IHP 630 Milestone One Final Project modified 1127.docx - Draft of Financial Principles Draft of Financial Principles Brenda Dugger SNHU Draft of

IHP 630 Milestone One Final Project modified 1127.docx -...

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Draft of Financial Principles Draft of Financial Principles Brenda Dugger SNHU
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Draft of Financial Principles Draft of Financial Principles 1: Financial Principles and Reimbursement Reimbursement Strategies Defined as a pre-determined fee submitted to a provider organization for the standard cost of services necessary to successfully complete an episode of healthcare for individuals over a designated period, a case rate is only one factor used to reimburse healthcare providers (National Council for Behavioral Health, 2014). Another factor for reimbursement in healthcare is management utilization. Management utilization assesses the “overall efficiency” of an organization providing healthcare (Casto & Forrestal, 2015, p. 100). Both factors impact the performance based, incentive laced, pay-for-performance systems in healthcare reimbursement. Pay-for-performance incentives could be presented as bonuses or penalties (Casto & Forrestal, 2015). An increase in successful case rates results in an increase in pay for performance while efficient utilization management provides the appropriate care, attracting customers accordingly. Reimbursement Methods Table 1.1 Reimbursement Method Advantages For Strategic Planning of Operational Performance Disadvantages For Strategic Planning of Operational Performance Best Use (Type of Facility and Why) Fee-for Service (FFS) Healthcare cost inflation Rewards Overutilization Payment uncertainty Payment is dependent upon services rendered Hospitals, long term care facilities. Episode-of-Care (Case-Based Payment) No uncertainty of payment Guaranteed Customers Loss of payments due to inefficiencies (duplicate labs, treatment delays). Home Care Services Outpatient hospital services (payment for each patient) Financial Management Principles
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Draft of Financial Principles Table 1.2 Financial Management Principle How It Is Used to Evaluate Operational Performance Benchmarking of industry standards Used to identify best practices, identify gaps, and achieve a competitive advantage Payer mix breakdown of payers Used to identify all payers responsible for payment for the patients’ healthcare Utilization rate data Used to compare usage of the health care system and who uses it Accounts Receivable At least two challenges associated with collecting payments for accounts receivable includes; billing errors due to inaccurate coding and management of claims manually. Adoption of the ICD-10 Coding system fine-tuned the process of billing for services rendered to patients receiving health care (Casto & Forrestal, 2015). Coding incorrectly could lead to claim denials (LePointe, 2016). Regular and routine training will improve the coding process and the decreasing of denials for failure to code services properly (LePointe, 2016). The manual management of claims provides an avenue to errors that could be captured with automation (LePointe, 2016).
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