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Draft of Financial PrinciplesDraft of Financial PrinciplesBrenda DuggerSNHU
Draft of Financial PrinciplesDraft of Financial Principles1: Financial Principles and ReimbursementReimbursement StrategiesDefined as a pre-determined fee submitted to a provider organization for the standard costof 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 MethodsTable 1.1ReimbursementMethodAdvantagesFor Strategic Planning ofOperational PerformanceDisadvantagesFor Strategic Planning ofOperational PerformanceBest Use(Type of Facilityand Why)Fee-for Service(FFS)Healthcare cost inflationRewards OverutilizationPayment uncertaintyPayment is dependent upon services renderedHospitals, long term care facilities.Episode-of-Care(Case-BasedPayment)No uncertainty of paymentGuaranteed CustomersLoss of payments due to inefficiencies (duplicate labs, treatment delays).Home Care ServicesOutpatient hospital services (payment for each patient)Financial Management Principles
Draft of Financial PrinciplesTable 1.2Financial Management PrincipleHow It Is Used to Evaluate OperationalPerformanceBenchmarking of industry standardsUsed to identify best practices, identify gaps, and achieve a competitive advantagePayer mix breakdown of payersUsed to identify all payers responsible for payment for the patients’ healthcareUtilization rate dataUsed to compare usage of the health care system and who uses itAccounts ReceivableAt 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).