Differentiate between fee for service, capitation, and episode-based payment

Differentiate between fee for service, capitation, and episode-based payment

Differentiate between fee for service, capitation, and episode-based payment

Topic 6 DQ 2

Jan 20-24, 2022

Differentiate between fee for service, capitation, and episode-based payment. Describe the structure of these payment methodologies along with the benefits and potential risk of each. Keep both the provider and patient in mind when composing your answers.

REPLY TO DISCUSSION

KNOWLEDGE CHECK

Identify the primary payment mechanism for your organization. Provide discussion with response.

REPLY

Fee-for-service (FFS) directly pays Medicaid participating physicians, clinics, hospitals, and providers a fee for each service rendered (Kaiser Family Foundation, n.d.). The FFS payment model rewards volume despite a patient’s health outcomes or quality of care (Kaiser Family Foundation, n.d.). Some disadvantages of the FFS payment model are fragmented care due to lack of care coordination, care gaps, duplicate services, and high out-of-pocket costs. Many consumers favor the FFS payment method due to the ability to choose providers without restrictions despite the high costs associated with the same (Penner, 2017). Individuals still widely use FFS, and many providers also favor this payment method.

Top nursing paper writers on hand to assist you with assignment : Differentiate between fee for service, capitation, and episode-based payment

<

Looking for nursing papers writing help? Top Nursing Papers Writing Service Online is here. A team of professional nursing essay writers ready to help. Relieve academic stress! With you all through your education course. There is no nursing subject we cannot handle.

 

 

Capitation is a healthcare payment system that pays a fixed amount per patient for a prescribed period by an insurer or physician association to the provider or hospital rendering services (Torrey, 2020). This financing model is a risk-sharing method for the cost of care from the payer to the provider (Penner, 2017). With capitation, a provider may be penalized for the use of services that value more than the fixed payment obtained or, on the other hand, may make a profit if the patient or consumer uses fewer services. If the patient or consumer does not use services, the provider still gets the fixed fee. One advantage to clients is that duplication of services is usually avoided, but a disadvantage is that providers may decrease time spent with one client.

Episode-based payments, also known as bundled payments, were created by the Center for Medicare and Medicaid Services (CMS) and came about with the Affordable Care Act to improve patient outcomes at a reduced cost to Medicare (Forrest, 2018). With this payment method, “the total allowable remittance for a patient’s sequence of care relating to a single episode of the medical event is predetermined instead of separate compensation for each service and provider along the way” (Forrest, 2018). Unlike FFS service payment, episode-based payments reward value over volume of care, and providers receive incentives when high-quality, cost-effective care is delivered.