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Find Medicaid reimbursement confusing? This will help

Medicare and Medicaid can be confusing to both patients and providers, but Ben Mandelbaum, COO of Senior Planning Services, lays out the basics in his article in McKnight’s Long Term Care News. Mandelbaum goes over not only what the different reimbursement systems involve, but also who benefits from each and how payments are calculated. Here is an excerpt on which participants prefer the fee-for-service model:

Since the Fee-for-Service model reimburses hospital invoices or doctor bills for itemized charges, it gives an incentive for healthcare providers to administer sometimes unnecessary treatments, because payment is dependent on the quantity rather than quality of the care.


There are some benefits to the patient as they are not tied down to a limited amount of care: Their overall care is not managed by a healthcare coordinator as in the managed care model. Insurance companies shield themselves against these practices by setting limits for every Medicaid beneficiary. The individual states are evidently not particularly fond of this system, as it often costs more and the entire healthcare burden is on their shoulder.

Later in the article, Mandelbaum lays out who benefits from the managed care model:

Generally states are happy with this model for two reasons. One – they now pay the health plan a “capitated” fee — a flat fee — which can significantly bring down the cost. Two – this transfers the financial risk away from the state to the health plan, as well as the responsibility to deal with the healthcare providers.

The whole article, available on McKnight’s, is well worth a read. As Mandelbaum writes,

Understanding the Medicaid system, where the money comes from and how it benefits each individual can be complex. Many doctors choose not to work with Medicaid due to the difficulty of dealing with that reimbursement. Thankfully, however, many doctors are willing to put in the effort for the sake of the patients who need it.

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