Reimbursement In Managed Care

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In the healthcare field, there are numerous ways to reimburse health care providers for the care they provide to patients. Since there are so many different methods, managed care organizations usually use more than one model to reimburse a healthcare institution. A primary care facility can have numerous separate contracts for providing healthcare services. Reimbursement is the repayment for healthcare services to physicians or any healthcare facility for the services that have already been provided to patients. This paper will discuss the different types of reimbursement models and how they are different from one another, how it will reflect on how each model would be a preferred approach and also how reimbursement is different between inpatient …show more content…
DRGs are used to pay hospitals based on admission rates according to the diagnosis for why the patient was admitted. Medicare Severity DRGs is now the most common DRG system used because it better aligns payments to the actual costs to care for such complicated patients. Case rates is another reimbursement method used to cover certain groups of procedures and services. Case rates are very common in obstetrics and cardiovascular surgery. Package pricing consist of a negotiated rate by the MCO which will cover the fees for a group of related services which includes preadmission and post discharge. “Capitation refers to reimbursing the hospital on a per member per month basis to cover all institutional costs for a defined population of members” (Kongstvedt 80). This type of payment may vary by age and gender but does not fluctuate with premium revenue. Percentage of revenue is a form of reimbursement used to a fixed percentage of premium revenue being paid to the hospital to cover all institutional services. The difference between these two methods is that percentage of revenue may vary with the premium rate charged and the actual revenue …show more content…
“Charge based reimbursement for outpatient care is more common than charged based inpatient care” (Kongstvedt 83). With ambulatory visits, there are two different types of reimbursement used: ambulatory patient groups (APGs) and ambulatory payment classifications (APCs). APGs are used to provide a fixed reimbursement to a healthcare facility for outpatient procedures and include information regarding the reason for the visit and patient data. APCs are used to cover hospital outpatient services such as radiology but will not cover services already paid for under a fee schedule such as ambulance services. APGs and APCs are what DRGs are to inpatient
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