The process through which your hospital, healthcare provider, diagnostic facility, or doctor is compensated for providing you with healthcare or medical services is known as healthcare reimbursement. This payment method begins as soon as you receive medical services. Mostly, your insurance provider or a government payer will cover all or part of the cost of your healthcare. The healthcare reimbursement systems in the United States are a mix of public and private third-party coverage, with employers, individuals, and the government contributing to healthcare costs. In this blog, you will go through complete guidelines related to the healthcare reimbursement process.
Procedure Of Healthcare Reimbursement
Government payers and health insurers pay healthcare providers through a reimbursement system. After you receive healthcare services, your provider will submit a bill to the responsible party to cover your medical expenditures. The billed cost is determined by the service you receive and the contract agreed upon by Medicare or your health insurer for that specific treatment. You may see the operation and determine how much Medicare reimbursement it would receive by using a standard procedural technology (CPT) code. Private insurance firms bargain and set payment rates with hospitals and providers. Until there is an urgency, some healthcare providers and hospitals will not take patients whose insurance does not cover them adequately.
Difference Between Healthcare Reimbursement And Other Businesses:
Paying for a service or commodity is simple in most sectors. You see the price, pay for it, and then receive the item or service. The entire process takes only a few seconds. Healthcare reimbursement is far more complicated. The most significant distinction between healthcare and other businesses is that providers are only compensated after services are delivered. Healthcare reimbursement is frequently a month-long procedure with several processes that might go wrong at any time, further delaying payment to the provider and potentially overburdening consumers with bills they don’t comprehend and hence don’t pay. Finally, complete reimbursement for healthcare is not even guaranteed.
Fundamentals Of The Healthcare Reimbursement Process
The key terminologies and their explanations related to the healthcare reimbursement process are followed.
Balance Billing
If your healthcare provider acknowledges your insurance for services, your doctor will get it without paying any extra costs other than your copay and coinsurance. However, this is after you have settled your copayment, coinsurance, or deductible and your insurance company have paid all invoices. Your doctor may request that you pay an additional fee, known as balance billing. Balance billing is unlawful in most circumstances.
Reimbursement Sources
Insurance or government payers compensate healthcare providers through a reimbursement system. Your provider sends a bill to whoever is liable for paying your medical costs once you receive a medical service. The price invoiced is determined by the service and the agreed-upon amount that Medicare or your health insurer has agreed to pay. Private insurance firms negotiate payment rates with providers and hospitals on their own.
Copay VS Coinsurance
A copay is a defined amount for a specific treatment, prescription, or healthcare visit, whereas coinsurance is a proportion allotted for the medical services you receive. Sometimes, you must pay a portion of the medical service while the health insurance company pays the remainder. The amount you must pay will be clearly stated in your coverage contract. Your health insurance may compel you to pay a copay or coinsurance for a medical service, and the amount is usually specified in your coverage contract.
Self-Pay
Your doctor must give you all relevant pricing information if you pay for your medical treatments out of pocket. However, you must be aware that you may face some unexpected charges or surprise bills in the end.
For Example:
If you have had a diagnostic test, you may develop an allergy to the contrast substance. It would be necessary for you to seek another treatment to address your adverse response. If you were unaware of the allergy before your test, the cost of that service could not be estimated.
Healthcare Reimbursement Plan
Healthcare reimbursement plans are tax-advantaged health benefit plans funded by employers that pay employees for medical bills.
Depending on your health plan, you may be responsible for a fraction of the costs, and if you do not have any healthcare coverage, you will be responsible for reimbursing your healthcare providers for the entire cost of your services. Although not all employee-employer health insurance arrangements involve reimbursement, conventional health insurance plans for inpatient and outpatient services are gradually being challenged in the industry by these reimbursement-based arrangements.
Health Reimbursement Arrangement (HRA)
Some companies in the United States deliver health reimbursement arrangements (HRAs), which are employer-funded plans. One of the most advantageous aspects of an HRA is that the reimbursements are tax-free for both employers and employees. Employees are reimbursed for medical expenses. Employers can challenge a tax deduction for contributions made through these plans, whereas employee reimbursement is often tax-free.
