Federal and State Payment Systems 1 federal And State Pay ✓ Solved

Federal and State Payment Systems

Healthcare is an important and vital priority for most countries. However, healthcare leaders face complex and tough challenges derived from current pressures such as the growing occurrence of chronic disease, ageing population, and changes in state and federal regulations. One significant change in state and federal regulations that present the most concern to healthcare leaders is the 2017 tax reform. The new reform will create new possibilities for healthcare facilities that want to convert their tax savings into strategic advantages and also present challenges to other organizations.

Simultaneously, emergent trade forces may also generate uncertainties for healthcare organizations (Siwicki, 2019). Healthcare leaders must, therefore, find it important to reorganize their operations to accommodate the new tax rules, discover what operational modifications the tax reform requires, evaluate how refunds and taxes could impact their Medical Loss Ratios, reorganize their supply chain to accommodate the emergent trade uncertainties and new tax system, among other related actions. The changes in the Affordable Care Act also present a concern to healthcare leaders. Two years into Trump regime, the ACA remains a law, however, the administration and the Republican policymakers have redesigned sections of it through regulatory, legislative, legal, and budgetary actions.

These actions might create new losers and winners. Healthy citizens and small entities looking for inexpensive premium will benefit, as well as insurance companies selling short-term insurance. Those who will not benefit from these decisions and policies are the payers and providers dependent on individuals covered by ACA or Medicaid plans residing in old-fashioned states which are more skeptical of the law.

The Physician Quality Reporting System (PQRS) was established in 2006 to facilitate high-quality in healthcare systems. PQRS was a voluntary reporting system that offered financial incentives for certain health care professionals who participated in Medicaid and Medicare to submit a report on specific quality measures to the Centers for Medicare and Medicaid Services (cms.gov). By reporting, healthcare providers would assess how frequently they were meeting a certain quality metric. Using the feedback provided, they would also compare their performance with their peers. PQRS ended in 2016 and gave rise to the Merit-based Incentive Payment Systems (MIPS). MIPS combines Physician Reporting System (PQRS), Medicare Electronic Health Record (EHR), and Value-Based Payment Modifier (VM).

With MIPS, eligible providers can participate as a group or individually. An individual qualified provider is required to report MIPS data to CMS under an NPI number which is tangled to a distinct TIN. On the other hand, two or more qualified providers can participate in MIPS as a group and will be evaluated as a group (aafp.org). With MIPS, providers will not face penalties every year and there will be greater certainty in yearly payment updates. However, MIPS lacks measures relating to consumer engagement.

Financial proficiency is a major factor in today’s ever-changing and unpredictable healthcare environment. Uncertain and volatile environment factors have forced healthcare leaders to look for ways to become more financially competent. Healthcare leaders are now discovering the need to utilize financial principles in everyday financial and accounting practices. The purpose is to ensure conformity with government standards. Healthcare organizations always ensure they disclose all the necessary and relevant information about the company so that the individuals who rely on that information can make a correct and sound decision about those companies.

They also ensure that financial and accounting calculations are consistent from one financial period to the other. Healthcare organizations also try as much as they can to be unbiased to ensure that the users of their financial statement interpret the information with credibility. Besides that, they also match all their expenses with the revenues to ensure profitability is summarized accurately.

Healthcare providers are usually paid by government payers or insurance through a reimbursement system. The amount paid is normally based on the service provided and the agreed amount that the Medicaid, Medicare or any other health insurer has agreed to pay. However, in today’s healthcare industry, Medicare and Medicaid reimbursement errors are so common and organizations may fail to receive full and timely payment. To avoid this, organizations can use the following strategies:

• Stay up to date with Medicaid, Medicare standards, and any other payer. This will enable organizations to avoid being denied full reimbursement because of ignorance.
• Complete forms legibly, accurately, and appropriately. This will lessen the agony at the end.
• Review claims before it is sent to the payer to check for errors and make necessary edits (Bean, 2017).
• Train billing staff on how to collect all essential patient information and how to fill claim forms correctly.
• Train physicians and nurses on how to properly document and how to choose diagnostic codes and procedures.
• Hold frequent meetings with clinicians, billers, and front office to discuss coding and billing issues.

A case rate is a fee paid for medical services based on the patient’s characteristics. When a case rate is applied, the healthcare provider or the hospital covers every service a patient needs for a specified period (irmi.com). Management utilization, on the contrary, refers to the assessment of the medical efficiency, suitability, and necessity of the use of healthcare facilities, processes, and services under the requirements of the appropriate health benefit plan (apta.org).

