Corporate Finance Case

Noiralith Herrera                                                                    June 14, 2014

N0768938

Assignment II

3.1 Briefly describe the major third party payer

Private brokers are BC/BS, self-insured, and commercial insurance. These are separate of the government. Some of these guarantors are profitable and some are not-for-profit. BC/BS is not-for-profit, various commercial insurers are Humana or Aetna personal or group policies can be obtained, and self-insured are those who put some money in reserve that is exclusively an insurance to compensate any medical occurrence that may take place. Self-insurance is actually only an option for prosperous individuals.

3.5 Describe Provider incentives and risks under each of the following reimbursement methods:

• Cost Based: Compensation connected to type/ harshness of cases. It links disbursement to hospitals to the figure and the rigorousness of person cases treated. Every patient is classified in a definite diagnostic group according to his/her most important analysis and, likewise, a fixed repayment is provided to the hospital for treating the person.  This fee system generates incentives to center on cost-effective patients, to abbreviate length of hospital entrance, to provide a reduced amount of care, and admit additional patients
• Charge Based, including discounted charges:  it is just a reduction applied to the costs and bills associated with health care that has not been discussed for previously. It is simply the charge of health care, less than a discounted that is predetermined by the state. Insurance suppliers supervised by the state, such as Medicare and Medicaid, often utilize use the discounted charge method.
• Prospective payment: A Prospective Payment System (PPS) is a process of repayment in which Medicare payment is completed based on a prearranged, fixed rate.
• Capitation: Is a flat periodic compensation per enrollee to a healthcare supplier; it is the only repayment for providing services to a distinct people. Commonly, capitation expenditures are expressed as some dollar amount per member per month (PMPM), where the word "member" characteristically means enrollee in some managed care plan, which is frequently a health maintenance organization (HMO).

3.7 How does Medicare reimburse Hospitals for inpatient stays

Medicare’s inpatient hospital assistance covers beneficiaries for 90 days of care per occurrence of illness, with a 60-day life span reserve. Illness episodes begin when beneficiaries are admitted and end after they have been out of the hospital or a skilled nursing capacity for 60 consecutive days.

 3.8 How does Medicare reimburse physician services