Discussion week 4

Please review the discussion board rubric under “Start Here”.

 Use in-text citations appropriately and provide full citations for your initial post and at least one of your response posts.  One of your citations needs to be outside of your text.  

The idea is that you would not only comment on your classmate’s post but also do some additional research furthering the discussion.

To begin discussing in this forum, click the forum title, “Week 4 Discussion Forum”. Then, click Create Thread on the Action Bar to post your initial reply. To reply to a fellow participant, click the title of the initial post, then click Reply.

Kristin Cook

Week 4 Payment Methodologies


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1) Fee For Service is where the payer has a fee schedule with a set reimbursement amount for each service covered. Cost Based is for facilities that receive payments throughout the year until the cost report comes out. Then the payments that have been received are deducted from the remaining amount. Prospective Payment inpatient hospital reimbursement was based on the DRG data that already appeared on the claim. Ambulatory Surgical Centers are based on only procedures that are performed. Skilled Nursing Facilities payment based on the acuity or illness of the patient has been used.

2) Medical necessity is where you have a procedure done for a diagnosis and when it is sent to claims it can either be approved or denied. If it is denied that means that the insurance company doesn’t believe the procedure or tests run for that diagnosis was necessary. This impacts payment a great deal because if a patient has insurance, but the insurance company will not pay for the procedure or test that were done that means that the patient has to pay out of pocket. This can be very difficult for patients that live on a fixed income.

3) Payment methods now have changed coding for the better. Everything that we do now as a society is done electronically now, this means that every claim that is filed it is done electronically. Everything can be filed and stored electronically and still meet HIPAA’s requirements for patient privacy and safety.


Aalseth, P. (2015). Medical Coding: What It Is and How It Works. Second Edition. Boston, MA. Jones & Bartlett Learning.

Chenelle Weaver

Week 4 Discussion (Initial post)


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  1. Refer to Chapter 4, focus on pages 179 – 188 and discuss payment systems. Demonstrate understanding of fee for service, cost based, and prospective payment systems. Fee for service is a designated reimbursement amount for service rendered. Cost based details the cost of running a business and receiving payments. A Prospective Payment System (PPS) is a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount. The payment amount for a particular service is derived based on the classification system of that service. CMS uses separate PPSs for reimbursement to acute inpatient hospitals, home health agencies, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, and skilled nursing facilities. Explain medical necessity and how it impacts payment. Medical necessity refers to a decision by your health plan that your treatment, test, or procedure is necessary for your health or to treat a diagnosed medical problem. Most health plans will not pay for healthcare services that are not considered medically necessary. A common example of a non-medically necessary procedure is a Botox. If the procedure is considered to not be necessary the claim may be denied thus affecting payment. What is the effect of payment methods on coding? Use of the correct codes ensures the correct payment method will be used. 


www.medicalbillingandcodingonline.com/medical-coding-for-billers retrieved on June 29, 2017