Healthcare Reimbursement Basics

Healthcare reimbursement plans are sometimes named as healthcare reimbursement arrangements. It is different from traditional health insurance plans that revolved round employer-sponsor.  Rather than selecting and administering their employees’ health insurance plans themselves, employers fund health reimbursement plans to a specific amount. Employees are reimbursed for their authentic medical expenses from this fund.

Healthcare reimbursement is the process for paying the health care giver for the services which private health insurers or government agencies pay for healthcare providers’ services. Here is how the reimbursement system works:

• After a patient receives medical treatment, the provider bills for the party for which they responsible for the payment.

• The amount billed is based on a prior agreement with the government (usually Medicare) or private insurance carriers.

• Medicare uses a common procedural terminology (CPT) code, while private firms negotiate their own reimbursement rates with doctors and other healthcare providers.

The U.S. Centers for Medicare and Medicaid Services (CMS) gives details how different healthcare reimbursement approaches and group health insurance plans influence employees and employers:

• In the agreement of reimbursement for health, employers determine how much money to contribute to employees as compensation for their healthcare costs; this is called a defined-contribution plan.
• In group health insurance plans, employers propose their employees one or more defined-benefit plans; employers fund and manage the plans themselves.

The working of reimbursement goes with a definite way. The process differs following the costs which are paid by private or by public payers.

The healthcare industry makes payment after the performance of service. This makes the payment process more complicated than in other industries where customers pay for products and services, and then receive them. Normally, the a few steps are followed by the healthcare reimbursement model is followed after collecting all the information of the patients that includes the data collected from Electronic Health Record (EHR).

The healthcare provider’s certified medical coders to enter the appropriate medical codes for the patient’s HER payment. Some payment processing systems recommend the corresponding codes to automate the entry of coding.

After reviewing the healthcare reimbursement claim, the payer either pays the full amount or rejects a few or all of it.

• Rejections are communicated to providers via remittance advice codes (RACs) that include brief explanations for the claim’s rejection.

• The providers review the RACs to find out if they can resubmit the claim after correction. The inappropriate billing services might be reasons for rejecting a claim.

Even after checking healthcare reimbursement claim for errors before submitting reimbursement claims, the providers are responsible for any mistakes in the claims that they file as part of an audit after payment is done.