Contrast Medicaid Payment for Physician with Medicaid with Hospitals

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Contrast the Medicare method of payment for physicians with the Medicare method of payment for hospitals. Medicare reimbursements for physicians and for hospitals have some similarities and have some major differences. In one regard they are the same in the sense providers and hospitals are both federally funded for services and not state funded. Another similarity is that on average they are only given a percentage of the payment from the government leaving sometimes a gap in money from what services truly cost. Where the difference lays are how they are reimbursed for services provided. A physician in a practice will come and see a patient. They will bill for the time, level of care and acuity actually provided to the patient. They will then bill for the procedure they provided for that patient. They will receive a percentage that Medicare will pay for services provided. The physicians use Current Procedure Terminology (CPT) codes and health care common procedural coding system (HCPCS). These codes when imputed score the fee schedule and give a physician Relative Value units to determine a payment. This service is more of a fee for service approach. In a hospital you are reimbursed by a Diagnostic related group (DRG). The hospital uses DRG codes by matching the highest acuity diagnosis. The CPT’s will fall into the patients visit and grand total, but will only get paid for the price of that DRG and not the CPT. An example of this would be if patient comes in for heart failure. This patient is given a DRG of heart failure if they meet the criteria of a low ejection fraction. Throughout their stay, they received several codes that fall within the DRG. “At Wellstar there are three codes ranging from DRG 291 which pays close to 9,000 dollars and DRG 293 which pays nearly 4,000 dollars.” (S. Shuggs, personal communication, October 14, 2012) In a hospital setting we must be very efficient with care, because the hospital will only receive payment for that...
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