Final Project Milestone Two: Payment Systems Draft Analysis

This report, a draft of the Federal and State Payment Systems portion of a healthcare finance project, examines the impact of federal and state regulations on healthcare leaders, focusing on recent economic policy changes and the concerns they raise. It analyzes reporting guidelines for Medicare and Medicaid, highlighting the challenges and opportunities these requirements present. The report delves into how healthcare organizations utilize financial principles to ensure compliance with government standards, including financial reporting and compliance principles. Additionally, it explores strategies for healthcare organizations to optimize reimbursement from government payer systems, such as Medicare and Medicaid, by improving claims management and timeliness. The report emphasizes the importance of understanding the interplay between payer and provider roles and the application of financial principles to prevent fraud and ensure proper revenue cycle management. The analysis also considers the impact of technology, such as the HITECH Act, on healthcare revenue and compliance.

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Running Head: DRAFT OF FEDERAL AND STATE PAYMENT SYSTEMS
Southern New Hampshire University
Title: Final Project Milestone Two: Draft of Federal and State Payment Systems
Name: Arnold Opoku
Course: Healthcare Fin & Reimbursement
Professor: Paul A. VanAssche, JD, MBA/HCM
November 4, 2018

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Federal and State Regulations: The present changes in economic policy
The Congressional Budget Act of 1974, an economic policy that provides regulations and
procedures to the Congress changes yearly.The change is made in entitlement, discretionary
spending, social welfare programs, and the tax code. It is built on discretionary spending,
andfunds are renewed each year (Larrat, Rita & Vogenbeg, 2012).
The Pay as You Go Rule is a law that demands a mandatory increase in spending on
entitlement and social welfare programs such as the Medicare. The policy is offset by a reduction
in spending and increased taxation (Larrat, Rita & Vogenbeg, 2012).
Concern for healthcare leaders.
Healthcare leaders need to be cognizant of regulations set by the judicial branch and
Congress. The changes in economic policy can change the structure of healthcare
organizations,reimbursement of stakeholders, the role of a practitioner and it turns apatient’s
treatment(Larrat, Rita & Vogenbeg, 2012).
The extent in which healthcare providers support patient care activities in accordance to
the aims of the Affordable Care Act will determine the success in avoiding legal and regulatory
dilemmas, which involve reimbursements and standards of clinical practice. Furthermore, the
Affordable Care Act promotes an increase in the oversight of fraud and abuse. The ACAwill
continue tightening the legal, regulatory constraints on health leaders while it exposes
stakeholders outside the system (Teel, 2018).

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Reporting Requirements
The Medicare-Medicaid Plan (MMP) should occasionally submit performance and
monitoring data to various states. Furthermore, it should document any refusals or outreach
attempts. MMP can report a member as unreachable after three outreach attempts. In addition to
that, the three efforts should specifically target completion of the care plan (Centers for Medicare
and Medic-aid Services, 2018).
Appeals and grievances related to benefits which are supplemental should be reported,
grievances are included in the personal care or home health category.MMPs need to haveentire
membershipirrespective of whether the member is enrolled through the opt-in enrollment or a
passive admission. Nevertheless, Medicaid members should not be included, and the MMPs need
to add members registered in the last day of the period of reporting. The 90 day of admission is
equivalent to three calendar months (Centers for Medicare and Medic-aid Services, 2018).
Opportunities and challenges for healthcare leaders.
Regulatory requirements increase the cost of providing services and care. Healthcare
leaders are overwhelmed by the new reporting requirements and changes that regulate Medicaid
and Medicare eligible healthcare providers. Furthermore, healthcare leaders are burdened with
new standards. The provider needs to engage in information sharing and awareness regularly to
update staff and other stakeholders. Healthcare leaders must do compliance training on reporting
requirements, routine audits and address non-conformity issues that arise due to in compliance
with reporting guidelines (Teel, 2018).
Quality and performance reporting system can be effective enough in affecting the level of
reimbursement. The Physician Quality Reporting System (PQRS) is a quality reporting program

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to encourage individual eligible professionals as well as group practices to report the data and
information related to the quality of care to the Medicare. The last program year for PQRS was
2016. Under the quality payment program, PQRS transitioned to the incentive payment system
on the basis of merit. It is basically reporting on the quality and performance of the healthcare
professionals (CMC.gov Centers for Medicare & Medicaid Services, 2018).
However, various challenges might come for the healthcare leaders in meeting the reported
requirement as most of the times it will go over their heads or they might feel it problematic.
Some of the times they might find it difficult to encounter with. But, multiple opportunities are
there behind most of the obstacles as the challenges will be helpful to step back and take a big
picture. It will be helpful in enhancing the population health. Simultaneously, it is effective in
shifting from volume to value-based reimbursement. This will integrate the system and help in
infection control. Reimbursement rate difference is also possible in this way.
Financial principles and compliance standards.
According to the compliance principle, healthcare organizations(HCOs) will adhere to
applicable laws, standards, and regulations. Providers and facilitiesneed to adhere to rules that
govern privacy and confidentiality about patients and treatment they receive. Furthermore,
healthcare organizationsuse billing compliance and coded data in payment of health care
providers and to prevent anoccurrence of fraud. Therefore, activities conducted by a healthcare
organization can be deemed ethical and lawful (UC San Diego, 2018).
Healthcare is a highly regulated industry and non-compliance to health regulation can even end a
healthcare organization in a law suit. Healthcare organizations generally utilize financial

