Module 1 -- Significance of financial information
(main goal) reduce risks and maximize profits, cash flow management, investment decisions, long term goals of the organization
Module 1 -- Health care industry
(health care industry differs from other business organizations) dominance of not-for-profit hospitals, (main source of revenue) reimbursement from government and private insurers, contribution to social well being
Module 1 -- Health care industry : trends
rapid growth of health care industry (hospitals, long term care facilities, home health, ambulatory services), health care costs are increasing (healthcare is 17% of GDP), increasing importance of financial and cost information in decision making
Module 1 -- Uses of financial information
evaluating the financial condition, evaluating stewardship, assessing the efficiency, assessing the effectiveness, determining the compliance
Module 1 -- Financial condition
status of firm's asset, liability, and equity position
Module 1 -- Stewardship
management's responsibility to use the organization's resources properly (people, property, financial assets)
Module 1 -- Efficiency
getting the lowest possible cost of production (the ratio of outputs to inputs)
Module 1 -- Effectiveness
attainment of objectives through production of outputs
Module 1 -- Compliance
wether an organization's directives are followed
Module 1 -- Financial management functions
controllership (planning, reporting, evaluating) and treasurership (banking, collections, investment deals)
Module 2 -- Revenue Cycles
provide service, document service, establish charge, prepare claim, submit claim, receive payment
Module 2 -- Major Revenue Cycle Steps
registration, medical record/coding, charge entry/chargemaster, billing/claims preparation, claims editing
Module 2 -- Charge Master
(also known as the charge description master or CDM)
list of all items that the firm has established specific prices for
information from medical records and charge master flow into the actual claim
Module 1 -- NFP business oriented objective
maximize shareholders' value versus profit maximization
shareholders : community vs individuals
exempt from federal and most state taxes
Module 1 -- Investor owned entities objective
profit maximization for shareholders
shareholders : risk based equity investors
subject to double taxation (corporate and individual level)
Module 1 -- Government health care objective
public organizations owned by state or local government
not able to raise funds through equity investments
exempt from taxes like NFPs
Module 1 -- Nongovernmental NFP objective
perform voluntary services in communities
tax exempt
rely on public donations
(American Red Cross, American Cancer Society)
Module 2 -- HCPCS
healthcare common procedure coding system
physicians and clinical professionals use for reporting outpatient procedures and some physician inpatient procedures
Module 1 -- Examples of controllership
planning for control, reporting and interpreting, evaluating and consulting
Module 2 -- Registration
basic information collected on the patient
(insurance verification, copay/deductible payment, maybe financial counseling)
Module 2 -- Medical record/coding
hipaa requires diagnosis code and procedure code information that was put in medical records to be sent to payers
Module 2 -- Charge entry/chargemaster
charge capturing -- using an order entry system with a computer or barcodes to input charges
Module 2 -- Billing/claims preparation
using the CMS 1500 or UB 04 to submit claims
most submitted electronically
Module 2 -- Claims editing
software designed to find errors in claims
providers use it to maximize appropriate payment and to speed payment
Module 1 -- Examples of treasurership
providing capital, maintaining investor relations, providing short-term financing
Module 2 -- ICD
international classification of diseases
codes that provide information about diagnoses in both physician and clinical inpatient and outpatient settings
Module 1 -- Forms of business organizations (in healthcare)
not for profit business oriented, investor owned entities, government health care, nongovernmental not for profit
(differ in ownership structure)
Module 2 -- CMS-1500
used primarily for physician and professional claims submitted to medicare and many other payers
Module 2 -- UB-04
claim form used by most hospitals to report claims (to medicare and most other payers) for both inpatient and outpatient services
data used to determine DRGs and APCs (ambulatory payment classifications)
Module 3 -- Financial viability
In the long run, you cannot pay out more than you make
(the HCO must receive dollars payments from the community in an amount at least equal to the dollar payments it makes to its suppliers)
