Principles of Healthcare Reimbursement
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| 🇬🇧 | 🇬🇧 |
| ACO (Accountable Care Organization) | Primary care-led physician and hospital organizations that voluntarily form networks |
| Adjudication is the process where | The payer verifies that their billing requirements have been met, and then they determine which services are eligible for reimbursement |
| Per capita means | Per head or per person |
| In capitation (AKA, the capitated payment method), a 3rd party payer reimburses providers based on | A fixed, per person amount for a period (usually a month) |
| PMPM stands for | Per member per month |
| Another term for capitation is | Global capitation |
| In capitation, the volume or intensity of services provided to a patient | Have no effect on the payment |
| Prospective reimbursement methodologies include | Capitation, case rate, global payment, and bundled payment |
| Prospective reimbursement is a payment method where | Providers receive a predetermined amount for all the services they provide during a timeframe |
| The unit of payment in prospective reimbursement is | The encounter, established period of time, or covered life |
| Case-rate methodology is a payment method where | The 3rd party payer reimburses the provider one amount for the entire visit or encounter |
| Case-rate methodology is also known as | Case-based payment |
| Case-rate methodology is most often used for | Inpatient admissions |
| Case-rate payment rates are based on | Historical data about typical costs for patients within a group |
| The global payment method is a payment method where | A 3rd-party payer makes one combined payment to cover services of multiple providers who are treating a single episode-of-care. |
| The global payment method is typically used for | Physician services and outpatient care |
| The contracting unit in the global payment method is | The episode of care |
| In a bundled payment methodology, a predetermined payment amount is provided for | All services required for a single predefined episode-of-care |
| In bundled payment, there is usually a ________ that initiates the episode-of-care. | Trigger, such as a service or onset of a condition |
| 2 criticisms of prospective payment are | 1) this method creates incentive to use less expensive diagnostic tests, therapeutic procedures, etc 2) creates incentive to delay or deny procedures and treatments that are costly |
| Retrospective payment methodologies are methods where payment is based on | Actual resources expended to deliver services |
| Examples of retrospective payment methodologies include | Fee schedule, percent of billed charges, and per diem |
| A fee schedule is based on a | Pre-determined list of fees that a 3rd party payer will pay for certain healthcare services |
| Fee schedule is considered a retrospective reimbursement methodology because | Which services and the volume of services will not be known until after care has been provided |
| 3rd-party payers negotiate reduced fees for their members or insureds in this retrospective reimbursement methodology | Percent of billed charges |
| Third-party payers set per diem rates using | Historical data |
| Per diem rates apply to | Inpatient days |
| Criticisms of retrospective reimbursement methodologies include | 1) few incentives to reduce costs 2) less incentive to order less expensive services |
| Insurance is a system of | Reducing a person's exposure to risk of loss by having another party assume the risk |
| A risk pool is | A group of insureds who have a similar risk of loss |
| The premium is | The amount paid by a policyholder for a certain time period of coverage by an insurance company |
| 3 national models of healthcare delivery are | 1) social insurance 2) national health insurance and 3) private health insurance |
| The social insurance model is also known as | The Bismarck model (originated in Germany) |
| The national health service model is also known as | The Beveridge model (originated in UK) |
| The Beveridge model is characterized as | A government-run model that is a single-payer health system |
| Unlike in the Bismarck model, _________ determines the contribution that workers make to insurance coverage, and the contribution is not based on income. | The private insurance company |
| 3 characteristics that are key to understanding the U.S. healthcare sector are | 1) the size 2) the complexity and 3) the intricate payment methods and rules |
| The inpatient psychiatric facility prospective payment system (IPF PPS) went into effect this year: | 2005 |
