1st Edition

Cost-Based, Charge-Based, and Contractual Payment Systems

ISBN 9781439872994
Published August 7, 2012 by Productivity Press
181 Pages 3 B/W Illustrations

USD $74.95

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Book Description

The fourth book in the Healthcare Payment System series, Cost-Based, Charge-Based, and Contractual Payment Systems compares cost-based systems, charge-based payment approaches, and contractually-based payment processes with fee-schedule payment systems and prospective payment systems. Supplying readers with a clear understanding of important background material on the different types of healthcare providers, it covers the basics of cost-based, charge-based, and contractual payment systems.

The book illustrates essential concepts with a series of simple case studies—making it ideal for anyone interested in learning more about the specific systems and processes used for payment in healthcare services. It discusses Medicare cost-based payment systems, Medicare payment approaches, and includes an appendix that outlines the various Medicare payment systems. Demystifying contractual language, it outlines managed care contracts and also:

  • Delves into the intricacies involved with adjudication of claims
  • Considers capitated payment systems
  • Addresses healthcare costs and cost-based reimbursement systems
  • Examines charge-based and contractual payment systems
  • Describes where healthcare payment systems are headed in the future

Since compliance is inherent throughout the process of providing services, filling claims, and receiving payment, the book examines the range of compliance concerns, including statutory, contractual, and overpayment issues. Using numerous examples to illustrate the processes used for capitated contract arrangements, the book includes coverage of claim adjustment, managed care contracts, and the various combinations of payment systems used by third-party administrators.

Table of Contents

Preliminary Comments
Review of Healthcare Payment Systems
     Claims Filing and Payment
     Deductibles and Copayments
     Fee Schedule Payment Systems
     Prospective Payment Systems
     Cost-Based Payment Systems
     Charge-Based Payment Systems
     Capitation Payment Systems
     Contractual Payment Systems
Healthcare Provider Concepts
     Nonphysician Practitioners and Providers
Hospitals and Integrated Delivery Systems
     Special Provider Organizations
          DME Suppliers
          Skilled Nursing Facilities
          Home Health Agencies
          Independent Diagnostic Testing Facilities
          Comprehensive Outpatient Rehabilitation Facilities
          Clinical Laboratories
          Ambulatory Surgical Centers
Claim Adjudication and Payment Processing
Summary and Conclusion

Healthcare Provider Costs and Cost-Based Payment Systems
Costs and Cost Accounting
Medicare Cost Report
Cost-Based Payment: Key Features
Critical Access Hospitals
Rural Health Clinics and Federally Qualified Health Centers
Summary and Conclusion

Healthcare Provider Charges and Charge-Based Payment Systems
Charge-Based Payment: Key Features
     Charge Structures for Healthcare Providers
     Healthcare Pricing Strategies
Chargemasters for Hospitals and Integrated Delivery Systems
     Charge CompressionMedicare Charging Rule
     Healthcare Provider Charges and Public Scrutiny
Summary and Conclusion

Contractual Payment Systems
HIPAA Transaction Standards
Managed Care Organizations
Terminology and Contract Features
     Reimbursement and Payment Terms
     Provision of Services
     Payer and Payee Obligations
     Payment Mechanisms
     Credentialing Processes
     Medical Necessity and Coverage Issues
     Administrative Proceedings
     Access to Records and Audits
Negotiating and Analyzing MCO Contracts
     Precontract Data Gathering
     Contract and Relationship Analysis
     Financial Analysis and Modeling
     Operational Monitoring
     Renewal and Termination
Medicare Advantage Plans
Summary and Conclusion

Capitated Payment Systems
Capitation: Key Features
Risk Management through Insurance
Models for Capitation
Summary and Conclusion

Claim Adjudication and Compliance
Statutory versus Contractual Compliance
Audits and Reviews
     Types of Audits
     Audit Process
     Extrapolation Process
     Audit Reports
     Audit Dependence on Payment Mechanism
     Claim Modification Issues
A Systematic Approach to Compliance
Secondary-Payer Issues
Healthcare Provider Credentialing
Summary and Conclusion

Summary, Conclusion, and the Future
Healthcare Payment Systems: A Historical Perspective
Extreme Variability in Payment Systems
Compliance Issues
Payment Systems: The Future

List of Acronyms

Appendix: Synopsis of the Medicare Program’s Payment Systems
Appendix: Case Study List


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Duane C. Abbey, Ph.D., CFP, is a management consultant and president of Abbey & Abbey Consultants, Inc. Based in Ames, Iowa, Abbey & Abbey specializes in healthcare consulting and related areas. Dr. Abbey, whose work in healthcare now spans more than 25 years, earned his graduate degrees at the University of Notre Dame and Iowa State University. Today, he spends about half of his time developing and teaching workshops (for students who affectionately quip that the Federal Register is his favorite reading material) and making presentations to professional organizations. He devotes the other half to consulting work that involves performing chargemaster reviews, compliance reviews, providing litigation support, and conducting reimbursement studies.

Dr. Abbey also uses his mathematical and financial background to perform financial assessments, develop complex financial models, and conduct various types of statistical work. His studies in the field of neurolinguistic programming have enhanced his ability to provide organizational communication facilitation services for healthcare organizations. He also provides litigation support services for attorneys representing healthcare providers in legal proceedings.

Dr. Abbey can be contacted by e-mail at [email protected] The main website for his company is : http://www.aaciweb.com.