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Finance and Budgeting

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In order to achieve the goal of the full implementation of the GAH and the Community Clinic, there are certain financial and budgetary considerations to be taken care of. These include the construction of the hospital and purchasing of medical equipment and general provision of services. The construction of the facility and the initial equipment and instrumentation will be fully funded by the state. This will be in form of a grant. However, the planning stages for the hospital and the clinic will have to be taken care of by the mission hospital. This should be considered in the budgetary allocation of the mission hospital.

            To provide care, the hospital will take into consideration existing health insurance plans. For those aged 65 years and above, the Federal Medicare Health Insurance will be implemented. Under the Medicare prospective payment system, the hospital gets a reimbursement where Medicare payment is made based on a predetermined fixed amount (CMS). There is a classification system from which the amount paid for a particular service is based (CMS). The hospital creates management patterns that will allow diagnosis and the treatment as efficiently as possible (ASHA). In return, the hospital receives a flat dollar amount in premiums.

            Under this system, the payment amounts cover defined periods. This refers to the amount paid per diem, per stay or 60 day periods (ASHA). The amount is based on classification of each patient. This classification helps the hospitals organize their financial policies so that they receive full reimbursement for the services offered. While making claims, it is easy to classify under the relevant category for reimbursement. This plan will be very critical for the Golden Age Hospital as it begins its operations. The cost of providing health care for the senior citizens will not be a burden for the mission hospital and the goals of the hospital will easily be achieved with this plan. This is given the fact that the construction and initial purchase of equipment will be taken care of by the Federal government and the state government.

            Following this plan, the hospital management will aspire to provide efficient services to the patients. This will result in full reimbursement through the Medicare prospective payment plan.

            In the prospective payment system, the categorization of the various services under which reimbursement is based determines how much amount will be paid to the hospital under Medicare payment. Inpatient acute care is categorized under diagnostic related groups (DRGs). In this classification, there are 535 DRGs. Payment rate is adjusted based on age, sex, secondary diagnosis and major procedures performed (ASHA). The payment is per stay. Additional pay is made only if the length of stay exceeds the norm (ASHA).

            Inpatient rehabilitation hospital or distinct unit fall under case mix groups (CMG). Payment rate per stay is determined by the case mix groups, which are 95. Patient Assessment Instrument determines assignment of the patient. The CMG are based on rehabilitation impairment categories (RIC) which are based on diagnosis, patient’s motor and cognition scores and age (ASHA). Discharge assessment incorporates co morbidities. Comprehensive, expression and swallowing are included in patient assessment instrument.

            The skilled nursing facility falls under resource utilization groups and third version (RUG III). There are 58 groups here. Each beneficiary is assigned per diem payment based on minimum data set (MDS) comprehensive assessment. A specified number of minutes per week are determined for each rehabilitation RUG based on MDS score and rehabilitation team estimates (ASHA).

            Home Health Agency falls under Home Health Resource Groups (HHRG). They are eight in number. The outcome and assessment information set determines HHRG and is completed for each 60-day period. A predetermined base payment for each 60 days episode of care is adjusted according to the inpatient HHRG. There is no limit to the number of 60-day episodes. Payment is adjusted if patients conditions significantly changes (ASHA).

            In the Hospice, each day of care is classified into one of the four levels of care. The per diem rate for each of four levels of care namely, routine, home care, continuous home care, inpatient respite care and general inpatient care is used. Geographic wage adjustments determine the only variation in payment rates within each level (ASHA).

            The reimbursement policy for Medicare insurance program is well set out and therefore the hospital will be able to offer quality services to its patients without fearing loss. The seniors in the community should therefore be sensitized on the need to enroll for insurance and familiarize themselves with the requirements so that they will fully benefit with the establishment of the hospital.

            The fact that the hospital will specialize in geriatric treatment will make it one of its kind. The senior population will receive the best care. There will be clear focus on quality and provision of best medical practices. The hospital will also integrate other services that will cater for the rest of the community. The planners will take into consideration how Medicare treats each service while organizing treatment for any category of patients.

Conclusions and recommendations

            The hospital budgetary and financial policy will be based on provision of proper health care. The best practices in health care will be taken in consideration while formulating the financial policy framework of the hospital. The hospital will therefore include in its policy the consideration guided by the Medicare reimbursement policy so that the facility provides the best care to the patients without surcharging them while still ensuring no losses are incurred. The services offered however will not in any way compromise on the quality of care offered. It will be patient centered.

            It is recommended that a deliberate effort to sensitize the residents of the need to enroll for health insurance should be the first priority of the hospital. Those aged above 65 should be encouraged to enroll. With the Medicare prospective system, the hospital will be able to operate efficiently and sustainably. It is therefore recommended that the construction process go hand in hand with the sensitization campaign for the people to take up health insurance and enroll in Medicare. The senior people should be assisted to do so in order that when operations begin, most of the residents will have enrolled for insurance and will therefore not jeopardize the operations of the hospital when it begins to operate. It is recommended that the hospital employ staff to do the sensitization campaign. Their remuneration and required items for this sensitization process should be catered for in the budgeting process.

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