Pamela Keeme  Reimbursement Methodologies 1) Focus on Payment

Pamela Keeme  Reimbursement Methodologies 1) Focus on Payment Methodologies and discuss the various payment systems. Demonstrate understanding of fee for service, cost based, and prospective payment systems. Just like coding systems are different, payment methodologies for inpatient hospital, outpatient hospital, and professional claims are also different. Many commercial payers follow the lead of Medicare once it has implemented a specific payment system(Aalseth, P. 2015).  Fee For Service- This is the most traditional, simple payment system. For this payment system, a service is billed using a CPT or ICD procedure code. The payer has a fee schedule with a set reimbursement amount for each service it covers. The provider gets the fee schedule amount less any deductible or coinsurance owed by the patient. Most physician services are paid according to a fee schedule. Clinical laboratory services are paid based on a laboratory fee schedule, and ambulance services are paid on an ambulance fee schedule. Cost Based or Reasonable Cost- Under this payment system, providers or facilities submit an annual cost report that details the expenses of running their businesses. There are extensive rules for completing this cost report. Examples are: data on bed utilization, salaries by cost center, expenses by cost center, indirect costs related to items such as medical education, cost-to-charge ratios, capital expenditures, and other items. In most cases the facility has been receiving periodic interim payments from the payer throughout the year, and the cost report is then used to “settle” or reconcile the costs to the payments already received. For Medicare, the cost reports are submitted to the Fiscal Intermediary (FI), which reviews and/or audits the cost report and then submits it to the CMS for reporting. PIP (periodic interim payments) are available to inpatient hospitals, skilled nursing facility services, hospice services, and critical access hospitals. These facilities are supposed to self-monitor their PIP payments to make sure they are not receiving overpayments or they can be penalized if overpayment exceeds 2% of the total in two consecutive fiscal reporting periods. Prospective Payment System- In order to change hospital behavior to encourage more efficient management of medical care, Medicare introduced hospital inpatient prospective payment in 1983. Using a system that was developed in the 1970s by Yale University, reimbursement to hospitals was based on diagnosis-related groups (DRGs). Data already appearing on the claim form are used to assign each patient discharge into a DRG: Examples are Principal diagnosis, Complications and comorbidities (CCs), Surgical procedures, Age, Gender, and Discharge disposition (died, transferred, went home). Once a DRG has been assigned, the determination of the reimbursement amount can start. Each DRG has a relative weight assigned to it. Patients in a given DRG are assumed to have similar conditions, receive similar services, and use similar amounts of hospital resources. The prospective payment system is based on paying the average cost to treat patients in that DRG. The DRG weights are adjusted annually. The more complex the DRG, the higher the weight. 2) Explain medical necessity and how it impacts payment- To determine medical necessity, it involves comparing the procedure being billed to the diagnosis submitted. If you receive a denial notice from the payer that the procedure was “not medically necessary”, it means that your payer does not think the procedure or test was justified for the diagnosis given. Medicare carriers publish what are known as “Local Coverage Determinations” (LCDs) that contain lists of diagnosis codes that validate procedures. If your diagnosis is not on the list, your claim will be rejected. If the provider of the service knows in advance that a service is likely to be deemed not medically necessary, he or she can ask the patient to sign an Advance Beneficiary Notice (ABN) in which the patient acknowledges the possibility the claim will not be paid and agrees to be financially liable for the charge.  3) What has been the effect of payment methods on coding? Medical billing procedures have been much more effective since the advent of the CPT medical coding system. Developed by the AMA, the CPT system was designed to help facilitate and standardize medical billing practices. The coding system consists of alpha-numerical codes which are designated to describe the various services and treatments a doctor or medical facility performs on their patients. These codes are entered into a database system which is used for billing insurance companies, Medicare and Medicaid. Through the use of this billing system, medical professionals are better able to keep track of their financial records and receipt of their medical payments(  Aalseth, P. (2015). Medical Coding. What It Is and How It Works. Second Edition. Burlington, MA. Jones & Bartlett Learning Post 2  Richard Matos Week 4 – Payment MethodologiesCOLLAPSE Fee for service is a method in which doctors and providers receive payment for services provided and the most traditional payment mechanism.  Services are billed using a CPT or ICD code, The provider gets the fee schedule amount less any deductible or coinsurance owed by the patient. Laboratory and ambulance services are paid on a laboratory and ambulance fee schedule. (Aalseth P.T., 2015). Under Reasonable Cost or Cost Based providers and facilities present a detail report of the expenses of running their hospitals or clinics.  The reports include bed utilization data, salaries, expenses by cost center, medical education, cost to charge ratio, capital expenses, and other items. (Aalseth P.T, 2015).  In order to control the cost of Medicare, Medicaid, and other insurance programs, Medicare introduced Hospital inpatient prospective system in 1983.  Reimbursement will be based on Diagnosis-Related Group (DRG’S).  Data already appearing on the claim form are used to assign each patient discharge into a DRG; Principal diagnosis, Complication, and comorbidities, surgical procedures, age, gender, and discharge disposition.  Once a DRG has been assigned, the determination of the reimbursement amount can start. (Aaselth P.T., 2015). Medical necessity involves comparing the procedure billed to the diagnosis submitted. Local  Coverage Determinations are a list of diagnosis codes that validates procedures such as X-rays, EKG’s and others. If the procedure billed was not on the list the claim will be rejected.   Since the implementation of DRG’s coding made a difference in reimbursement.  Coders were elevated out of the dark and into the financial limelight. Medical records departments were turned into health information management departments.  The potential dollars to be made was an incentive to coders to use the right codes. (Aaselth P.T., 2015)  Reference Aalseth, P.T. (2015). Medical Coding, what is it and how it works, (2nd ed.) Sudbury, MA: Jones & Bartlett Learning

