Hospital Billing System: Reimbursement of Medical Services - Essay Sample

Introduction

The hospital billing system is in charge of reimbursement of medical services offered to the patient in the form of service and medication. The difference in treatment services offered in various departments of a healthcare facility requires different reimbursement systems to settle bills of service providers. The type of reimbursement service adopted depends on profit value packaged to it. It is important to note that the patient paying are also categorized affecting the mode of repayment to be utilized by the facility. For instance, there exist independent patients who settle their treatment bills privately. Some patients acquire health insurance to support their hospital charges. Therefore the hospital signs a contract with the patient or the insurance company on the reimbursement method to be adopted. The payment to the physician may be attached to the quantity of work they provide or measured per duration.

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The hospital reimbursement methods have different terms of agreement concerning payments to be made, which have to be signed as a relational contract. The major approaches used by hospitals to settle their physicians to achieve high incentive includes fee-for-service (FFS), capitation, and salary.

Capitation reimbursement by physicians offers patient payment per assigned duration for service provided. The health provider faces financial risk under this method, whose main incentive is to increase the quantity of healthcare services provided. The healthcare providers will only be willing to perform the services that befit capitation and refer costly conditions to other caregivers elsewhere.

The fee-for-service (FFS) is the best revenue generating reimbursement method. The system rewards the provider on 'per item of service offered' to the client (Rudmik, 2014). Physician's income is directly related to the number of services they provide motivating them to admit a large number of patients, consequently posing a financial risk due to high volumes of service waiting by the payer. The system does not isolate between high and low-cost patients but treats them equally. It provides an entrepreneurial opportunity to the hospital since the provider has been granted the power to service all patients.

Physicians' salary payment method is fixed reimbursement offered after a duration of time in service provision. It is divided into equal durations by the hospital. The provider duty is only to offer their services to payers whenever they show up. The payment is not tied to the quantity of work provided by the physician. The limitation of this method is to the hospital where the physician may reduce the number of services they provide. It is advantageous to providers since their pay is stable despite the low turn of payers to the health facility.

Among the identified reimbursement fee-for-services is beneficial to the hospital since it generates more revenue than the others. Although the healthcare facilities tend to receive a low number of payers, the physicians are motivated to attend to a large number of patients since their pay is attached to it. The method has few financial risks to the hospital since the quantity is moderated from external factors.

References

Rudmik L, D. W.-M. (2014). Physicians Payment Methods: A Focus on Quality and Cost Control. Journal of Otalaryngology, 1-5.