Module 3 -- Financial environment of healthcare organization (suppliers)
employees, equipment suppliers, service contractors, lenders
Module 3 -- Financial environment of healthcare organization (HCO)
hospital, nursing home, physician group, clinics
Module 3 -- Financial environment of healthcare organization (community)
patients (self payer and third party private/government insurers) and non patients (grants, contributions, tax support)
Module 3 -- Sources of funds
revenues (direct payment, private/government insurers, non operating revenues like parking tickets, gift shop purchases)
capital (taxable debt, tax-exempt debt, equity in stock and partnerships)
gifts
Capital
the assets or other financial resources available to a business
Equity
the value of the shares issued by a company
Module 3 -- Uses of funds
expenses (salaries, supplies, insurance)
capital (interest, debt principal, dividends)
investment (working capital, buildings/equipment, replacement reserves)
Module 3 -- Historical cost reimbursement
apportionment & reasonable cost
Module 3 -- Apportionment (historical cost reimbursement)
the manner in which costs are assigned/allocated to a specific payer (such as medicare)
related to billed charges
apportionment was necessary (if payer was historical cost reimbursement payer) to determine share of total cost
(medicare 3 million out of 15
Module 3 -- Reasonable cost (historical cost reimbursement)
qualification (introduced by the payer) to limit its total payment by placing limits/excluding costs that the payer deems reasonable
(examples include charity care, patient telephones, nursing education)
Module 3 -- Charge payment
payment for specific services (fee for service)
set at "list price" (charge description master)
(uninsured, out of network, HCO negotiators may pay this way)
Module 3 -- Capitation
a negotiated payment between payer (insurer) and provider (physician or hospital) to cover specific services for a defined population over a period of time regardless of the amount or type of care the person requires
Module 3 -- Bundle services
payment is grouped into a mutually exclusive set of service categories
payments to the provider are not necessarily related to the list of services provided and identified on the claim form
fixed fee specified per unit of service (per diem, per patient ra
Module 3 -- Units of payment
bundled service unit is a set of specific services that may be grouped into a bundled unit
service provided * cost per unit of services provided
Module 3 -- Units of payment (hospital inpatient)
medicare severity diagnosis related groups (MS-DRGs)
Module 3 -- Units of payment (hospital outpatient)
ambulatory patient classifications (APCs)
Module 3 -- Units of payment (physicians)
resource based relative value scale (RBRVS)
Module 3 -- Units of payment (skilled nursing facilities)
resource utilization groups (RUGs)
Module 3 -- Units of payment (home health agencies)
home health resource groups (HHRGs)
Module 3 -- Medicare benefits (part A)
hospital insurance
free to all beneficiaries if they have 10+ years of Medicare employment
Module 3 -- Medicare benefits (part B)
medical insurance
usually requires a monthly payment by the beneficiary
Module 3 -- Medicare benefits (part C)
medicare advantage plans
(additional beneficiary payments)
Module 3 -- Medicare benefits (part D)
prescription drug coverage
(additional beneficiary payments)
Module 3 -- Medicare benefits (categories of individuals)
65+
disabled individuals
end-stage renal disease
Module 3 -- Medicare payments (DRG operating payment)
hospital dollar rate * drg case weight
(hospital dollar rate determined by labor [should be multiplied by hospital's wage index] and non labor components)
(drg case weight determined by weight of drg)
(every hospital has a wage index value assigned to it)
Module 3 -- Medicare payments (capital payment)
drg weight
(standard amount
geographical adjustment factor)
national standardized federal payment rate for capital costs (similar to labor rates and non labor costs)
(could be disproportionate share adjustments, indirect medical education, or outlier adju
Module 3 -- Medicare payments (ambulatory patient classification)
current conversion factor * relative weight
can be more than one apc (unlike drgs)
(not all outpatient procedures have them.. some are fee-schedule and some aren't paid at all)
Module 3 -- Participating vs. non-participating physicians
participating physicians agree to accept medicare's assigned fee for service and only charge patient for copay
included in a directory of participants
have access to electronic claim transmission
receive payment at 100% prevailing charge , non-participati