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Milestone One: FINANCIAL PRINCIPLES AND REIMBURSEMENT 13-2 Final Project Milestone One: Draft of Financial PrinciplesIHP-630 Healthcare Finance and ReimbursementSouthern New Hampshire UniversityJessica Dannelley
Milestone One: FINANCIAL PRINCIPLES AND REIMBURSEMENT 2Financial Principles and ReimbursementReimbursement StrategiesPay-for-performance is “any type of payment arrangement to reimburse providers that is performance-based and that includes incentives” (Castro, 2015). They can be “targeted to an individual physician, a group of physicians, or an organization such as a hospital or large integrated delivery system” (Berenson, 2016). These payments can come in different forms such as direct incentives, bonuses, or reimbursements. Case rates and management utilization impacts pay for performance incentives. Such targets include “maintaining or improving the quality of care or meeting benchmarks on profitability or efficiency” (Castro, 2015). Performance bonuses or penalties have represented a few percentage points of the base payment the providers would have received.Reimbursement MethodsFee-for-service is a “method in which providers receive payment for each service rendered” (Castro, 2015). Prices are negotiated between the payers (the ones who determine whomuch should be paid for each service) and the providers (who feel underpaid). For the patient, “the disadvantage of fee-for-service is that [these] plans often have higher deductibles or copayments than other types of health insurance, such as managed care plans” (Castro, 2015). Tohelp guard against this, “physicians can order more services, procedures, or tests to increase reimbursement income” (Rajpal, 2013).