This document provides an outline for a paper comparing different methods of healthcare reimbursement in Saudi Arabia. It includes sections on introducing reimbursement, elements of reimbursement like coverage and coding, types of reimbursement like fee-for-service and capitation, comparing advantages and disadvantages of different methods, impacts on healthcare facilities, and trends in healthcare reimbursement. Sample text is provided for several sections, including definitions and examples of fee-for-service reimbursement methods, capitation, and value-based purchasing. The document aims to serve as a starting point for a thorough comparison of reimbursement methods in the Saudi healthcare system.

1. Research several types of reimbursement methods for healthcare
for physicians in Saudi Arabia. Draft a paper comparing the
different methods.
Be sure to include:
Reimbursement of Claims
1. Introduction
2. Elements of Reimbursement
3. Reimbursement in Saudi Arabia
4. Evaluating Types of Reimbursement
5. Compare and contrast Types of Reimbursement
6. Impact of reimbursement on healthcare facilities
7. Trends in Healthcare Reimbursement
8. Conclusion
The following information can be used
1- Introduction (minimum 100 words) Definition of
reimbursement
Reimbursement is another term for payment. A provider or
facility submits a claim. Then the health insurance company or
third-party administrator pays the provider or facility for their
claim based on their contract. It sounds simple, but the payment
arrangements in healthcare can be complex. As providers do not
generally receive full payment for services upon a patient’s
receipt of services under a health insurance scheme,
reimbursement becomes essential to a provider’s livelihood.
2- Elements of Reimbursement (minimum 100 words)
· Coverage refers to a set of rules that explain when a payer will
or will not pay for a product or service. Coverage can vary by
payer and depends on what each payer considers to be medically
necessary. In general, payers want to see regulatory approval,
strong clinical evidence demonstrating the treatment is at least

2. as beneficial as the established alternative, and a demonstration
of the treatment’s cost-effectiveness. Payers expect well-
designed clinical trials with results published in peer-reviewed
journals. Support from the physician community and
professional societies are also increasingly important to
adoption and coverage of new technology.
· Coding refers to the sets of alphanumeric codes that are the
language of billing. Providers use codes to tell a payer what
products or services were provided and why. There are three
main sets of codes: CPT, HCPCS, and ICD-10-CM. Choosing
the right code to accurately describe a product or service while
maximizing payment requires a detailed understanding of the
coding structures. If no code exists, it is important to
understand the approval process for acquiring a new one –
whether it be a CPT code used by physicians to describe what is
done to a patient, or an HCPCS code which describe products
not described by CPT codes. Finally, it is important to
understand that choosing the wrong code creates not only
financial implications but also legal culpability.
· Payment is driven by the coding systems and is probably the
most complicated element of reimbursement. Although coding
drives payment, reimbursement is not quite as simple as just
submitting an active code. Payment is driven by complex
payment methodologies that differ depending on the site of care
where delivery is provided. For example, payment for the same
procedure in an Ambulatory Surgery Center (ASC) is often less
than payment for the same procedure performed in a hospital
outpatient facility.
3- Reimbursement in Saudi Arabia (minimum 100 words)
While the majority of healthcare is paid for by the government,
reimbursement of medical services by providers can be seen in
the private sector of Saudi Arabia. Now is therefore the best
time to intervene and bring in regulation and standardization.
The two main vehicles for carrying out reimbursement-related
inventions are the aforementioned Central Board for the
Accreditation of Health Institutions CBAHI and Council of

