Case Study: You are assessing the payer–patient mix for a health care organization. Currently, your payer mix is 40% Medicare, 10% Medicaid, 25% traditional indemnity insurance, 20% managed care, and 5% self-pay patients. Complete the following: Using the most common office visit, CPT code 99214, determine the reimbursement from the Centers for Medicare and Medicaid Services (online fee schedule available for Medicare). Using the same CPT code, 99214, determine the be possible to obtain actual reimbursement information from your personal insurance carrier. If the information is not available, assume reimbursement by traditional indemnity insurance is usually 200% reimbursed more than Medicare and Medicaid, and managed care is usually 133% more than Medicare and Medicaid. Compose an accounts receivable benchmark from this information showing columns for current, 30–60, 61–90, 90–120, and greater than 120 days. Assess the information for areas of improved reimbursement of at least 20% or more. Evaluate the options available to change the payer–patient mix with consideration of related legal and ethical issues. Propose a best strategy with justification and rationale based on effective decision-making tenets.

Assessing the payer-patient mix for a healthcare organization is a critical task for healthcare administrators and managers. It involves understanding the distribution of payment sources and patients within the organization, which directly impacts financial outcomes and reimbursement rates. In this case study, the payer mix consists of 40% Medicare, 10% Medicaid, 25% traditional indemnity insurance, 20% managed care, and 5% self-pay patients.

To evaluate the reimbursement for the most common office visit, we will use the Current Procedural Terminology (CPT) code 99214. The reimbursement rate for this code can be obtained from the Centers for Medicare and Medicaid Services (CMS) online fee schedule, as Medicare is a significant payer in the mix.

Using the CMS fee schedule, we can determine the reimbursement amount for CPT code 99214. This information is readily available and can be accessed online. By inputting the code and referring to the fee schedule, the specific reimbursement amount for this code can be obtained.

However, the information for reimbursement from personal insurance carriers may not be readily available. If the reimbursement information is not accessible, we can make certain assumptions based on industry standards. For example, traditional indemnity insurance is usually reimbursed at a rate that is 200% higher than Medicare and Medicaid, while managed care typically reimburses at a rate 133% higher than Medicare and Medicaid.

Using these assumptions, we can estimate the reimbursement rates from traditional indemnity insurance and managed care for CPT code 99214. It is important to note that these assumptions are not precise and may vary based on specific contracts with insurance companies. However, they provide a reasonable baseline for analysis.

Once the reimbursement rates have been determined for each payer category, we can compose an accounts receivable benchmark. This benchmark will include columns for different time periods, such as current, 30-60 days, 61-90 days, 90-120 days, and greater than 120 days. The benchmark will showcase the amount of outstanding payments in each time period for each payer category.

The next step is to assess the information for areas where improved reimbursement can be achieved by at least 20% or more. By analyzing the benchmark data, we can identify payer categories that have a significantly higher number of outstanding payments or a lower reimbursement rate. These areas represent opportunities for improved reimbursement.

To improve reimbursement, there are several options available. One approach is to negotiate higher reimbursement rates with insurance companies. This can be done by demonstrating the value and quality of services provided by the healthcare organization and negotiating a more favorable contract. However, this option may not be feasible for all payer categories and may require extensive negotiation and legal considerations.

Another option is to enhance revenue diversification by shifting the payer-patient mix towards payers with higher reimbursement rates. This can be achieved by targeting marketing efforts towards specific patient populations, collaborating with insurance companies to develop tailored plans, or expanding services that align with higher-paying payer categories. For example, focusing on specialized services that are more likely to be covered by traditional indemnity insurance can potentially increase reimbursement rates.

When considering the options available to change the payer-patient mix, it is crucial to take into account legal and ethical issues. Ensuring compliance with legal regulations, such as anti-kickback and self-referral laws, is essential. Additionally, maintaining ethical standards in patient care and financial practices is paramount.

Based on effective decision-making tenets, the best strategy for improving reimbursement and changing the payer-patient mix will depend on the specific circumstances of the healthcare organization. It is imperative to conduct a comprehensive analysis of the organization’s financial situation, market dynamics, and patient demographics. By weighing the pros and cons of each option and the associated legal and ethical considerations, a strategy can be proposed that aligns with the organization’s mission, values, and financial objectives. Justification and rationale for the chosen strategy should be based on data-driven analysis and the potential impact on financial performance and patient outcomes.

In conclusion, assessing the payer-patient mix is crucial for healthcare organizations to understand their reimbursement sources and identify areas for improvement. By evaluating reimbursement rates using specific CPT codes, composing an accounts receivable benchmark, and analyzing the data, opportunities for improved reimbursement can be identified. Considering legal and ethical factors, organizations can develop a strategy to change the payer-patient mix and increase reimbursement rates, thereby enhancing financial performance and patient care.