2. Reimbursement Methods
Fee For Service: is when the amount of
services dictate the amount of reimbursements
given to a physician.
Capitation: is when reimbursements given to a
physician are based off of a fixed amount per
enrollee.
Both of these reimbursement methods have
been associated with improper patient care
3. Reasons For Improper Care Under
Fee For Service
High levels of fraudulent acts have caused
physicians to provide inadequate care to
patients.
The fraudulent acts are self-referrals,
kickbacks, and up-coding.
4. Self-Referrals
A self-referral is when a physician refers
himself or to another physician working in
correlation with that physician only to
maximize financial compensation.
38%
48% 49%
38%
0%
10%
20%
30%
40%
50%
60%
Upper
Respiratory
Symptoms
Pregnancy Low Back Pain Difficulty
Urination
To the left is a graph
showing the percentage
of self-referral acts
given by
physicians, under
specific diagnoses.
5. Laws Prohibiting Self-Referrals
Under the Patient Referral Act, there are Stark
I and II laws that prohibit self-referral acts.
Although these laws are helpful when
combating against self-referral acts, they lack
in the ability to stop self-referral acts if
physicians were to buy more than one property
to practice their professions.
6. Kickbacks
A kickback is when physicians make payments
with the intent of influencing the purchase and
sale of healthcare-related goods or services.
7. Kickback Case:
Hanlester Network V. Shalala
During this court case the government was
trying the prove the defendant guilty of
committing the fraudulent act of kickbacking.
In order to do this they had to prove that the
defendant was aware of the law, and was
acting illegally.
The proof was the secretly transferred cash in
exchange for patient referrals.
8. Upcoding Diagnoses
Physicians commit this fraud by increasing the
diagnosing codes of patients, so that they can
receive greater reimbursements.
Diagnosing codes are used to group and
identify diseases, disorders, and symptoms
that have been acquired by a patient.
10. Recognizing the Error
Looking in the highlighted box, represent
numbered codes physicians would use to
represent specific symptoms and other
disorders. These codes are commonly known
as ICD-9 codes.
For instance, the number 785.1 represents
heart palpitations and 272 represents
hypercholesterolemia. So if you know that you
do not have this symptom and you know that
you were not diagnosed with this disorder you
can bring this bill back to be fixed.
11. Percent of Fraudulent Cases
Under Fee for Service
11.40% 11.40%
23.70%
45.60%
14.90%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Percent of Cases
Percent of Cases
To the left is a graph
of the percent of
fraudulent cases
under Fee for Service
that have occurred in
the United States
12. Capitation
Capitation is still associated with improper
care, but it is a bit better than Fee for Service.
The reason for this is that physicians are not
associated with any types of fraud and that
they are paying closer attention to their
patients, because they have to regulate the
amount of services given to each individual
patient, because they are given a limited
amount of reimbursement funding by the
government.
13. Capitation Conundrum for
Patients
Patients who are under this system will receive
less quality care, because they will not be
receiving the proper amount of care due to
limited budgeting given to physicians.
This means that patients who are very ill will
be receiving less care to get better, so that
every other patient within that practice
receives some sort of care.
14. Capitation Conundrum for
Physicians
Unlike Fee for Service, Physicians who are
under this method of reimbursement will be
receiving less funding.
This will make it difficult for them to survive in
the competitive healthcare industry, which in
turn could cause them to become in debt.
As a result, they will be cutting the amount of
employees working in the practice, to make up
the difference in cost.
15. Pay for Performance
Pay for performance is a better alternative to
both fee for service and capitation.
It improves patient care through the creation of
sophisticated databases that keep track of
each physician’s quality of individual care.
Based on the quality of care, the amount of
reimbursements received by physicians can
increase or decrease.
16. Conclusion
Fee for service and capitation are the causes
for the decline of patient quality care.
Pay for performance is just a better alternative
it supports both patients and physicians.
Patient centered care is not based off of the
desire for physicians to gain maximize
reimbursements, but for the best results
possible for improving a patient’s health status.