3. Cooperative Health Insurance CCHI. The avenues for
intervention are many. One avenue is to introduce regulation in
chargemasters, building on the drug regulation mechanisms
already in place. Another avenue is to standardize the electronic
transfer protocol involving providers, insurers, and banks. Other
avenues include introducing bundled payments, linking payment
to quality, and using DRG-related payments.
Pharmaceuticals and Medical Devices
Even in countries where all healthcare services are covered free
of charge, like the United Kingdom and Saudi Arabia, not all
items like pharmaceuticals and medical devices receive the
same treatment. It should be noted that there is reimbursement
to some extent for pharmaceuticals in Saudi Arabia; however, it
varies between sectors. For example, drugs covered under the
Ministry of Health might not be covered under the Kingdom of
Saudi Arabia Ministry of National Guard-Health Affairs. The
same is true for private health insurance. Medication pricing is
regulated by the Saudi Food & Drug Authority, but a pricing list
by the SFDA does not ensure your medication will be
reimbursed. In the event your insurance does not cover your
medication, you have the option to pay out-of-pocket (Al-
Saggabi, 2017).
4- Evaluating Types of Reimbursement
1# fee-for-service (minimum 100 words)
Fee-for service (FFS) is healthcare’s most traditional payment
model where physicians and healthcare providers are
reimbursed by insurance companies and government agencies
(third-party payers) based on the number of services they
provide, or the number of procedures they order. Payments are
unbundled and paid for separately, so every time patients have a
doctor’s appointment, a surgical consultation, or a hospital stay,
these third-party payers are billed for each visit, test, procedure,
and treatment provided, even though some of these may not be
needed, or supported by evidence-based data. Three Types of
Fee-For-Service Reimbursement
a) Cost-based Reimbursement (minimum 100 words)

4. Under this fee-for-service type of reimbursement, the payer
agrees to pay the provider for the costs of providing medical
services to its insureds. This is limited to allowable costs
directly related to healthcare services. Under this method,
administrative costs would not be included in the reimbursement
(Gapenski & Reiter, 2015).
b) Charge-based Reimbursement (minimum 100 words)
This occurs based on a pre-established rate schedule between
the provider and insurer, called a chargemaster or fee schedule.
This is a negotiated, predetermined amount usually lower than a
provider’s general charge (Gapenski & Reiter, 2015). The
positive for this type of payment system is that insurers can
better predict costs and encourage patient access to care;
however, it can lead to overuse of services and fragmentation of
care.
c) Prospective Payments (minimum 100 words)
Under this fee-for-service reimbursement, rates are established
by the insurer before services are rendered but are not directly
related to costs or fee schedules. These rates can be based
solely on the procedure or diagnosis. Thus, more complicated
procedures will be costlier. Payments can also be based on a per
diem, meaning a facility will be reimbursed a predetermined
daily amount for a hospital stay. Bundled rates are a combined
payment for an episode of treatment. For example, in a bundled
payment scenario, a patient having baby payments for prenatal
and postnatal care would pay a single payment for these
services (Gapenski & Reiter, 2015). Schedules can have the
effect of encouraging providers to issue more services than
necessary but gives payers more. A common method in
prospective payments includes diagnosis related groups (DRGs).
Instead of paying for the actual costs of the medical procedure,
the payer expends the amount associated with the DRG. If the
hospital expends less than the DRG, then it will make a profit.

5. 2# Capitation (minimum 100 words)
This is a different type of payment method that relates only to a
covered life, regardless of the services performed. Thus, if
patient A received the check-up, skin swab, and MRI, only a set
amount would be paid, not each service provided. This payment
system generally requires a patient to see a primary care
physician before seeing a specialist. The goal of this of payment
is to incentivize providers to limit unnecessary services.
3# Value-based purchasing (minimum 100 words)
Value-based care is a philosophy of healthcare realized when
clinicians intentionally consider the quality of care provided,
and the overall outcomes of that care, in relation to cost-
efficiency. In the value-based care model doctors and specialists
consider “best practices” when treating patients, since they are
reimbursed for the quality and efficiency of care they provide.
Value-based care models encourage a “holistic,” team approach
to care, requiring coordination and communication between
physicians across specialties. When successful, physician entity
groups receive incentive payments for providing better care for
individuals at a lower cost. Quality and efficiency are the goal
of every value-based payment model.
(minimum 100 words) There are four conceptual “templates” for
value-based care, and each consists of multiple models specific
to specialty, episode, and patient population:
· Pay-for-Coordination: a primary care physician leads and
coordinates care between multiple providers and specialists to
manage a unified care plan for patients and to ensure efficiency
and quality; e.g., the Patient-centered Medical Homes (PCMH)
model.
· Pay-for-Performance (P4P): healthcare providers are
incentivized to meet certain quality and efficiency benchmark
measures. Physician reimbursements are directly related to
achieving these performance measures; e.g., the Hospital
Readmission Reduction (HRR) program and the Skilled Nursing
Facility Value-based Program (SNFVBP)
· Bundled Payment or Episode-of-Care Payment: this model

