The way hospitals and other healthcare entities receive payments for the care they provide has been regulated by the government and other agencies for the last few decades. With the inception of Social Security, the government has become a regulatory agent to ensure proper payment and management of healthcare facilities. The government realizes that healthcare facilities exist to provide care to the sick buy they also want to be financially successful at the same time. Finding a way to reimburse hospitals fairly can be a complex issue. The federal government is constantly finding ways to reimburse organizations fairly. Healthcare reimbursements come from three major sources: Medicare/Medicaid, third party providers and individuals who pay for their healthcare needs on their own. Hospital reimbursements are regulated by the Federal government as well as insurance companies. Strict guidelines have been put in place to monitor the reimbursement process. Since the beginning of Social Security, several legislative acts help to provide a system of checks and balances for hospital and physician reimbursement.
Medicare was established as part of the Social Security Act of 1965. This federally funded program provides health care insurance to people over the age of 65. There are two main components to Medicare. Part A covers basic hospital services, home health care and any outpatient services an individual receives. Part B of Medicare covers doctor’s visits and any other medically necessary supplies a patient may need. Since Medicare is federally funded, the government has the authority to regulate fee schedules for healthcare facilities. Fee schedules are used to keep the Medicare program solvent. Because of the unanticipated growth of Social Security and Medicare, the fee schedules also help to maintain the program for a long period of time.
The purpose of reimbursements is to help hospitals and physicians realize a profit. Part A of Medicare reimburses for...