| 2 major trends of the U.S. healthcare sector are | 1) healthcare spending is constantly increasing and 2) efforts to reform the healthcare system |
| 3 core problems in the US health system are | 1) excessive cost 2) inequitable or unsafe care 3) lack of access |
| This law designated the code sets for healthcare services reporting to public and private insurers | The Health Insurance Portability and Accountability Act (HIPAA) of 1996 |
| ICD-10-CM was developed by | The National Center for Health Statistics (NCHS) |
| Uses of ICD-10-CM include | 1) collect administrative data on medical processes and outcomes 2) for reimbursement systems and 3) integrating into EHRs |
| ICD-10-PCS is used to communicate __________ to private and public reimbursement systems. | Inpatient procedures |
| The ICD (International Classification of Diseases) was developed by the | World Health Organization (WHO) |
| ICD-10-CM and ICD-10-PCS serve as | The communication vehicle between providers and insurers |
| The ______ Coding Clinic provides additional guidance to be used for ICD-10-CM/PCS | AHA (American Hospital Association) |
| The Healthcare Common Procedure Coding System (HCPCS) is a 2-tiered system of procedural codes used primarily for ________ and __________. | Ambulatory care, physician services |
| The first tier of HCPCS is __________, and the second tier is ____________. | CPT, HCPCS Level II |
| CDMs stand for | Charge description masters |
| CPT is used by | 1) physicians to report services they performed (inpatient and outpatient) and 2) facilities for outpatient services and procedures |
| The CPT was developed and is maintained by | AMA (American Medical Association) |
| Category II codes in CPT are used for | Performance measurement |
| Category III codes in CPT are | Temporary codes that represent new and emerging technologies |
| Failure to have supporting documentation to support code selection and/or modifier selection can lead to | Claim denials and fraud or abuse penalties |
| HCPCS level II is used to report codes for | Supplies, services, and procedures not represented in CPT |
| HCPCS level II modifiers indicate | Body areas |
| This publication gives coding advice for HCPCS level II | AHA Coding Clinic for HCPCS |
| This publication gives coding advice for CPT | CPT Assistant |
| The purpose of the CMS hierarchical condition categories (HCC) model is to | Provide fair and accurate payments while rewarding efficiency and high-quality care for Medicare's chronically ill patients |
| This type of code directly impacts risk scores that are calculated in HCCs | ICD-10-CM diagnosis codes |
| The cooperating parties of ICD-10-CM/PCS are | CMS, AHA, NCHS, and AHIMA |
| This act allows for fines up to $10,000 per violation for Medicare fraud or abuse. | The Medicare and Medicaid Patient and Program Protection Act of 1987 |
| OIG stands for | Office of Inspector General |
| Operation Restore Trust was released in 1995 to | Target Medicare and Medicaid fraud and abuse among healthcare providers and was a major push for accurate coding and billing |
| One provision of this act was that medicare beneficiaries would be educated about their role in preventing and reporting fraud. | The Balanced Budget Act of 1997 |
| Medicare Summary Notices (MSNs) were formerly known as this | Explanations of Medicare Benefits (EOMBs) |
| This act requires all federal agencies to provide an estimate of improper payments and describe how they are combating this. | The Improper Payments Information Act (2002) |
| IPERA stands for | Improper Payments Elimination and Recovery Act (2013) |
| This act strengthened efforts to identify, prevent and recover improper payments | IPERIA (Improper Payments Elimination and Recovery Improvement Act) |
| Medical reviews completed by Medicare contractors to identify improper payments are also known as | Improper payment reviews |
| The purpose of CERT is to measure | Improper payments |
| RACs stands for | Recovery audit contractors |
| Recovery audit contractors carry out provisions of the _______________ Act | National Recovery Audit Program |
| RACs are reimbursed via | A contingency fee based on the amount of improper payments |
| A vulnerability is a | Type of claim that is vulnerable to improper payments, which is a financial risk to the Medicare program |
| RVC stands for | Recovery audit validation contractor |
| CMS uses this type of contractor to ensure accuracy of RACs | RVCs (recovery audit validation contractors) |
| MACs and QICs are | Parties who receive and decide on appeals about claims |