Health

Ramifications of Participation Contracts

Traci Cruz

February 2, 2012

HCR 230- Lisa Johnson

It seems the only way a physician would get a financial advantage is by contracting with an insurance carrier, and if the insurance carrier did not require him or her to do write offs or pay of his or her bills at 100 percent. The contract benefits plan seems to have lower co-pays for their member’s, and they contract write offs on their bills. This contract benefits the doctor especially if the plan’s members choose to use him or her as their physician.

There seems to be four basic ways that fees are collected for service in the healthcare industry:

1. Fee for service,

2. Discount fee for service,

3. Capitation, and

4. Salary.

Fee for service is when the physicians are paid for every single service and/or test they have conducted based on the fees by what other physicians charge in their local area. There seems to also be the Discount fee for service, is when the physicians are paid for every test or service’s that were provided based on a fee schedule or pre-set discount off the usual price of what other doctor’s charge in their local area. Capitation is also another way for the doctor to get paid per enrollee, not per service, and salary is when the doctors are paid on either a weekly or monthly basis, but this is not based on services or enrollees.

References:

Valerius, J., Bayes, N., Newby, C., & Seggern, J. (2008). Chapter 9, Pg. 285-331. Medical Insurance: An integrated claims process approach (3rd edition). Boston: McGraw Hill.