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principles in order to ensure the compliance with the government structure. It follows specific
pay structures that discourage the presence of favoritism between the patients and the doctors. It
can be achieved by fixed incentive paycheques. This smart and effective financial move can be
helpful in preventing the corruption as well as multiple medical malpractice. The Health
Information Technology for Economic and Clinical Health (HITECH) Act is very much helpful
in order to promote the adoption as well as meaningful use of health information technology and
at the same time, it can also be a very good choice to increase the revenue of the healthcare
organization. It was signed into the law on 17th February of 2009, and it effectively addresses the
security as well as the privacy concerns associated with electronic transmission of the health
information of patients. Genuinely, when the security of health information will be ensured it
will increase the productivity which will positively impact the whole revenue cycle of the
healthcare organization as a result. It will be effective in increasing the revenue of the healthcare
organization (HHS.gov Health Information Privacy, n.d).
The availability principle ensures the availability of information promptly, efficient
retrieval and accurate information. The trust of the organization is diminished when data is not
easily retrieved (UC San Diego, 2018)
Financial reporting compliance dictates that healthcare organizations should give
transactions that follow generally accepted accounting principles. Sources of funds and the use of
funds must be combined with the type of activity and by following restrictions regarding the
application. Revenue collected is reported when earned; expenditures recorded when services are
received (Galin, 2018).
Government payer types.

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The role of payer and providers is to ensure that the limited financial resources are being used
appropriately in order to create a good quality of services by the healthcare organizations.
Medicare is administered by CMS and Medicaid is a joint initiative between federal and state
government. Medicare and Medicaid will be the payer primarily.
Healthcare organization should reduce inefficiency in the management of revenue to keep pace
with changes in reimbursement. HCOsshould focus on managing revenues differently, so that
value to patients is appropriately paid regarding accuracy ortimeliness. Furthermore,
organizations should understand how management of claims affects reimbursement so that they
can ensure claims are paid (Murphy, 2018).
Organizations that succeed in reimbursements combine each component of the patient-
provider interaction and ensure it fits into the cycle of revenue. Furthermore, the organizations
address how the interactions can introduce gaps which can lead to risk or a loss (Murphy, 2018).
Improving reimbursements starts with an assessment of the current operating
environment which has three functional areas; technical, operational and financial. The financial
area examines the receivable accounts, collection rates and denial management. The different
side deals with systems applications, and processes. The operational side focuses on staffing,
workflows and vendor relationships. Technology improves claims management and the rates of
reimbursements.

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References.
Centers for Medicare and Medic-aid Services. (2018, July 13). Medicare-Medicaid Plan(MMP)
Reporting Requirements. Retrieved October 31, 2018, from CMS.gov:
https://gov/Medicare-Medicaid-
Coordination/Medicare-and-Medicaid-Coordination/Medicare-MedicaidCoordination-
Office/FinancialAlignmentInitiative/MMPInformationalandGuidance/
MMPReportingRequirements.html.
CMC.gov Centers for Medicare & Medicaid Services. (2018, April 26). Physician Quality Reporting
System. Retrieved from https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/PQRS/index.html

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Galin, D. H. (2018). Evaluating the Information Governance Principles for Healthcare:
Compliance and Availablity. Retrieved October 31, 2018, from HIM Body of
Knowledge: https://www.bok.ahima.org/docoid-107667
HHS.gov Health Information Privacy.(n.d). HITECH Act Enforcement Interim Final Rule. Retrieved
from https://www.hhs.gov/hipaa/for-professionals/special-topics/hitech-act-enforcement-interim-
final-rule/index.html
Larrat, P. R. (2012, April). Impact of Federal and State Legal Trends in Healthcare services.
Pharmacy and Therapeutics, 37(4), 218-220.
Murphy, K. (2018). Key ways to Improve Claims Management and Reimbursement in
Healthcare Revenue Cycle. Retrieved October 31, 2018, from RevCycle Intelligence:
https://revcycleintelligence.com/feature/Key-ways-to-Improve-Claims Mnagement-and-
Reimbursement-in-Healthcare-Rev
Teel, P. (2018, February 13). Five top challenges are affecting healthcare leaders in the future.
Retrieved October 31, 2018, from Hospital Review.:
https://www.beckershospitalreview.com/hospital-management-administration/five-top-
challenges-affecting-healthcare-leaders-in-future.html
UC San Diego. (2018, June 8). Administrative Responsibilities: Principles of Regulatory
Compliance. Retrieved October 31, 2018, from Blink:
https://blink.ucsd.edu/finance/accountability/admin-responsibilities/compliance.html

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