Essay On Historical Cost Reimbursement

There are multiple methods of payment in the health care field. However, there are four major payment methods utilized by health care facilities. The first method is historical cost reimbursement. Even though a majority of facilities have migrated away from this form of method, there are some that still utilize this method due to the regulated cost reimbursement system is believed to monitor quality of care and in specific settings. Historical cost reimbursement is based on two aspects. The first is reasonable cost, which are guidelines for reimbursement of services the patient received and a cap maximum payment price. There are limits and exclusions put in place to ensure the applicable service is being reimbursed. The second aspect is apportionment and is the delegation of a specific payer for reimbursement. The data …show more content…
This is when health care facilities utilize master price lists, which is similar to a menu at a restaurant. The list contains all of the services they provide and the cost for those services. Even though they list a price for the service, the majority of the time, they do not receive that full amount due to guidelines set in place by CMS. To streamline the reimbursement process, the AMA and CMS created codes which is designated to a service, CPT and HCPCS codes. There are three categories in which is associated with this payment model. The first is if the individual does not have health care insurance and must pay out of pocket. The second are those that seek services at facilities not within their network due to the lack of contractual agreements between insurer and the facility. The last is when insurers have an agreement with the facility to pay for the services, but at a discounted rate. There are advantages in this model because providers are able to evaluate their most utilized services and use to compare with their projected outcomes. By doing so, they can monitor their cash