In general, a reimbursement is a repayment for the money you've already spent. When you travel for work, you get a reimbursement for your work-related expenses, like hotel bills and plane tickets, but you'll have to pay for that trip to the circus yourself. I assume many of us are familiar with getting reimbursed for expenses. But In healthcare the concept of reimbursement or as we say provider reimbursement is little different. In case of healthcare services, we do not directly pay out of our pocket. Health care providers are paid by insurance or government agency through a reimbursement system. Healthcare providers/caregivers provide medical services to a patient and then request reimbursement of these services from the insurance company or the government agency.
Methods of Provider Reimbursement
There are two common methods of reimbursing physicians: Fee-for- service (FFS) and capitation. There are also two major code categories in use by most primary care physicians: ICD-9-CM codes and CPT-4 & HCPCS codes.
- ICD-9-CM codes (soon to be replaced by ICD-10-CM codes) are assigned to each possible diagnosis (e.g., diabetes, hypertension, etc.) and symptom (e.g., pain, swelling, etc.).
- CPT-4 & HCPCS codes are assigned to each procedure (e.g., office visit, venipuncture, surgeries, etc.).