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Financial and Economic Basics (revenue Streams) Healthcare Financing

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In my experience as a long term care nurse I have dealt with Medicare, Medicaid, VA and private insurances and private pay for payment or reimbursement of healthcare services.

Revenue is the earned capital by a (in this case) healthcare group or provider; it can be medical services, hospice, hospital, clinic, home health or therapy services and even durable medical supplies: that is, it can be the tangible or predicted cash inflow for the business of healthcare. In health care, income is customarily received by providing some type of health care related amenities to patients.

Revenue flows into the healthcare business and is sometimes referred to as the revenue stream (Baker and Baker).

Revenue is the price of services provided, stated as the healthcare full pre-determined charges. For example, hospital A's full pre-determined charge for an appendectomy may be $2,000 but Giant Health Plan bargained a controlled care agreement whereby the plan (insurance) pays only $1895 for that procedure, the patient is then responsible for the remained $105. The income number (the full pre-determined charge is $2000.The hospital will collect the $1895 from the insurance company and bill the patient for the $105. The $1895 is money the hospital can count on as income; income can be accepted in the form of cash or credit. Insurance help pay the medical bills incurred by patients. Usually the large part of the bill is covered by the insurance and leaving a 10 to 20 percent for the patient (Baker and Baker, 2011).

Liability Insurance (Government based insurance)

Medicare is generally insurance coverage for people age 65 and over. However, others that may qualify for Medicare benefits are those with a disability under age 65, or those with certain medical conditions such as kidney fail receiving dialysis or had renal transplant (CMS).

Medicare has 5 parts the two most important parts are Part A (hospital coverage) and part B (outpatient services).

Part A is the hospital coverage part of Medicare, and is not an optional for Medicare recipients. Most a hospital bill (80%) is paid by Medicare. The Social Security the hospital insurance monthly premium from the monthly SOC SEC check and directs it to a Medicare Trust Fund. Medicare has deductibles like any insurance program. As of 2000, the share of hospital payment for Medicare recipients was $776 for a hospital stay of 1 to 60 days. A recipient can expect a semiprivate room, meals, general nursing, and other health services while in the hospital (CMS).. Following discharge a patient can expect Part A to pay for outpatient services if they are needed, such as home health care under certain conditions, durable medical equipment (wheelchairs, hospital beds, oxygen, and walkers), hospice care, and blood transfusions (CMS).

Part B. This part of Medicare is optional, and a recipient can choose to wave this part. However part B pays physician services, laboratory, outpatient medical and surgical services, supplies, and outpatient hospital services, therapy services under appropriate conditions, patients as well as home health care, DME, and hospice services(CMS),. This is not a100% coverage, only 80% after a $100.00 deductible has been satisfied. This 20% is a "gap," so to fill the gap most seniors will opt to take a second insurance policy, a commercial insurance such as AARP that will cover the remaining balance that Medicare does not cover (CMS).

There are two specialty groups that oversee how Medicare benefits are utilized

Peer Review Organizations (PRO). The federal government compensates health care experts to keep an eye on and enhance care provided to recipients of Medicare. This group reviews complaints related to as care received at a hospital, or other healthcare providers such as outpatient clinic, nursing home, ambulatory surgery centers, or home health agency, or from Medicare managed care plans (Example Humana Gold Plans) (CMS).

Financial In-between: Insurance Houses are appointed by the federal government to pay all Medicare Part A and Part B bills, the federal government contracts with different companies such a Blue Cross and Blue Shield to pay the bills (CMS).

Medicaid is a health care program (liability insurance) that is a government-funded (subsidized) by the U.S. federal and state government that reimburses for the medical expenses pay medical cost for those who are unable. Main management of this program is to handled medical cost at the federal level, however, each state can:

* Determines its own criteria to determine who is appropriate to receive services

* Regulates the kind, quantity, length, and range of services

* Establishes how much will be paid for services

* Controls its individual Medicaid program.

What services are provided with Medicaid?

Every state establishes its individual Medicaid appropriateness guidelines. The Medicaid program (public health program) is designed to provide low income individuals or families with medical coverage, however, eligibility depends on meeting requirements based on age, pregnancy status, disability status, other assets, and citizenship.

Each states is the final decision maker in regards to their Medicaid programs coverage, however each states has to meet certain fixed federal conditions mandated in order to receive federal matching funds. Included are the following Mandates according to Medical News Today;




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