Compensation and Reimbursement Plans

One way in which a MCO can control cost, quality, and access is through various structured compensation and reimbursement plans. The two most common examples are fee for service and capitation. Moreover, there are different types of reimbursement systems for inpatient and outpatient services. Answer the following questions in regard to the above information:

• Examine the three types of inpatient or outpatient reimbursement systems?
• Evaluate the key advantages and disadvantages of each system from the point of view of a managed care plan and the hospital?
• What is the difference between capitation and FFS? Evaluate the type of market appropriate for each reimbursement method. Support your answer by providing an example of an MCO using either of these methods.
• What do you understand by the term “UCR”? With what form of reimbursement is this term associated? Search current information from the Internet and evaluate the use of UCR in the managed care industry.

Reimbursement procedures are complex and detailed, especially those associated with government programs such as Medicare. Part of the regulatory requirements of Medicare is to prevent illegal billing practices such as churning, upcoding, and unbundling. You can search these topics by clicking here.(https://oig.hhs.gov/) You can also search on federal regulations for reimbursement procedures and fraud and compliance guidelines and education materials.

Based on your research, respond to the following questions:

• Review the latest enforcement actions on this website. Identify a case where at least one of the following illegal actions was used—churning, upcoding, and unbundling.
• What are some of the specific examples of actions taken against providers engaged in these practices?

After answering the above questions, read the following information:

P4P is a type of compensation method for providers based on evidence-based practices that promote better quality outcomes. Find at least two online sources of information, such as professional associations and government resources, from the South University Online library or the Internet on P4P compensation programs: one in favor of and one against this type of compensation program for providers.

Now, using the readings this week and the information gathered from the above sources:

• Explain, in your own words, the negative consequences of P4P program.
• Describe the market forces making this type of compensation program popular.