Module 4 – Case: PAYING FOR HOSPITAL AND PHYSICIAN SERVICES
Assignment Overview
Third-party payers are the insurers that reimburse physicians and health care
systems for services rendered – which identifies them as a central source of
revenue for physicians and health care systems. This includes the two main
categories of payers: the private insurances (such as Blue Cross/Blue Shield,
etc.), and the public/government programs (such as
Medicare/Medicaid/SCHIPs).
Third-party payers use a variety of reimbursement methods to pay providers and
hospitals, depending on the specific payer involved and also the specific
service(s) provided (outpatient or inpatient). The calculations vary and can be
complicated, but they are critical to understand in terms of the basic math
behind them. It’s also important to understand how the different payers compare
in terms of reimbursement levels. Let’s move forward to examine how services
are paid for by the third-party payers.
Case Assignment
Using the information in the Module 4 overview and required readings, as well
as some additional research in peer-reviewed sources, complete your Case
assignment by answering the questions in the following two-part assignment.
Please show all formulas and calculations of your work in your paper.
Part I – Paying for Hospital Services – Overview
Mrs. Jones is a 74-year-old woman who is currently hospitalized for an ischemic
stroke. She’s at a large urban Philadelphia hospital, and in the past few days,
she’s incurred $189,000 in Medicare-approved charges for her care. Using the
information provided in this Module, as well as the Hospital Payments Example
(found in the Course’s table of contents link under “Presentations”), use the
DRG table below to answer the following questions. Be sure to include all
formulas and calculations used in your paper.
DRG
Description
Case Weight
163.3
Ischemic stroke
2.0150
338.0
Appendix removal
1.8911
870.1
Septicemia/severe sepsis
4.3296
Part I – Assignment
In approximately three pages, answer the following questions related to Mrs.
Jones’ ischemic stroke. Show all formulas and calculations of your work.
1. What is the operating payment to be paid to the hospital?
2. What is the capital payment to be paid to the hospital?
3. Will the hospital be eligible for the Medicare outlier payment for this patient?
4. What is the total payment due to the hospital?
Part II – Paying for Physician Services – Overview
Mr. Thompson is an 83-year-old Medicare beneficiary. He is under the care of
Dr. Heintz. Assume the following values for services provided by Dr. Heintz:
Categories
RVU
Geographic Cost Index
Product
Work
28.16
1.371
24.35
Practice Expense
37.47
1.925
68.08
Malpractice
11.49
0.668
4.24
Conversion Factor: 51.52
Part II – Assignment
In approximately three pages, answer the following questions. Show all formulas
and calculations of your work.
1. How much will Medicare pay Dr. Heintz if he is a Medicare participating
physician? How much out-of-pocket payment will Mr. Thompson be
responsible for?
2. How much will Medicare pay Dr. Heintz if he is a Medicare non-participating
physician who elects assignment? How much out-of-pocket payment will Mr.
Thompson be responsible for?
3. How much will Medicare pay Dr. Heintz if he is a Medicare non-participating
physician who does not elect assignment? How much out-of-pocket payment
will Mr. Thompson be responsible for?
Assignment Expectations
1. Conduct additional research to gather sufficient information to support your
analysis.
2. Provide a response of 3-5 pages, not including title page and references. It is
required that you show the formulas and calculations performed to arrive at
your answers.
3. There are multiple required items to be addressed herein; please use
subheadings to show where you are responding to each required item and to
ensure that none are omitted.
4. Support your paper with peer-reviewed articles, with at least 3 references.
Use the following link for additional information on how to recognize peerreviewed journals:
Angelo State University Library. (n.d.). Library Guides: How to recognize
peer-reviewed (refereed) journals. Retrieved from
https://www.angelo.edu/services/library/handouts/peerrev.php
5. You may use the following source to assist in formatting your assignment:
Purdue Online Writing Lab. (n.d.). General APA guidelines. Retrieved from
https://owl.english.purdue.edu/owl/resource/560/01/.
6. For additional information on reliability of sources, review the following
source:
Georgetown University Library. (n.d.). Evaluating internet resources.
Retrieved from https://www.library.georgetown.edu/tutorials/researchguides/evaluating-internet-content
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