Reimbursement for Health Care Services

Question 1

How are health care services and prescription drugs reimbursed using fee-for-service

Answer 1

-retrospective payment(AFTER service has occurred)
-paid individually for each service
-no incentive to decrease utilization or cost because they are getting paid for EACH service/drug
*commonly used in community/outpatient pharamacies

Question 2

How are health care services and prescription drugs reimbursed using capitation

Answer 2

-prospective payment(paid BEFORE service happens)
-fixed, prepaid amount regardless of number of services provided
-paid fixed amount per member per month
-incentive to decrease utilization and costs
*Commonly used by managed care organizations

Question 3

How are health care services and prescription drugs reimbursed using per diem

Answer 3

-prospective payment
-paid a flat rate PER DAY regardless of actual cost
-incentive to decrease utilization but no incentive to control length of stay
*Used by Medicare for skilled nursing facilities, home health, hospice, etc…

Question 4

How are health care services and prescription drugs reimbursed using diagnosis-related groups (DRGs)

Answer 4

-prospective payment
-bundled payment approach where healthcare facility is paid a flat fee for EACH diagnosis/disease state
-incentive to decrease utilization and costs and length of stay
*Used my Medicare Part A and Medicaid

Question 5

How are health care services and prescription drugs reimbursed using value-based purchasing

Answer 5

-voluntary participation
-incentive payment program for hospitals where hospitals are encourage to improve clinical care processes instead of focusing on cost containment
-rewards hospital based on quality of care provided
-Withhold approx. 2% of DRG payment until end of year and if hospital preforms well, they get 2% back and bonus
*only if high quality of care is demonstrated

Question 6

How can the various approaches to reimbursement create different incentives to control health care utilization

Answer 6

FFS: incentivizes providers to bill as many services as possible
Capitation, Per diem, DRG incentivizes facilities to decrease utilization and costs, because all are prospective payments so the less they use, the more profitable they become
VBP: incentivizes hospitals to provide high quality of care to receive bonus and remaining DRG payment

Question 7

How are health care services paid for by public payers

Answer 7

-Medicaid and Medicare
-Prospective payment/bundled payments
-accreditation required to receive reimbursement

Question 8

How are health care services paid for by private payers

Answer 8

-FFS/bundled payment
-use market power to negotiate prices (i.e. # of providers or hospitals)

Question 9

How are health care services paid for by self-pay

Answer 9

-for those uninsured
-very common
-discounts may be available but will vary between facilities/provider

Question 10

How are health care services paid for by charity care

Answer 10

-costs are “written off” for tax credit
-costs can be shifted to other payers such as private payers

Question 11

Describe integrated, interdisciplinary care approach and what is an example

Answer 11

-groups or doctors, hospitals and other health care providers who come together to give coordinated, high quality care
-less focus on transaction-based payments
-more incentive-based payments
-providers share risk
-tied to quality, appropriateness, safety, efficiency
*Accountable Care Org and Patient-Centered Medical Home
*tied to Medicare, being tried out by gov. before private payor utilizes

Question 12

Describe implication of prospective payment in regards to prescription drugs and pharmacy services

Answer 12

-Pharmacy becomes a “cost center”
-payments need to cover drugs AND services
-balance between lowest cost and patient outcomes
*making sure everything is covered

Question 13

Describe implication of non-prospective payment in regards to prescription drugs and pharmacy services

Answer 13

-Pharmacy becomes “revenue generator”
-pharmacy has something to “sell”
-cover costs in other areas that are not revenue generators such as housekeeping, food services, etc…

Question 14

How do clinical pharmacists bill and get reimbursed for services provided

Answer 14

-Medicare Part D: Part D plans MUST reimburse pharmacists for providing MTM, and reimbursed on a FFS basis

-Wisconsin Pharmacy Quality Collaborative(WPQC): group of public/private payers and pharmacies that pay pharmacists for providing MTM and CMR/A services to eligible patients and reimbursed on FFS basis

Question 15

What is Wisconsin pharmacist provider status

Answer 15

-Wisconsin Act 98 which added pharmacists to list of recognized health care providers in WI whose services must be reimbursed by WI Medicaid
- ALL pharmacists in ALL practice setting are eligible
-DOES NOT change scope of practice

Question 16

What are the basics of billing Wisconsin Medicaid

Answer 16

-pharmacist MUST enroll as a Medicaid provider
-Have an NPI
-No additional training or certification required
1. bill services using Healthcare Common Procedure Coding System(HCPCS) and Current Procedural Terminology(CPT)
*shows what they did
2.Document ICD-10 or Z-series diagnosis codes on claims(shows reason for providing service)
3. Documentation required to support all billed medical services(detail and extent of documentation must be consistent with industry coding guidelines)

Question 17

How are prescription drugs paid for in community pharmacy

Answer 17

-utilizes retrospective payments
-billed to patient’s prescription drug insurance

Question 18

How are prescription drugs paid for in a hospital pharmacy

Answer 18

-utilizes prospective payment
-billed to patients MEDICAL insurance
*can be retrospective but that is when it is billed and paid for separately from other services