6. encourages quality and efficiency because healthcare providers
are reimbursed with a set amount of money to pay for a specific
episode of care, such as a hip replacement, and any
complications. Providers keep any realized net savings; e.g., the
newly launched Bundled Payments for Care Improvement—
Advanced (BPCI--Advanced) model and the Comprehensive
Care for Joint Replacement (CJR) model.
· Shared Savings Programs (Upside and Downside): physicians
form entity groups and provide population health management.
Quality and efficiency are achieved through coordinated, team
care and any realized net savings are given back to the provider:
e.g., Accountable Care Organizations (ACOs).
4# Diagnosis-related group based payment (minimum 100
words)
5- Compare and contrast the advantages and disadvantages of:
a. fee-for-service (minimum 100 words)
b. Capitation (minimum 100 words)
A disadvantage of this system is that preventative care might
not see the attention deserved due to the focus on the medical
problem being presented and could foster chronic conditions. In
addition, because this reimbursement is based on the number of
patients seen, a provider could accept more patients than they
would generally see to increase revenue, thus seeing patients for
shorter amount of times and potentially sacrificing quality
(Berenson, Upadhyay, Delbanco, & Murray, 2016).
c. Value-based purchasing (minimum 100 words)
6- Describe what reimbursement method produces the best
quality care (minimum 100 words)
In the traditional healthcare model, many times patients are left
confused and frustrated trying to navigate through the
healthcare system alone. For example, patients must manage
their own care path, moving from primary care physician, to
specialist, and then to surgery center in a way that is often
complicated and unpredictable. In addition, patients may see

7. multiple doctors, specialists, and surgeons who do not
communicate with each other, or do not have access to the same
important, patient data. In the traditional fee-for-service model,
providers lack the technology and the incentives to coordinate
patient care across the healthcare continuum. Physicians work
independently, remaining “siloed” in the fee-for-service
environment of rising healthcare costs.
The value-based model of healthcare shifts the emphasis of care
from simply reimbursing clinicians on tests and services
ordered to rewarding physicians for providing appropriate,
coordinated care that keeps patient populations healthy. Value-
based care programs are designed to drive down healthcare
costs and to improve patient care and population health, by
financially rewarding healthcare providers for considering
overall patient care, cost- efficiency, and patient outcomes. In
the new value-based care setting, healthcare professionals are
encouraged to engage with patients, to provide care appropriate
to each individual’s circumstances, to invest in new technology,
to evaluate processes, performance, and data, and to align their
efforts with multiple providers, taking a team approach to
healthcare. This shift in healthcare strategy is extremely
beneficial to the patient population, because it delivers a
connected care experience where patients receive more cost-
efficient, coordinated, appropriate, and effective care,
improving the health of individuals and their communities.
In spite of the inevitable shift from fee-for-
service reimbursement to value-based care reimbursement, Paul
Ginsberg, PhD, former Norman Topping Chair in Medicine and
Public Policy at the Sol Price School of Policy at the University
of Southern California, suggests that “this transition does not
mark the ‘death’ of FFS.” He points out that the “FFS chassis is
present in the shared savings models,” and he goes on to assert
that “the role of FFS is merely being de-emphasized.” The real
liability for the fee-for-service (FFS) reimbursement model,
compared to its counterpart, is that the fee-for-service model
has no mandates or incentives in place to encourage “best

