BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

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BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

Student Name

Capella University

BHA-FPX4009 Health Care Reimbursement Systems

Prof. Name



To: Alex Ridge, Director of Patient Services
From: [Your Name]
Date: July 31, 2022
Subject: Reimbursement Models in Healthcare (BHA-FPX4009 – Assessment 1)

Traditional reimbursement paradigms in healthcare encompass Fee-for-Service (FFS), Episode-Based Payment (EBP), and the Capitation model, alongside contemporary trends shaping healthcare service costs. There is a notable transition in healthcare towards value-based reimbursement systems from the traditional volume-centric payment approaches. This memorandum aims to furnish insights into conventional and evolving reimbursement methodologies.

Traditional Payment Approaches

The prevailing reimbursement mechanisms entail Fee-for-Service (FFS), wherein healthcare providers receive compensation based on the volume of services provided, irrespective of treatment outcomes. FFS relies on fee schedules and procedural codes for payment regulation, often resulting in heightened utilization and consequent cost escalations. Capitation involves predetermined payments to providers per patient, regardless of service frequency, with the aim of controlling unnecessary expenses and service provisions. Episode-Based Payment (EBP) consolidates payments for a full episode of care, streamlining reimbursements and fostering care coordination (Casto, 2019; Miller & Mosley, 2016).

Contemporary Trends in Healthcare Payment

Previously, healthcare predominantly focused on volume-driven reimbursements, incentivizing service quantity over quality. However, this approach leads to inflated costs without proportionate enhancements in patient outcomes. Shifting from volume-based to value-based payment models aligns incentives with patient health outcomes, fostering efficient resource allocation and improving overall care quality (Casto, 2019; Miller, 2009; Orszag, 2016).

Comparative Analysis of Models

Fee-for-Service models entail patients paying predetermined fees for services rendered, irrespective of care quality, potentially resulting in unnecessary utilization and inflated costs. Conversely, Capitation models allocate fixed payments per patient, encouraging cost containment but potentially diminishing service accessibility. Episode-Based Payment systems offer comprehensive payment for all services within a care episode, promoting care efficiency and quality outcomes (Casto, 2019; Miller, 2009; Orszag, 2016).

Quality Concerns

Value-based care prioritizes patient outcomes and care quality, aiming to optimize healthcare expenditure. Rectifying inaccuracies in patient records and refining clinical practices can enhance reimbursement processes and patient care quality. Staff training on stroke prevention and documentation standards is imperative for ensuring optimal patient care and reimbursement accuracy (Casto, 2019; Miller, 2009; Orszag, 2016; Squitieri et al., 2017).


Healthcare reimbursement methodologies are evolving towards value-based models to enhance patient outcomes and cost-effectiveness. By transitioning from volume-based to value-based care, healthcare systems prioritize quality over quantity, benefiting both patients and providers. Providers must adapt to these evolving payment structures to optimize patient care quality and financial sustainability.


Casto, A. B. (2019). Principles of healthcare reimbursement (6th ed.). AHIMA Press.

Bundled Payments for Care Improvement (BPCI) initiative: General information. (n.d.).

Miller, H. D. (2009). From volume to value: Better ways to pay for health care. Health Affairs, 28(5), 1418–1428.

Miller, P., & Mosley, K. (2016). Physician reimbursement: From fee-for-service to MACRA, MIPS, and APMs. The Journal of Medical Practice Management, 31(5), 266–269.

Orszag, P. R. (2016). US health care reform: Cost containment and improvement in quality. JAMA, 316(5), 493–495.

Squitieri, Lee, MD, MS, Bozic, Kevin J., MD, MBA, & Pusic, Andrea L., MD, MHS. (2017). The role of patient-reported outcome measures in value-based payment reform. Value in Health, 20(6), 834-836. doi:10.1016/j.jval.2017.02.003

BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

Vila Health: Investigating a Readmission. (n.d.).

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