HEALTHCARE 101: HOW HEALTHCARE REIMBURSEMENT WORKS?
In typical industries, paying for a service or product is as simple as this: You see the price, spend it, and receive what you paid. Reimbursement in healthcare is, however, much more complicated than it. Each stage can experience a problem at any time, causing more delay in paying the provider and possibly burdening patients with bills.
HOW ARE PROVIDERS PAID?
Providers, particularly independent physicians, don’t accept healthcare reimbursement. They directly bill patients and sidestep the administrative task of submitting claims and appealing denials. However, many providers cannot buy this idea as being on multiple insurance panels gives them access to a broader patient base, including the Affordable Care Act.
For the process of healthcare reimbursement, here are five steps that providers need to do:
STEP 1. DOCUMENT THE DETAILS NECESSARY FOR PAYMENT
For the initial visit, providers enter the electronic health record (EHR) and document significant components such as a patient’s history and current concerns. It also takes examination notes, details, and their thoughts on the treatment planning process. Every bit of this data is placed directly into the patient’s medical record, which remains safely stored here and forms a base for the medical necessity of offered services.
STEP 2. ASSIGN MEDICAL CODES
Medical codes get assigned in the electronic health record (EHR) by providers or certified medical coders. Automation could also suggest these codes from EHR, which convert narrative documentation into brief terms that payers utilize to comprehend what services are provided and why by doctors or other healthcare professionals. The most typical medical codes are the International Classification of Diseases (ICD)-10 codes, which depict diagnoses, and Current Procedural Terminology (CPT) codes, which signify procedures and services rendered. After getting them from the healthcare professional, the provider will put these codes into the software. Then, a claim submission can take place electronically or on paper. The payers examine these claims and decide how much money to give back for healthcare services.
Payer contracts and fee schedules decide the amount of money physicians are paid. However, healthcare reimbursement functions more or less similarly, regardless of who pays for it. Every service or process has its payment rate, which is determined by the work needed to do that job. The rate also considers practice and malpractice expenses. In this example of a fee-for-service model, physicians get more money when they do more services. Doctors can bargain about their healthcare reimbursement rates under commercial contracts; nevertheless, they are bound by geographically adjusted payments from Medicare.
STEP 3. SUBMIT THE CLAIM ELECTRONICALLY
Providers can send their claims to payers directly or through an electronic clearinghouse. Usually, if there are mistakes in a claim, it gets rejected by the clearinghouse so providers can correct them and then send a ‘clean claim’ to the payer. These clearinghouses also transform claims into a standard format compatible with the payer’s software for healthcare reimbursement.
STEP 4. INTERPRET THE PAYER’S RESPONSE
The payer reviews the claim after it passes through the clearinghouse. The payer approves the allowable amount or rejects all or part of the claim. Common rejection causes include:
- Lack of medical necessity.
- Timeframe conflicts with related procedures.
- Non-coverage by the plan.
- Insufficient or incorrect documentation.
Providers must review remittance codes to address errors, resubmit claims, or bill patients directly.
STEP 5. PREPARE FOR POST-PAYMENT AUDITS
Even if providers try to find and stop errors before payment, they must deal with post-payment audits. These are when payers ask for documents to ensure their claims were paid correctly. If the documentation doesn’t match what was billed, providers might have to return the money they got from healthcare reimbursement.
Conclusion
Health care reimbursement is a complex, multi-step affair, leading to providers being reimbursed for their services. There is no place left for errors and inefficiency, from patient visit documentation to assigning precise medical codes, electronic claims submission, payer response interpretation, and audit readiness. Understanding this process will help providers surmount challenges such as claim rejections, payment delays, and so on and improve their revenue cycle. With health information technology and proactive quality-based models, further reimbursement outcomes could be enhanced on behalf of the providers and the patients of today’s evolving world of health care.
