data collection is the allowance that comes with meeting specific performance measures that are then compensated by reimbursement.
Different departments, portable X-rays and other portable services, ambulance, laboratory, and railroad retirement beneficiary carrier, are part of a healthcare organization. In the portable X-ray and other portable services department, the activity that may impact reimbursement is delivering services to multiple DME MACs, then the permanent address where the patient receives services (Harrington, 2021). The specific data to review in the reimbursement area is the permanent address since the carrier processes the claim through it.
In the ambulance department, the number of ambulances used in transporting the patient is the activity that might impact reimbursement. As such, the data to review is the point of origin and the trip’s final destination. In the laboratory services department, the activity that affects reimbursement is the service area of the laboratory (Harrington, 2021). They reviewed data then became the primary laboratory used in service provision. Lastly, in the department of Railroad Retirement Beneficiary Carrier, reimbursement can be impacted by the number of individuals entitled to the benefits and social security (Harrington, 2021). With the possibility of influencing reimbursement, the reviewed information is the state agency.
The health information management and coding departments ensure that billing and coding policies are complied with. The department affects healthcare organizations’ reimbursement since it is responsible for documenting patients’ information and the insurance program. Therefore, it is the department’s responsibility to ensure the appropriate information is fed to the system to minimize the possibility of presenting false information when receiving compensation for the services provided. Moreover, the department must conduct audits of patient health information to counter any potential misinformation that might result in insufficient data when presenting the data to collect compensation.
At the core of documenting patient information is ensuring every medical record is legible and complete, including the legible identity of the healthcare professional, the patient, and the date of service (Green, 2022). Reimbursement relies on the integrity of medical records, and therefore, the health information management and coding departments must ensure there is no wrong information since they impacts service compensation.
References
Clyne, C. A., & Jewell, B. (2019). Field guide to the business of medicine: Resource for health care professionals. Wolters Kluwer.
Green, M. A. (2022). Understanding health insurance: A guide to billing and reimbursement. Cengage.
Harrington, M. K. (2021). Health care finance: And the mechanics of insurance and reimbursement. Jones & Bartlett Learning.