In simple terms, management utilization is a strategy utilized by payers to regulate the use of resources within hospitals and physician offices to keep healthcare expenses down. Both case rate and management utilization affect pay-for-performance initiatives.

The implementation of management utilization strategy to ensure patients are getting the right care at the right time will make sure that healthcare facilities are delivering suitable and worthwhile care, which means that the pay-for-performance initiatives may increase.

Healthcare organizations are now utilizing management utilization to a large extent. Management utilization matters now more than ever. Management utilization personnel are now viewed as a substantial part of cost containment and compliance strategies. Healthcare organizations are now positioning their management utilization structures and teams to deliver on the following objectives: adapting and responding to changing regulations and market forces and changing management utilization from an operational requirement to a tactical driver of revenue integrity and compliance (Butters, 2017).

Paper For Above Instructions

Understanding federal and state payment systems in healthcare requires insight into the complexities of reimbursement models, regulatory implications, and the financial performance metrics that govern healthcare organizations operating within these frameworks. The interplay between the various reimbursement methods, alongside the dynamic regulatory environment, shapes the sustainability and operational strategy of healthcare providers.

Reimbursement Models: An Overview

Reimbursement in healthcare primarily occurs through multiple frameworks, with Medicare and Medicaid as the largest public payers. The traditional fee-for-service model has been a dominant approach where healthcare providers are reimbursed per service offered to patients. While this model encourages thorough patient care, it may also lead to unnecessary procedures and increased healthcare spending due to the lack of an incentive for cost containment (Nehk, 2018).

In contrast, bundled payment models provide a more integrated approach by paying a single fee for a set of related services, encouraging providers to deliver more efficient care (medicalbillersandcoders.com). This model aligns the financial interests of healthcare providers with patient outcomes, driving improvements in the quality of care while controlling costs.

Merit-Based Incentive Payment System (MIPS)

The introduction of MIPS represents a significant shift from PQRS and aims to improve healthcare quality while promoting financial accountability among providers. With MIPS, providers who deliver high-quality care receive financial incentives, while poor performance may lead to penalties. This system encourages the adoption of quality measurement and improvement strategies to enhance patient care, although concerns about consumer engagement and the complexities of reporting metrics remain (Siwicki, 2019).

Financial Management Principles in Healthcare

The adoption of stringent financial management principles is crucial for healthcare organizations navigating the unpredictable landscape of regulations and reimbursement systems. Providers are recognizing the importance of ensuring compliance with government standards and maintaining operational integrity. This includes accurately matching expenses with revenues, managing account receivables efficiently, and conducting regular assessments against industry benchmarks (Singh, 2019).

Effective financial management allows healthcare organizations to identify areas requiring improvement, enhance their operational efficiencies, and ultimately lead to better patient care outcomes. By maintaining transparency and credibility in their financial reporting, organizations can build trust among patients, regulators, and consumers alike.

Challenges in Claims Denial and Reimbursement

Claims denials create significant revenue risks for healthcare organizations. Addressing claims denials requires dedicated strategies, such as staying up-to-date with regulations, ensuring the accuracy of documentation, and training staff on billing practices (Bean, 2017). Frequent communication between clinical and non-clinical teams enhances cohesiveness in addressing billing issues and streamlining the reimbursement process.

Conclusion

In conclusion, understanding the intricacies of federal and state payment systems is vital for healthcare leaders to navigate challenges effectively. As healthcare reforms continue to evolve, it is essential for organizations to stay informed, adapt to changes, and utilize robust financial management principles to enhance operational performance and patient care delivery.

References

• Bean, M. (2017). 7 strategies to prevent claims denials. Hospital CFO Report. Retrieved from: [insert URL]
• Siwicki, B. (2019). Here are 6 major issues facing healthcare in 2019, according to PwC. Healthcare IT News. Retrieved from: [insert URL]
• Nehk, K. (2018). What is Fee for Service in Healthcare? Prognocis by Bizmatics. Retrieved from: [insert URL]
• Butters, J. (2017). Why Utilization Management Matter. Becker’s Hospital CFO Report. Retrieved from: [insert URL]
• Sinh, P. H. (2019). 9 of the most common medical accounts receivable problems and how to fix them. Retrieved from: [insert URL]
• irmi.com. Overview of case rates and implications.
• apta.org. Management Utilization in healthcare: Definition and Importance.
• healthcatalyst.com. Benchmarking Healthcare Financial Performance.
• medicalbillersandcoders.com. Understanding Bundled Payment Models.
• aafp.org. Medicare Access and CHIP Reauthorization Act of 2015 (MACRA): An Overview of MIPS.