Healthcare Reimbursement Models

This article will specifically discuss reputed healthcare reimbursement models. These specifically include the fee-for-service reimbursement model, capitation model, bundled payment model, pay-for-performance model, and other value-based healthcare reimbursement models. Although there are numerous healthcare reimbursement models, however, all these can be broken into two basic categories.

1. Traditional Healthcare reimbursement Model
2. Value-Based Reimbursement Model

The primary objective of all these reimbursement models is to ensure the stability of healthcare providers and patients under the specific requirements of insurance providers.

Traditional Healthcare Reimbursement Models

Fee-for-Service (FFS)

The fee for Service (FFS) reimbursement model is a traditional reimbursement model in which healthcare providers receive payment for each service they render to their customers. This model has been facing a lot of criticism because it potentially encourages overutilization of services. This ultimately leads to an increase in healthcare costs against nominal health treatment.

In this approach, medical healthcare providers receive payment for each individual service regardless of their quality and time duration. The payment for healthcare treatment under this model is determined by the medical reimbursement rate that denotes the allocated cost per service. For instance, if a physician conducts an official visit. The medical reimbursement rate may be $100 for that service regardless of the type and quality of the provided service.

More importantly, this traditional payment model prioritizes the stake of healthcare providers and hardly pays attention to the quality of the provided service. The primary advantage of fee-for-service reimbursement is that healthcare providers will receive a definite amount of compensation for every single service.  Read More...