Module 7 lecture, part 6 Flashcards
What is cost-plus reimbursement also called?
Retrospective reimbursement
Is there incentive to control costs or judicious use of svcs in cost-plus reimbursement?
No
What has cost-plus reimbursement largely been replaced by?
Prospective methods
What are still paid under cost-plus reimbursement?
Critical access hospitals in rural areas
What does prospective reimbursement use, and what does it enable Medicare to do?
Established criteria to determine in advance the amt of reimbursement
Enables Medicare to predict future HC spending
What are incentives to reduce costs in prospective reimbursement?
Making a profit by keeping their operating costs below the fixed prospective rates
What does the ACA direct Medicare to do in terms of prospective reimbursement?
Develop “value-based purchasing methods that incorporate pay for performance
-To reduce reimbursement while improving quality and efficiency
-Requires orgs to report quality data to the CMS, or face penalties
What are the types of prospective reimbursement?
Diagnosis-related Groups (DRGs)
Psychiatric DRGs
Outpatient Prospective Payment System based on ambulatory payment classifications (APC)
Case-mix methods
What are the case-mix methods?
Resource Utilization Groups
Case Mix Groups
Home Health Resource Groups (HHRGs)
Definition of disbursement of funds
To verify and pay the claims received from the provider after services are delivered
When does claims processing occur?
After svcs are delivered
What does claims processing do?
Verify and pay claims submitted
What does a third-party administrator (TPA) do?
Process and pay claims
Monitor utilization; perform oversight functions
Who uses a third-party administrator?
Self-insured employers
Insurance companies
MCOs
Who is the third-party administrator for Medicare and Medicaid?
BlueCross/Blue Shield and commercial insurance companies
Who processes Medicare part A claims?
Fiscal intermediaries
Who processes Medicare part B claims?
Carriers
Issues related to value and affordability
10 yr (2014-2023) federal costs estimated to be $1,375 billion
This does not include costs to be borne by the state, employers, and individuals.
ACA provisions led to higher insurance premiums and higher taxes
What are current directions and issues with HC financing?
Value and affordability
Adverse selection
Intentional churning
Cost shifting
Fraud and abuse
Issues related to adverse selection
High-risk individuals with a greater incentive to enroll, then premiums have to be raised for everyone
Employers with younger workforces likely to opt for self-insurance
Issues related to cost shifting
ACA coverage expansion paid by reducing payments to hospitals and other providers
Cost shifting through premium increases for health insurance
Issues related to fraud and abuse
Fraudulent billing: 3% to 10% of total HC spending
Penalties for delaying or refusing the DHHS access to information in connection with audits and investigations
Definition of churning
A phenomenon where individuals purchase insurance only after they have a HC need and subsequently cancel the coverage once the need no longer exists
