Assignment: Methods of Payment

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Assignment: Methods of Payment

Assignment: Methods of Payment

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t developed two tracks for Part B reimbursement beginning in 2019: The first track will provide Part B increases (or decreases) based on a Merit Incentive Payment System (MIPS), which will include criteria for quality, advancing care information (use of the electronic health record), clinical practice improvement, and cost. The second track will provide Part B increases (or decreases) based on the physician’s use of CMS-certified Alternative Payment Models (APMs), which are intended to move physicians away from low-risk fee-for-service toward risk-assuming methods of payment, such as capitation. To be CMS-certified, the APMs must provide two-sided risk (one-sided risk means the provider enjoys only incentives whereas two-sided risk means the provider also assumes penalties). metHods of PAyment Third parties and patients use a variety of methods to pay providers for healthcare services. Methods of payment to healthcare organizations and other providers can be classified according to the amount of financial risk assumed by the healthcare organization

Every healthcare organization has a list of charges (also called prices or rates) for care pro- vided to patients. The organization may set charges based on the care provided; several other methods of setting charges are discussed in chapter 8. If the healthcare organization sets charges correctly, and if the third party or patient pays the charges, the organization assumes no financial risk—it provides the service, it gets paid. Using set charges as the method of payment provides no financial incentive for the healthcare organization to provide only what is medically appropriate.

cHArges mInus A dIscount

Healthcare organizations sometimes offer discounted charges to third parties. For example, if an insurance company provides a large volume of patients to a healthcare provider, the provider may reward the insurer with a discount. If the healthcare organization does not discount its charges below its costs, it assumes little financial risk with this arrangement. As with charges, a healthcare organization that offers charges minus a discount has little financial incentive to provide only care that is medically appropriate.


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