Question

1. Review managed care contracts for different payment plans (PPO, HMO, Fee for services, etc.) and describe provider incentives and risks under each of the following reimbursement methods:
   1. Cost-based
   2. Charge-base (including discounted charges)
   3. Per procedure
   4. Per diagnoses
   5. Per diem
   6. Global pricing
   7. Capitation

Answer 1

Answer- Cost based- in this the reimbursement is asked based on the cost of a particular service similar to current market rate. Risk is of the lowering and increase in price.

Charge based- in this charge of the provider is fixed.it faces the risk of lower than market rate charges.

Per procedure- The service needed are charged on separate rate. It may be costly

Per diagnosis- in each condition the charges are different. It may be costly

Per diem- daily wages charges are charged by service provider. The gap between the days will not be paid.

Global pricing- a universal rate of service is fixed. Risk factor is different price range in different locations, it may be so high in a local area.

Capitation- it is based in the number of the patient or the needy of the service.