Which of the following is NOT true regarding retrospective reimbursement? A)In a
ID: 239659 • Letter: W
Question
Which of the following is NOT true regarding retrospective reimbursement?
A)In a retrospective or cost-plus reimbursement system, providers have an incentive to provide services indiscriminately, thus increasing costs; health care institutions could increase their profits by increasing costs.
B)None of the other options are true. All of the other options are true of retrospective reimbursement.
C)With retrospective reimbursement, providers were paid a per diem reimbursement rate based on actual costs incurred the year before.
D)Because of the perverse financial incentives inherent in prospective reimbursement, retrospective reimbursement has replaced prospective reimbursement as the current standard for nearly all federal health programs.
A)In a retrospective or cost-plus reimbursement system, providers have an incentive to provide services indiscriminately, thus increasing costs; health care institutions could increase their profits by increasing costs.
B)None of the other options are true. All of the other options are true of retrospective reimbursement.
C)With retrospective reimbursement, providers were paid a per diem reimbursement rate based on actual costs incurred the year before.
D)Because of the perverse financial incentives inherent in prospective reimbursement, retrospective reimbursement has replaced prospective reimbursement as the current standard for nearly all federal health programs.
Explanation / Answer
Answer D
Because of the perverse financial incentives inherent in prospective reimbursement, retrospective reimbursement has replaced prospective reimbursement as the current standard for nearly all federal health programs.
This statement is not true. The federal health programs the retrospective reimbursement plans have been replaced by the prospective reimbursement plans. Thus it can effectively control the cost of healthcare. Retrospective reimbursement is based on actual costs incurred by a provider during the previous year. In it, certain profits can be increased by the hospital.
Retrospective reimbursement plans or Cost-Plus Reimbursement
It is a bundled payment plan and acts as fee-for-service plan. The healthcare provider receives the payment after the healthcare is provided. An itemized bill is provided to the payment agency and it is paid to the provider.
Characteristics :
Per diem rates for patient stay at the hospital
The provider submits the cost report after the provision of care to the third party like insurance agency or government
Daily reimbursement rates
Cost of each service is included
Capital cost is also concerned
Advantages:
Easy to understand
Commonly used in hospital
Disadvantages:
May increase the healthcare cost
Purposeful wastage of resources to increase profit
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