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Financing Ambulatory Outpatient CareSelect:
Medicare Medicare does have some special programs that fund outpatient care, eg, The Program for the All-inclusive Care of the Elderly (PACE). They typically serve specific populations, eg, the elderly and are limited in number.
Medicaid Commercial Insurers Managed Care
Full capitation In full capitation, the managed care company gives the health care provider a set amount of money (capitation) per member per month. The health care provider must then pay for all of the health care our of the total amount. In other words, the health care provider takes the risk if the cost of health care exceeds the amount paid. Alternatively, the health care provider gets to keep the balance if the costs are less than the amount paid. Capitation can be full-risk, or only partial. For example, in a full-risk capitation plan, all of the health care costs, including hospitalization, operations, diagnostic tests are included in the contract. Alternatively, partial risk capitation may relate only to the ambulatory outpatient portion of health care. Fee-for-service Much of managed care is still conducted on a fee-for-service basis. However, the fee paid is usually deeply discounted over usual and customary fees. The rationale is that in exchange for a reliable panel of patients, a physician will be willing to accept much less money per visit. The threat is that if the physician doesn't like the proposed fee structure, the plan will contract with another physician and take the business elsewhere. Most managed care fee-for-service plans include a utilization review process. Colloquially called "mother-may-I" by physicians, this means that the physician must ask permission from a central review person for things like chest x-rays and referrals to specialists. Carve-outs For some specialty services, eg. Bone marrow transplant, a managed care company may establish a special contract with a provider for that service. It may include not only the physician's fees, but all the costs associated with providing that service to a patient. Global budgets
Some managed care companies own and manage all of the components of health care. Kaiser would be an example where they own the hospitals, the clinics, the diagnostic facilities, etc. In these cases, there is a global budget to cover all services. However, they use fee-for-service and capitation mechanisms as budget management tools to manage productivity and costs within the global budget.
Government (Veterans Affairs, Active Duty Military) Next, consider the financing of home care. CAPC Resources:
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