What is healthcare reimbursement?
Healthcare reimbursement describes the payment received by a healthcare provider, hospital, diagnostic facility, or another healthcare facility for providing a medical service. Fee-for-service (FFS) is the most common reimbursement method.
In many cases, a health insurer or government payor covers some or all of a patient's healthcare costs. A patient is typically responsible for covering a portion of the cost as well. Patients without health insurance must reimburse the healthcare provider or facility for the total cost of their care.
Payment for these services typically occurs after receiving them. The provider will send a bill to the party responsible for covering the medical costs, such as the insurance company or patient.
The amount billed is based on the service and agreed-upon amount paid by the health insurance company or Medicare. For those with Medicare, looking up a procedure by its common procedural technology (CPT) code provides insight into how much of the procedure is covered by Medicare.
Different sources of reimbursement include:
- Balance billing
Why is healthcare reimbursement necessary?
Healthcare reimbursement is essential because it ensures providers are paid for the services they provide, allowing them to continue offering healthcare services.
An important part of healthcare reimbursement for patients is choosing an insurance plan that covers a fair amount of healthcare costs, lowering the amount of healthcare reimbursement patients are expected to pay.