Introduction
Health insurance is an evidence-based safeguard that ensures that more citizens get timely and sustainable medical services. Third-party payers are entities that pay healthcare claims on behalf of their respective clients. Some good examples of such stakeholders in the United States include insurance companies, employers, and government-sponsored agencies. This paper identifies, compares, and contrasts cost-based and charge reimbursement methods that are common in this country.
Identification of Reimbursement Methods
Third-party payers rely on established models to reimburse medical providers for the services rendered to the targeted patients. The first common one is known as cost-based reimbursement. Under this model, the payer is required to cater to the financial costs incurred through the provision of health care and support to the insured (Shi & Singh, 2018). The second one is known as the prospective reimbursement technique. This method allows the payer to consider rates predetermined and established before the insured medical services are provided.
Comparing and Contrasting the Methods
These two reimbursement types have unique differences and similarities that both clients and providers should be aware of. The first aspect associated with these techniques is that they ensure that patients have medical cover before receiving the intended services. The second one is that a third-party payer will have to be involved to reimburse payments to providers for the medical care or services received (Cai et al., 2020). The third similarity is that payers will have to pay for the medical services are offered under the insurance plans. Those who want to purchase insurance cover should consider these aspects to make informed decisions.
However, the identified reimbursement methods have significant differences that make each of them unique. The first attribute is that a prospective-based model will be in accordance with a rate that is established prior by the payer (Shi & Singh, 2018). On the other hand, the cost-based method is designed in such a way that the payer will meet the total costs for the services provided to the patient. The second difference is that the prospective approach does not provide payments based on a chargemaster or the incurred costs. The recipient and the third-party payer should settle on the right amount before the provision of the intended services. The costs or expenses incurred during the medical process will determine the amount remitted under the cost-based reimbursement method.
The third difference is that prospective payments would be associated with various systems. For example, providers could receive reimbursements based on specific parameters, such as procedures, diagnoses, per diem, and bundled (Cai et al., 2020). These separations are essential to guide physicians to examine the available plans and consider them when providing medical services to their respective patients. However, cost-based reimbursement will be characterized by periodic payments until the total costs have been cleared (Ahluwalia et al., 2017). After the end of the contract, the payer will have to reconcile the documents to ensure that the providers receive the intended payments.
Conclusion
The above discussion has identified two unique reimbursements methods that third-party payers should consider when providing insurance cover to their patients. A proper understanding of these unique differences and similarities is essential since it can guide more people to make informed decisions when planning to get the relevant health insurance cover. This knowledge will make it easier for them to get the relevant medical services depending on their financial statuses.
References
Ahluwalia, S. C., Damberg, C. L., Silverman, M., Motala, A., & Shikelle, P. G. (2017). What defines a high-performing health care delivery system: A systematic review. The Joint Commission Journal on Quality and Patient Safety, 43(9), 450-459. Web.
Cai, C., Runte, J., Ostrer, I., Berry, K., Ponce, N., Rodriguez, M., Bertozzi, S., White, J. S., & Kahn, J. G. (2020). Projected costs of single-payer healthcare financing in the United States: A systematic review of economic analyses. PLoS Medicine, 17(1), e1003013. Web.
Shi, L., & Singh, D. (2018). Essential of the U.S. health care system (5th ed.). Jones & Bartlett Learning.