Posted: October 16th, 2022

Healthcare & Finance :Discussion one

In this discussion,Compare and contrast two methods of reimbursement, describing the advantages and disadvantages of each method. Of the two methods you chose, which do you think provides the best process from a patient perspective?

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Types of reimbursement :

Retrospective Reimbursement

In the retrospective payment method of reimbursement, the third-party payer bases reimbursement on the actual resources expended to deliver the services. Since the total amount of resources are not known until after the services are rendered, this is a retrospective, or look-back, methodology. Historically, this was the predominant method of reimbursement.

8In retrospective payment methods, the payer determines the total reimbursement of the health services after the patient has received the services. For example, it is known that the patient will receive preoperative laboratory services, but the actual laboratory services the physician orders and completes for the patient is unknown until after the visit. It could also be the amount of services the patient receives, such as for inpatient admissions. For example, it is known that the patient will be admitted for heart surgery, but the number of days the patient stays in an acute care setting is unknown until the patient is discharged. Examples of retrospective reimbursement methodologies are fee schedule, percent of billed charges, and per diem.

Prospective Reimbursement

Prospective reimbursement is a healthcare payment method in which providers receive a predetermined amount for all the services they provide during a defined timeframe. Within prospective payment methodologies the term episode-of-care refers to the care delivered within a defined period (Belliveau 2016, n.p.). In the prospective payment method, the unit of payment is the encounter, established period of time, or covered life, not each individual health service. The prospective payment method is an attempt to correct perceived faults in the retrospective reimbursement method by incenting providers to provide more cost-effective care for a fixed rate. Thus, the prospective reimbursement method controls costs on a grand or systematic scale.

An episode of care is the health services that a patient receives

•For a specific health condition or illness

•During a period of relatively continuous care from a provider

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