The “MHA FPX 5006 Assessment 1 Attempt 1 Financial Basics” course includes the Categories of Revenue Sources lecture for an introductory Health Care Finance course. This lecture provides a general overview of three different types of revenue sources, their function, how the organization is compensated, and their advantages. Healthcare professionals receive money in a variety of ways. For payment and achievement, it is essential to comprehend what they are and how they operate. Each initiative has its specifications, conditions, and payment methods. The processing of assertions must be done in a way that covers all bases to minimize the chance that they will be rejected if provider organizations are to profit from these payment systems. Medicaid, Medicare, and Managed Care coverage payments are the three primary sources of provider income. These three income streams are governed by laws, which determine how and when the services participants get paid for. This presentation’s goal is to talk about these three monetization strategies, their functions, and how each one’s particular reimbursement procedures operate.

Types of Health Finance

Medicaid

Medicaid It is a framework made by the American federal government. It is a joint federal-state initiative (Mehta et al., 2022). The major objective of the program is to help people. As a provision of the Social Security Act, Medicaid was established in 1965 to provide “poor” residents with high-quality health care. This comprises people with disabilities, kids, and senior individuals who need protracted care. Since its beginnings, the program has grown dramatically to the point that one in five Americans (68 million yearly as of 2018) are now covered by Medicaid, making it the main provider of protracted care services in the nation. The Medicaid program is regarded as a collaboration between the federal and state governments. This implies that each state has its own Medicaid program, although the federal government sets precise guidelines for them to go by, each state operates its program differently, resulting in variations in coverage among states.

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In the context of “MHA FPX 5006 Assessment 1 Attempt 1 Financial Basics,” the Categories of Revenue Sources lecture for an introductory Health Care Finance course delves into essential topics. When the Affordable Care Act was formed in 2014, it gave individual states the ability to increase individual coverage for those under 65 whose families earn less than 133 percent of the federally determined poverty line (Bosch et al., 2022). This development significantly impacts the landscape of healthcare financing, as it harmonizes the standards that govern enrollment and compensation management.

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The organization overseeing Medicaid is structured into seven distinct entities, each with its specific responsibilities, including the State Demonstrations Group, the Financial Management Group, the Operations Services Group, the State Health Programs Group, and the Innovation Accelerator Program. Medicaid’s payment system is uniquely designed to facilitate access to medical treatments for individuals who would otherwise be unable to afford them. However, understanding the intricacies of the reimbursement procedure for this program can be challenging, as it depends on the state offering the coverage and their unique requirements. Therefore, comprehensive knowledge of these financial basics, as explored in “MHA FPX 5006 Assessment 1,” is essential for healthcare professionals and financial managers in the field.

Medicare

For those who are 65 years of age or elderly and young person’s receiving Social Security disability payments, Medicare is a health insurance program. Although the program helps with medical costs, it does not pay all medical costs or the cost of the majority of long-term care. Three months before turning 65, you can first register for Medicare. If you have a handicap, you might be able to acquire Medicare sooner.

Managed Care

A considerably larger and most well-defined term is managed care. Although it often comprises systems that may not fulfil the precise regulatory standards of some governmental bodies, it is frequently used to include and occasionally to denote Health Maintenance Organization (HMO). Therefore, Medicare can enter into contracts with both HMOs and competitive medical plans (CMPs), which may adhere to various standards yet carry out HMO-like operations. Almost every action that disrupts the established patient-provider connection is considered a part of managed care from the public’s and many health professionals’ perspectives.

MHA FPX 5006 Assessment 1 Attempt 1 Financial Basics

Purpose of Health Care Reimbursement Programs

Programs like Medicare, Medicaid, and managed care work to lower the cost of medical treatment for those who need more help paying for coverage. Over 55 million members of Medicare are covered for goods and services (Bosch et al., 2022). Approximately 9 million non-elderly persons with disabilities, including 1.4 million children, are among the more than 60 million Americans who rely on Medicaid. Such initiatives provide coverage for millions of people across the whole country (Bosch et al., 2022). Each plan’s coverage is subject to federal and state regulations. Plan, operator and service coverage all affect the rate of payment. Different coverage and reimbursement models, such as the fee-for-service approach, are described below. Medicare, Medicaid, and managed care programs all employ the fee-for-service business model.