8. practices” regarding value.
There are still hurdles to overcome in the transition from fee-
for-service to value-based reimbursement, but value-based care
is here to stay, establishing its foothold in the healthcare
industry, incentivizing cost-efficiency and quality, and creating
structures that reward physicians for coordinated, appropriate,
and effective care.
7- What impact does reimbursement have on healthcare
facilities? (minimum 100 words)
Reimbursement systems provide incentives to health care
providers and may drive physician behavior. Tao, Agerholm, &
Burström (2016) conducted a systematic literature review that
assesses the impact of reimbursement system on socioeconomic
and racial inequalities in access, utilization and quality of
primary care. Apparently, reimbursement systems seem to have
limited effect on socioeconomic and racial inequity in access,
utilization and quality of primary care. Capitation might have a
more beneficial impact on inequity in access to primary care
and number of ambulatory care sensitive admissions than fee-
for-service, but did worse in patient satisfaction. Pay-for-
performance had little or no impact on socioeconomic and racial
inequity in the management of diabetes, cardiovascular
diseases, chronic obstructive pulmonary disease, and preventive
services.
8- Trends in Healthcare Reimbursement (minimum 100 words)
One of the fastest growing industries within the healthcare
industry is technology. This is reflected on a national level,
where technology continues to be the driving force behind
everything from health, to education, to car manufacturing. The
revolving door of new technology (think about how frequently
Apple puts out a new product, or new phone) is intense for any
industry, but perhaps healthcare has the most to lose if they
resist the opportunities to integrate. A major concern for the

9. industry at the moment is coordination of care – and technology
is the force that will allow this dream to become a reality.
Utilizing it properly to achieve these outcomes, however, is no
simple task. Electronic medical records are theoretically a
dream – but in practice, they are often clunky and are much
harder for the older generation of physicians to embrace. New
doctors, who are never without their tablets and smartphones,
are willing to integrate new technology but many have grown
increasingly frustrated with the industry’s stubborn nature. For
this reason, it may be hard to keep healthcare desirable to the
next generation; they don’t want to find themselves trapped in a
stagnant industry.
For patients, too, the advent of various technologies in the last
two decades has allowed them to more actively participate in
care – sometimes much to their physician’s chagrin. While
having access to unlimited health information via Google may
be helpful to some, for many patients and their doctors it is a
bone of contention. While some patients may have the health
literacy necessary to parse out this information and turn it into a
useful dialog with their physician, the majority do not. The
average American reads at a middle school level, meaning that
even basic medical jargon might as well be a foreign language.
But even for health literate patients, technology has allowed
them to almost demand to have more control over their care.
Doctors are no longer necessarily the gatekeepers of
information – and many of them are displeased at being
displaced and are not chomping at the bit to welcome patients in
partnership.
While many of these new changes are exciting and have promise
for revamping our ailing healthcare system, it will also require
enormous leaps of faith from not just payers and hospitals, but
providers and patients. The lines between administration and
clinical practice, to patients and families are becoming more
and more blurred as the industry evolves – and physicians
especially are finding themselves stuck in the middle of frazzled
administrators with lots of demands and patients who are older

10. and sicker than ever before. When you put it like that, it makes
you think doctors aren’t paid nearly enough to be that stressed.
9- Conclusion (minimum 100 words)
References
· Bah, S., Almutawa, H. H. A., Alassaf, N. F. M., Al Hareky, M.
S., Hashishi, A. S. M., Alkhater, Z. J. H., & Ajaimi, J. A. M.
(2015). Pilot study of reimbursement practices in private
healthcare centers in the Eastern Province of Saudi Arabia: To
what extent do they meet international best practices?
Perspectives in Health Information Management, 12(Spring).
· Khan, T., Emeka, P., Suleiman, A., Alnutafy, F., & Aljadhey,
H. (2016). Pharmaceutical pricing policies and procedures in
Saudi Arabia. Therapeutic Innovation & Regulatory Science,
50(2), 236-240.
· Morgan, S., Daw, J., & Thomson, P. (2013). International best
practices for negotiating ‘reimbursement contracts’ with price
rebates from pharmaceutical companies. Health Affairs, 32(4),
771-777.
· Tao, W., Agerholm, J., & Burström, B. (2016). The impact of
reimbursement systems on equity in access and quality of
primary care: A systematic literature review. BMC Health
Services Research, 16, 542. http://doi.org/10.1186/s12913-016-
1805-8