Assignments ABC
Order NOW For A 35% Discount!
Pages (550 words)
Approximate price: -


Top-Quality Papers with AssignmentsABC

Are you stuck with your paper? Is a research paper giving you a hard time crafting research topics? We assist students in achieving the best top-grade academic writing services in compliance with the provided instructions. Have your paper written with a certified specialist Ph.D., Bachelor's, and Master's graduates with many years of experience in academic writing. All our writers undergo thorough tests to ensure they are qualified writers and deliver the best consistent papers of high quality under tight deadlines.

1000+ Master's, Bachelor's and Ph.d. Experts

We ensure all our writers have the knowledge and experience of crafting the best papers before hiring them. Our writers have acquired Bachelor's or Ph.D. credentials from reputable institutions all over the globe. Our writers can handle papers from any discipline and can handle over 100+ subjects. Including but not limited to a dissertation, term papers, research papers, narrative essays, thesis papers, expository essays, etc. All your orders must pass through a strict protocol of our expert essay writing editors.

Affordable Essay Writing Services

We know that students have very limited budgets. And for that, we always strive to provide only the best, most affordable online college homework help services to our customers. We provide a great deal of student-friendly prices and professionalism with all our essay writing services. We provide great discounts for all our returning customers and new clients. Our paper writing services have a user-friendly interface and professional academic assistance. We are committed to assisting all students in any discipline regardless of their academic level. Place an order with an essay writer today.

Timely delivery of Work

Are you close to missing your paper deadline? Or spent a lot of time conducting extensive research and crafting papers? You are at the right place to get your research paper done in under 3 hours to meet your tight deadline. Our writers follow a strict schedule to ensure papers are delivered before the deadline to enable our editors to proofread before the final delivery to our customers. We strictly observe the early delivery of assignments to meet our clients' deadlines. You can, therefore, trust that your paper will be done within and before the set deadline.

100% Original Papers

"Hello, can you write my essay with 100% original content?" We are dedicated to conducting thorough research and writing papers from scratch to deliver original papers. Writers who deliver plagiarized papers are suspended to avoid future plagiarized papers. To avoid paper plagiarism, all orders go through steps of writing, editing, and proofreading. All papers are delivered with 100% plagiarism content. You can, therefore, rest assured that any signs of plagiarized or unoriginal content will be rejected before it reaches your portal.

24/7/365 Customer Assistance

We are dedicated to ensuring our customers have an excellent experience while using our essay writing services. Our customer support is available 24/7/365 to help clients and make their paper writing services easy to use. Our experienced support team is available to answer your queries any time, 24 hours a day. Kindly feel free to ask your queries on your order placement, payment methods, and order processing. Our customer support is always available round the clock and ready to listen to your queries. Feel free to contact us via our website or live chat.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

For years now, has stood as a leader in providing its customers with the best online college homework help service in the industry. And all you have to do is provide us with the details of your order. Leave everything else to us. We’ve always got you covered.


Essay Writing Services

Since we launched, deserved the best online “college homework help status” thanks to our essay ordering, writing, and delivery process. We deliver nothing but excellence in our results. Our essay writing services include impeccable grammar, zero-plagiarism, proper structure, and conformance to guidelines.


Admission and Business Papers

Our top-quality online college homework help services guarantee that you will be accepted into your desired university. You just need to fill out your admission and business papers, and our team of online homework help workers will handle the rest. We will help you achieve and secure the best positions in your admissions forms.


Editing and Proofreading

At, we have a skilled writing and editing team that’s dedicated to creating, editing, and restructuring for all types of papers. Our online college homework help editing and proofreading team will check, paraphrase, and correct any grammar mistakes on your paper before submitting the final document to you.


Technical Papers

At, we pride ourselves in having writers in almost all fields, even the most technical ones. You never have to worry about your paper being too technical for our certified online college homework help writers to handle. Mycoursewriter's team of writers can handle even the most complex writers. We will match your paper to the most competent writer that we believe will handle your paper the best way possible.

Open chat
Chat with us Live Here
Get in Touch with Our Live Chat Agents via WhatsApp on +1(346) 416-0954. Get Unlimited Access to Answers on Any Queries With Your Paper.