States often determine provider payments under the fee-for-service model (Browning et al., 2022). Such payments must be under effectiveness, economy, and standard of healthcare, and they must be adequate to ensure access comparable to that of the general population, according to Section 1902(a)(30)(A) of the Social Security Act. For a variety of services, Medicaid and CHIP Payment and Access Commission (MACPAC) have recorded state-specific fee-for-service payment procedures. Since Medicaid Fee for service (FFS) reimbursement rates for doctor services are frequently substantially lower than those paid by other payers, there are worries that the low fees would impair doctors’ willingness to accept Medicaid, and hence patients’ access to treatment (Bosch et al., 2022). Research has repeatedly established a correlation between low reimbursement rates (compared to other payers) and reduced levels of doctor engagement, even though other factors, such as administrative load, are also known to impact physician participation. Despite wide variations by state and service, Medicaid FFS physician payment rates are typically two-thirds of what Medicare pays. Although states pay care facilities differently, it is more challenging to compare Medicaid FFS payments to various providers.

MHA FPX 5006 Assessment 1 Attempt 1 Financial Basics

To compare Medicaid FFS inpatient hospital payments between states and with Medicare, MACPAC created a state-level payment index. Once supplementary reimbursements and provider contributions are acknowledged, the overall Medicaid payment is on level with or greater than Medicare (Moore, 2022). For skilled nursing payments, MACPAC has not conducted a comparable analysis. A managed care program was engaged by 83% of all Medicaid participants in 2019 (Heaton & Prasanna Tadi, 2022). For a variety of reasons, states have implemented managed care into their Medicaid systems. States have some control and certainty over upcoming expenditures because to managed care. Managed care, as opposed to FFS, can promote systematic attempts to assess, evaluate, and manage progress, equity, and efficiency and can permit more accountability for results. Additionally, managed care programs can provide a chance for better quality care and administration.

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The Reimbursement Process that Health Care Organizations Must Undertake

The five stages listed below must be followed by providers to get and keep payment for healthcare:

1. Providers sign in to the electronic health record (EHR) and enter crucial information about the patient’s past and current issues.
2. In the electronic health record (EHR), medical codes are assigned by providers or qualified medical coders, or the EHR may automatically recommend codes.
3. Suppliers have two options for submitting claims: either directly to payers or electronically through a processor that acts as a middleman and checks claims for potential inaccuracies.
4. A payer evaluates a claim after it has successfully passed through the clearinghouse and decides whether to completely resolve toward the authorized amount or to reject all or part of it.
5. Even though providers can take efforts to spot and avoid mistakes up front, they must also deal with post-payment audits, in which payers ask for proof that claims have been paid appropriately.

Some phases, including day and night, seasonal fluctuations, month-end closures, and year-end statements, are so typical for healthcare finance employees that they are overlooked. The proverb “the only permanent in life is change” and the proverb “the more things change, the more they stay the same” may both be applied to life. The idea of cycles applies when providers approach the task of examining payer compensation. Here are the top five ways that medical facilities are compensated:

Reduction from the billed charges

With the payer accepting to reimburse at a discounted rate utilizing the provider’s standard Charge Description Master (CDM), which is used to monitor activity and invoicing, this presents the provider with the lowest amount of risk (Bosch et al., 2022). Though conceptually the simplest to compute, payers frequently analyze the costs that are invoiced, and greater rejection rates can result in more audit and recovery efforts.

Fee-for-Service

Certain contracted fees for each treatment and service are incorporated into this model, but over time, new cost-control and treatment elements have been added. The payer encourages joint price management for inpatient treatments through the use of each and specified or relative weight case rates (Moore, 2022). As a way of distributing the risk, providers frequently negotiate to prevent agreements and hollowed for expensive products. Fee-for-service began with straightforward rate schedules for specific operations for outpatient treatments, but it has now extended to include larger groups of codes under standardized outpatient reimbursement categories (APC, APG, EAPG, etc.).