HRA can provide extraordinary benefits if your health plan has a high deductible. It permits you to be reimbursed for medical services before you achieve your deductible.
The following three are the most essential and well-known kinds of HRA’S.
- Qualified small employer HRA (QSEHRA)
- Individual coverage HRA (ICHRA)
- Group coverage HRA (GCHRA)
Health stipends
A health stipend is a casual kind of reimbursement than an HRA, with fewer regulations and limits. Rather than offering an HRA, you might provide your staff with a health stipend. A health stipend works like an HRA because companies can set a monthly stipend for their employees. Employees can be reimbursed for insurance premiums and out-of-pocket charges, allowing them to choose their preferred physicians and healthcare systems. A stipend can provide several distinct advantages. Along with many other benefits, employees will have access to various policy options and can compare and select the health insurance plan that best meets their needs. A health insurance stipend might be an excellent idea for your company if:
- You cannot manage to provide proper group health insurance coverage.
- You don’t want to worry about any IRS, HIPAA, ERISA compliance, or regulation issues.
- You want something straightforward and simple to administer, such as automated payroll additions.
- Employees in your company earn advance premium tax credits (APTC) for individual health insurance premiums.
Concierge Care
It refers to an agreement with a consultant or company to receive additional care. It is generally associated with high costs that your health insurance does not pay.
Important Steps To Retain And Receive Healthcare Reimbursement
The providers must take the following five steps to get and retain healthcare reimbursement when billing insurance:
Step 1: Record the Details required for payment
Providers enter vital information about a patient’s history and current problems into the electronic health record (EHR). They also record information regarding the exam and their thought process in developing a diagnosis and treatment plan. All this information is entered directly into the patient’s medical record, which is kept safe and serves as the foundation for determining the medical necessity of the treatments performed.
Step 2: Apply Medical Codes
Medical codes are assigned in the electronic health record (EHR) by providers or skilled medical coders, or the EHR may recommend codes through mechanization. These codes convert textual documentation into brief phrases that payers can use to understand what services physicians or other healthcare professionals provide and why. This comprises International Classification of Diseases (ICD)-10 numbers for diagnoses and Current Procedural Terminology (CPT) codes for procedures and services. The provider will enter these codes into the program, followed by a claim submission, either electronically or on paper. Following that, payers will analyze these claims before providing healthcare payment.
Step 3: Submit The Claim Electronically
Providers may submit claims directly to payers or electronically through a clearinghouse that serves as an intermediary, screening claims for potential errors. When errors arise, the clearinghouse frequently rejects the claim, allowing providers to make adjustments and submit a ‘clean claim’ to the payer. These clearinghouses also convert claims into a standard format compatible with payer software, allowing for healthcare reimbursement.
Step 4: Read The Payer’s Response
A payer evaluates a claim after it has successfully passed through the clearinghouse and either adjudicates entirely towards the approved amount or rejects all or a portion of the claim. Payers use remittance advice codes with brief explanations to communicate healthcare reimbursement denials to providers. Providers must review these codes to decide whether and how they can correct and resubmit the claim or bill the patient. For example, payers may reject treatments that should not be paid concurrently within a single visit. Other times, they refuse treatments due to a lack of medical necessity or because they occur within a specific interval following a linked surgery. Rejections could also be due to a lack of coverage or other factors.
Step 5: Prepare For Post-Payment Audits
Although providers can take steps to spot and avoid errors on the front end, they must also deal with post-payment audits, in which payers seek paperwork to ensure claims have been paid appropriately. If the paperwork does not support the services billed, providers may be required to refund the healthcare reimbursement.
Conclusion:
Reimbursement is synonymous with repayment. Purchases, such as those made in a store, are often paid for in advance, and you are not usually able to remove the items until you pay for them. Services such as home repair and restaurant service are frequently reimbursed after getting the service.
Health care is a service that is paid for through reimbursement, mostly because healthcare practitioners and hospitals cannot turn you away if you have a severe emergency and also because the contents of the service are rarely known with total clarity ahead of time.
