Retrospective Reimbursement Requires Third Ihp 63

Retrospective Reimbursement Requires Third Ihp 63

Retrospective Reimbursement Requires Third Ihp 63

From the reading this week, compare and contrast two methods of reimbursement, describing the advantages and disadvantages of each method. Of the two methods you chose, which do you think provides the best process from a patient perspective?


Hello class,

My name is Stephanie Crook. I’m a full-time mom of 2, wife and Regional Practice Operations Manger for a large University Health System in Connecticut. I’ve been in healthcare for more than 15 years, starting with my first job out of high school as a Hospital Registrar. My future plans involve a continued upward trajectory, hopefully leading me to a final destination of President of Ambulatory or Medical Group Services at a major health system. Achieving a greater understanding of the types of reimbursement plans available and how they could be changed to better benefit stakeholders is a key component of getting me to my final destination.

The two payment methods I was most drawn to in this week’s reading are the fee-for-service and the global or capitation model. Having worked in healthcare for so long, I am relatively familiar with the fee-for-service model. Most beneficial to the healthcare provider, reimbursement are based on individual charges. Providers are paid for exactly the services they provide. This could also be considered a con as ordering additional testing and providing unnecessary services are common with this model in an effort to attain a higher rate. Likewise, it is exceedingly more difficult to apply the unethical practice of upcharging as payers have grown wise of these efforts and have deployed auditing processes to identify true medical necessity. The capitation model is most in line with the quality-based model that essentially provides a flat rate reimbursement based on the care a patient is likely to need. The provider then cares for the patient throughout the year with the goal of spending less in treatment than what was paid out. A major pro of this plan is the face value aim of keeping patients healthy and not in need of curative care. Care plans are more appropriately directed at preventive measures that keep the patient healthy rather than treatment of a patient who is sick. A con of this plan is also the face value concern that patients who are already ill with pre-existing chronic conditions are likely to need a greater, more expensive level of care that may not be entirely covered by the global payment.

From a patient perspective, each plan has its pluses and minuses. A fee for service model gives the patient greater autonomy with regard to where they seek care. Since each provider bills individually, the patient can seek care at a variety of locations with a mix of providers from different systems or affiliations. In a capitation plan, the patient is more committed to seeking care within one system as that is where the money lies; however, there is far less risk of over-utilization of billable services. I believe the latter is preferable from the patient’s point of view.

Looking forward to learning with you all this term!


Healthcare: An Overview of Healthcare Reimbursement Methods


Hello, my name is Cynthia Lebron and I will be attending class with all you wonderful people from Reading, Pennsylvania. I am going for my Healthcare Administration degree, and since my previous classes, I plan on working within a nonprofit organization where I can help my community thrive. I am single with two older brothers and two handsome nephews and enjoy doing arts & crafts, cooking, listening to music, and dancing. I also enjoy reading books regarding health and fitness and content relating to lifestyle improvements. I am currently a part-time student and a current employee with Bayada Home Healthcare as a home health aide. Within my job description, we only deal with taking care of the clients and we interact with the clients families while providing assisting clients with everyday activities of daily living. This course provides an in-depth exploration of the healthcare reimbursement system and financial principles relevant to strategic planning for the healthcare organizations (Casto, & Forrestal, 2018). Learning healthcare reimbursement methods, including revenue management, terminology, and current trends, from this course will allow me to understand the basics of how my clients pay for services and how my company gets reimbursements from various government services (Casto, & Forrestal, 2018). I do have some understanding of the process under financial reimbursement but this course will clarify the process of financial coverage in detail and in both perspectives of the healthcare organization and the client’s responsibility.

Methods of Reimbursements

Working as an employee within the healthcare industry, learning about the fundamental healthcare reimbursement methodologies and payment processing allows for an effective role of responsibilities as a health information management (HIM) (Rajpal, Peruchi, & Sawhney, 2013). It is the duty of a HIM to control the difference between revenue and cost, known as profits (Casto, 2018). According to our textbook, there are two concepts of fundamental healthcare reimbursement methodologies: retrospective reimbursement and prospective reimbursement (Casto, 2018). Apart of each method of reimbursement there involves three stakeholders: a health care purchaser (payer), a health care provider (hospital, physicians etc.) and the patient (Rajpal, Peruchi, & Sawhney, 2013). The interaction among shareholders is established by a contract between the patient, the purchaser and the provider by an agreement. This agreement states that the health care provider promises to deliver the service to the set of people being covered, and in turn is reimbursed by the purchaser according to the conditions agreed upon by both the players in the beginning (i.e. a contract or payment system) (Rajpal, Peruchi, & Sawhney, 2013). In relation to my job Bayada Home Healthcare, the choice of financial reimbursements establishes how third party payers will cover charges for clients either under government-based entities, commercial health insurance, workers’ compensation, or private insurance (Casto, 2018; Bayada, 2020).

Retrospective Verses Prospective

There are two types of healthcare reimbursement methodologies under the health information management (HIM) responsibilities (Casto, 2018). Within the healthcare industry, there is the retrospective reimbursement method and the prospective reimbursement (Casto, 2018). The difference between the two is the sources of finances and process of reimbursement regarding patient services (Casto, 2018). Retrospective reimbursement requires third party payer resources to deliver services, and the payer determines the total reimbursement of the health services after receiving patient services (Casto, 2018). Prospective reimbursement regards providers receiving a pre-set amount for all services within a specific timeframe, and the payment amount establishes the time set covering most cost-effective care (Casto, 2018). A major difference between the two methodologies is the subcategories of payment methods each method has. Retrospective reimbursement consists of payment methods for health services considering fee schedule, percent of billed charges, and per diem payments (Casto, 2018). Prospective reimbursement consists of subcategories such as capitation, case rate, global payment, and bundled payment (Casto, 2018). After comparing and contrasting the reimbursement methods there are both advantages and disadvantages, but for this example, subcategories such as fee schedule and capitation will show differences in regards to patient financial services.

Fee schedule, as an example of a retrospective reimbursement method, is a fee schedule drawn by a list of predetermined fees that third party payers allows for payment for a set of services. Payments are set in advance for given services (Casto, 2018). Capitation, as an example of a prospective reimbursement method, is a payment method for services in which third party payers reimburse providers for a fixed, per capita amount for a period (Casto, 2018). In retrospective, these forms of payment process are opposites because Fee schedule involves allowable charges to reimburse the providers while capitation involves reimbursements of providers from money paid each month by individuals (Casto, 2018). These methods are interestingly common with healthcare industry as one relates to a predetermined money amount and the other to set amounts per head. Overall, what best works for patients processing is capitation. Since it focuses on the amounts to be reimburse paid each month by health insurance, it means more services required will not increase services, and as a prospective method increases saves from not wasting costs on unnecessary services (Casto, 2018).

Additional Note: Another interesting comparison of retrospective and prospective healthcare reimbursement methodologies would be per diem and case rate methods as they are similar in payment forms by payment rates and shareholder reimbursements but different in the financial amounts and associated coverages over services (Casto, 2018).


Bayada Personal Care and Companionship. (2020). Bayada. Retrieved from…

Rajpal, G., Peruchi, R. S., & Sawhney, R. (2013). Healthcare Reimbursement Plans: Methodology, Advantages and Disadvantages. IIE Annual Conference.Proceedings, 3528-3535. Retrieved from

Casto, A. (2018). Healthcare reimbursement methodologies. Principles of Healthcare Reimbursement (6th ed.). Chicago: IL: AHIMA.