Essay on BrendaThomas1 HS440 01 Unit 2 Assignment

1278 Words Feb 13th, 2015 6 Pages
HS440-04: Finance for Healthcare
Brenda Thomas
Unit 2 Assignment: Third-Party Payers
Professor Zacharia Varughese
January 18, 2015

To the attention of the Board of Directors of Health Care Systems, Inc.:

As the CFO of Health Care Systems, Inc., I feel like, in order to have proper reimbursement, correct coding is very important. If the codes are wrong, the charges will be wrong, as well. When you submit codes, the federal government uses them to reduce health care fraud. It is always good practice to double check your numbers before you submit them. “So, knowing the difference a diagnosis code of 280 (iron deficiency anemia) and 820 (a fracture of the neck of the femur) will help protect your practice from fraud and
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Reimbursement means to pay someone back for their out-of-pocket expense for payment of services rendered. There are a number of methods used for reimbursement used by healthcare organizations. There are four main payment methods that include:
Fee-for-service – “physicians are paid for every service and test that they provide based on the usual and customary charges of physicians in the local area.” (Reimbursement Methods, n.d.).
Discounted-fee-for-service – it is almost the same as the previous payment method except the payment is based on either a fee schedule or a pre-determined discount.
Capitation – each enrollee pays a fixed amount per enrollee, not the service and it is paid monthly.
Salary – “physicians are paid a fixed weekly or monthly amount, and pay is not tied to enrollees or services rendered.” (Reimbursement Methods, n.d.).
Some other methods types are:
Cost-based – the provider is paid for incurred costs for services provided to an insured population.
Charge-based – payment is made according to a chargemaster or rate schedule.
Prospective payment – pays the expected costs instead of historical costs. Rates are determined prior to services being rendered. The diagnosis code is the most important information listed on an insurance claim form. “The code numbers entered there is based on the physician’s opinion of the patient’s specific

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