Healthcare Industry Overview


Read the scenario that you will use for the Individual Projects in each week of the course. The Centers for Medicare and Medicaid Services (CMS) has taken on a more visible role in health care delivery. Many changes have transpired to improve patient safety along with the implementation of additional quality metrics, and these changes impact reimbursement rates.

Likewise, the Patient Protection and Affordable Care Act has changed the reimbursement fee structure of Medicare and Medicaid reimbursement for health care services.  Other legislation including the HITECH Act and the Medicare Authorization and CHIP Reactivation Act of 2015 (MACRA) all impact how healthcare organizations receive reimbursement and demonstrate use of data to improve quality and delivery of patient care.

Mr. Magone, CEO of Healing Hands Hospital, has asked you to join the “Future of Healing Hands” Task Force, and your first assignment is to work with the Hospital Chief Financial Officer, Mr. Johnson, and provide a summary of the current regulations regarding Medicare reimbursement including how MACRA will impact reimbursement if/when Healing Hands coordinates delivery of services by affiliating with physician practices.  
For this assignment, write a 2-3 page report that you will deliver to Mr. Magone on how the new CMS initiatives and regulations will impact the organization’s revenue structure. In your presentation, address the following questions:

Why did CMS become more involved in the reimbursement component of health care? How does CMS’s involvement impact the reimbursement model for Healing Hands Hospital and other health care organizations?  If CMS reimbursement regulations for Medicare and Medicaid change, does it follow that other insurance providers change their policies on reimbursement?
What tools can be implemented to ensure organizations such as Healing Hands Hospital and physician practices are meeting the policies and procedures set forth by CMS?
Identify 3 tools from the CMS Web site that are helpful in meeting the requirements for Medicare reimbursement set forth by CMS. 

Sample paper

Healthcare Industry Overview

The Centers for Medicare & Medicaid Services (CMS) became more involved in the reimbursement component of healthcare as part of an effort to transform the way health care is delivered and the way in which it is paid for by those insured. The aims of CMS were threefold: to provide better care for patients, provision of better health opportunities, and ensuring lower cost for healthcare services. CMS’s involvement has significant impacts on the reimbursement model for Healing Hands Hospital and other health care organizations. Currently, CMS pays providers by relying on a value-based program that emphasizes on quality, rather than the traditional approach that emphasized on quantity of care (CMS, n.d). Reimbursements under the traditional approach depended on the number of services that a health care facility provided.

In the current approach, there are four value-based programs considered. These include Hospital Value-Based Purchasing Program (HVBP), Value Modifier Program, Hospital Readmission Reduction Program, and Hospital Acquired Conditions (HAC) Programs (CMS, n.d). These value-based programs affect the reimbursement model for Healing Hands Hospital. For instance, the higher the HACs the lower the payment received. Similarly, when Healing Hands Hospital records excessive readmissions, Medicare lowers the share of payments the hospital should receive.  The HVBP adjusts payments based on the quality of care delivered and includes measures to assess resource utilization by the hospital. The higher the efficiency in resource utilization the higher the payment received.

If CMS reimbursement regulations for Medicare and Medicaid change, then it would mean that other insurance providers would have to change their policies on reimbursement in order to conform to CMS reimbursement regulations. The policy framework provided by CMS guides insurance providers. As such, any changes in the regulations would lead to insurance providers changing their policies too (Larrat, Marcoux, & Vogenberg, 2012). This is informed by the fact that CMS works closely with state governments to ensure there is compliance with health insurance accountability and consumer protections outlined by the federal law (CMS, n.d). As such, CMS has some level of control over other insurers.

Healing Hands Hospital can implement a number of tools to ensure it is meeting the policies and procedures set by CMS. The first tool is discharge planning, which involves planning on whether the patient needs transition through the different levels of care. This ensures the patient is included for reimbursement purposes. Another important tool is regular audits to ensure that the hospital is meeting requirements set by CMS. The hospital should implement a non-discriminatory policy to ensure patients receive proper medical services. Another measure is compliance to ambulatory care guidelines outlined by the National Quality Forum.

The CMS website lists a number of tools that are helpful in meeting the requirements for Medicare reimbursement. One of them is Quality Assurance and Performance Improvement (QAPI) program (CMS, n.d). This program aims at assisting transplant surveyors to complete an organ transplant program. The program enables nurses to deliver quality services to their patients. The second tool is the inpatient prospective payment system (IPPS). This system provides a mode of payment for costs relating to acute care and hospital inpatient stays. The system follows future set rates. It classifies patients into diagnosis-related groups with specific payment weights assigned on each group (CMS, n.d). The last tool is the Medicare Access & Chip Reauthorization Act of 2015, whose main role is to ensure compliance in the delivery of health care.


Centers for Medicare & Medicaid Services (CMS). (n.d). The center for consumer information &             insurance oversight.           Insurance-Market-Reforms/compliance.html

Larrat, E. P., Marcoux, R. M., & Vogenberg, F. R. (2012). Impact of Federal and State Legal       Trends On Health Care Services. Pharmacy and Therapeutics37(4), 218–226.


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