Reimbursement for Services
There are a number of different options for determining how
to charge for services provided at a health care organization. In
the case-based service approach, one set fee covers an entire
procedure. For example, if you needed knee replacement surgery, the
fee would include preliminary visits, the surgery, and follow-up
visits. However, in a fee-for-service approach, every different
step would incur a separate cost. The reimbursement approach taken
has significant ramifications for how care is provided.
To prepare:
Review the information in this week’s Learning Resources
focusing on reimbursement for services. How are these approaches
the same or different in your own setting?
Identify an example of a fee-for-service approach and a
case-based service approach.
Reflect on the benefits and limitations of each approach.
Review the article, “Which Health care Payment System is
Best?” and examine the additional reimbursement strategies
described. Consider the viability of these alternative strategies
within your own organization (or one with which you are familiar).
Examine how the nurse-to-patient ratio is affected by the
payment approach used and consider how this can impact quality of
service.
By Day 3
Post an example that illustrates the difference between a
fee-for-service payment and a case-based service payment. Explain
the benefits and limitations of each approach. Assess the viability
of utilizing, within your own organization (or one with which you
are familiar), the two alternative reimbursement strategies
described in “Which Health care Payment System is Best?” Analyze
how the nurse-to-patient ratio is affected by the payment approach
selected and how these impact quality of service.
Required Readings
Baker, J. J., Baker, R. W., & Dworkin, N. R.
(2018). Health care finance: Basic tools for
nonfinancial managers (5th ed.). Burlington, MA: Jones and
Bartlett Learning.Chapter 7, “Cost Classifications” (pp.
55-61)In this chapter, you focus on the difference between direct
and indirect costs and why it is crucial for financial managers to
understand the difference.Chapter 8, “Cost Behavior and Break-Even
Analysis” (pp. 65-78)This chapter continues the discussion on
costs. It describes the differences between fixed, variable, and
semivariable costs. It demonstrates how to compute the
cost-volume-profit (CVP) ratio and the profit-volume (PV) ratio.
Zelman, W., McCue, M., & Glick, N. (2009). Financial
management of health care organizations: An introduction to
fundamental tools, concepts, and applications (3rd ed.).
Hoboken, NJ: Jossey-Bass.Retrieved from the Walden Library
databases.Chapter 3, “Principles and Practices of Health Care
Accounting” (pp. 87–120)Review: This chapter explores the
accounting practices and principles of health care. The authors
detail the rules for recording transactions and the process of
recording and developing financial statements.Chapter 4, “Financial
Statement Analysis” (pp. 121–186)Review: This chapter goes into
detail about the three types of analysis used in financial
statements of health care organizations: horizontal analysis,
vertical (common-size) analysis, and ratio analysis. This chapter
also explains the categories of ratios and how to apply them.
Chapter 9, “Using Cost Information to Make Special Decisions”
(pp. 372–422)This chapter specifies methods of computing price,
fixed cost, and variable cost per unit and details the process of
understanding and creating break-even charts. The chapter also
discusses the decision making process involved in making special
decisions such as make versus buy, add versus drop a
program, and expansion versus reduction of a program.
Chapter 13, “Provider Payment Systems” (pp. 528–568)This
chapter explains the background, concept, and traits of the major
types of payment systems in use today. The chapter also details the
methods of financial risk reduction used by those that must cover
the costs of health care.
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