MHA5006_Banta_Lucresha_Assessment 2-1
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Dec 6, 2023
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1
Revenue and Reimbursement
Capella University
Lucresha Banta, RN, BSN
October 2023
2
Step-by-step Process
The revenue cycle has several steps within its process. Once a patient schedules an
appointment and registers with the facility, insurance verification or eligibility verification
occurs. This is also when prior authorizations can occur. Once a provider has seen the patient, the
charges are captured based on the diagnosis and procedure codes. The codes are translated into
billing charges, and claims are sent to the insurance company. The insurance company will
review the claims and send a payment if it is a clean claim or return to the provider due to denial.
Denial management then occurs. The provider will review the claim for mistakes and resubmit if
appropriate. Once the claim is accepted, payment will be posted with the agreed-upon charges
between the provider and the insurance company. Accounts receivable will follow up after the
claim payment and send a bill to the patient for co-pay, deductibles, or co-insurance (Cascardo,
2018).
Figure 1
Scheduling and
Registration
Insurance/Eligibil
ity Verification
Patient visit &
charge capture
Billing & Claims
Denial
Managment
Payment Posting
Accounts
receivable follow
up
Self-pay
payments
Collections
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Determining Pricing Structure
According to Richman et al. (2022), administrative costs are approximately 25-31% of a
practice. Eighty-two percent of these costs are related to billing and insurance-related tasks.
Coding is the most significant cost in this cycle, secondary to extensive and expensive coding
activities. Another factor influencing pricing is inflation. One factor contributing to the inflation
is healthcare worker shortages, including physicians and nurses. Other influences on medical
costs include total care of management, health equity, price transparency, COVID-19, behavioral
health, and Medicaid redetermination. Healthcare insurance competition will also influence
pricing.
With these factors in place, the company must decide on a payment structure. There are
four types of payment structures: fee-for-service, capitated payments, bundled services, and
billing for specific services (Cleverly, 2017). Value-based payment models are also rising as
insurance companies and Medicare try to contain costs but provide high-quality healthcare
(Zuvekas & Cohen, 2016). The payment structure recommended for this group would be a value-
based care model. Due to the large size of the practice and the multiple specialties, it will be
necessary for this practice to coordinate care between all specialties to receive the most
significant payment.
Factors to consider
Types of payers
For this group, all forms of payers need to be considered. This includes Medicare,
Medicaid, private insurance carriers, Medicare Advantage programs, and private pay or
uninsured patients.
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Factors when negotiating with insurance
The practice must review the current contract rate with the market rate by looking at the
in-network provider rate, the practice service fee schedule, and the insurance contract rate for
each service. It is essential to try to find high-volume services that will lead to increased payment
rates. Know the reputation of the practice. High patient rankings, accreditations, and specialty
services will give the practice more leverage in negotiations. Since insurance companies are
looking for ways to save money, the practice should show how they control costs with members.
Insurance companies are shifting to value-based payment schedules. The clinic should focus on
meeting quality and cost targets. Showing that the clinic is shifting to value-based care can lead
to higher reimbursement. Finally, negotiate other terms such as the timeframe to submit claims,
time to appeal denials, what requires prior authorization, and the time allowed to modify the
agreement (Jones et al., 2006).
Charity and private pay patients
For patients with no insurance coverage, a fee schedule will be set. Private pay services
will have a set amount established for services, and patients must pay upfront. These patients will
receive financial counseling and be advised of their costs for care upfront. Patients should be
below a set income level for charity cases to receive charity care. These charity care cases will be
based on income. The clinic will have financial counselors to help patients obtain the correct
insurance, such as Medicaid services.
Recommended Software
The clinic should use a web-based software system to manage its billing and records
systems. This method is cheaper than PC-based programs and can be accessed from any location
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with internet access. This will allow billers and coders to access from anywhere, and companies
that use clearing houses for claims will have easier access to needed data.
Conclusion
A uniform electronic health charting system will allow for consistency across the group.
Consistency will make billing and coding easier, decrease education time on multiple platforms,
and allow physicians to enter more accurate information. Coders can accurately determine the
correct diagnosis, HCPC, or CPT codes from what the physician enters during the visit.
Presenting clean claims for quicker reimbursement will create less back-end work for billers
(Richman et al., 2022). According to Richman et al. (2022), financial counseling can reduce
post-treatment billing costs without surprises for patients. Combined, these processes can lead to
higher revenues, less provider frustration, and less patient frustration of not knowing the costs of
treatments.
6
References
6 Tips for Negotiating Insurance Contract Rates - Providers Take Note! - Medical billing and
collections as low as 1.99% (practiceforces.com)
Cascardo, D., MA, M.P.A., C.F.P. (2018). The Importance of a Revenue Cycle Game Plan Is
That Your Revenue Team Manages It.
The Journal of Medical Practice Management:
MPM,
33
(4), 231-233.
http://library.capella.edu/login?qurl=https%3A%2F
%2Fwww.proquest.com%2Fscholarly-journals%2Fimportance-revenue-cycle-game-plan-
is-that-your%2Fdocview%2F2010638793%2Fse-2%3Faccountid%3D27965
Cleverley, W. O. (2017).
Essentials of Health Care Finance
(8th ed.). Jones & Bartlett Learning.
https://capella.vitalsource.com/books/9781284142808
Fee-for-service, While Much Maligned, Remains the Dominant Payment Method for Physician
Visits. (2016).
Medical Benefits,
33
(8), 8-9.
http://library.capella.edu/login?qurl=https
%3A%2F%2Fwww.proquest.com%2Ftrade-journals%2Ffee-service-while-much-
maligned-remains-dominant%2Fdocview%2F1789082671%2Fse-2%3Faccountid
%3D27965
Jones, C. L., & Mills, Terry L., Jr. (2006). Negotiating a Contract With a Health Plan.
Family
Practice Management,
13
(10), 49–55.
http://library.capella.edu/login?qurl=https%3A
%2F%2Fwww.proquest.com%2Fscholarly-journals%2Fnegotiating-contract-with-health-
plan%2Fdocview%2F221693493%2Fse-2%3Faccountid%3D27965
Medical cost trend: Behind the numbers: PwC
Richman, B. D., Kaplan, R. S., Kohli, J., Purcell, D., Shah, M., Bonfrer, I., Golden, B., Hannam,
R., Mitchell, W., Cehic, D., Crispin, G., & Schulman, K. A. (2022). Billing And
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Insurance–Related Administrative Costs: A Cross-National Analysis.
Health
Affairs,
41
(8), 1098–25.
https://doi.org/10.1377/hlthaff.2022.00241