BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare


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Capella university

BHA-FPX4009 Health Care Reimbursement Systems

Prof. Name



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

Traditional reimbursement methods in the medical field encompass Fee-for-Service (FFS), Episode-Based Payment (EBP), and the Capitation model, alongside contemporary trends influencing healthcare service costs. There is a significant shift in healthcare towards value-based payment systems from the conventional volume-driven payment approaches. This memorandum aims to provide insights into traditional and evolving reimbursement methodologies.

Traditional Payment Methods

The predominant reimbursement mechanisms include Fee-for-Service (FFS), where healthcare providers are remunerated based on the quantity of services delivered, disregarding treatment outcomes. FFS relies on fee schedules and procedural codes for payment regulation, often leading to increased utilization and subsequently escalating costs. Capitation involves prearranged payments to providers per patient, irrespective of service frequency, aiming to control unnecessary expenses and service provisions. Episode-Based Payment (EBP) consolidates payments for a complete episode of care, streamlining reimbursements and promoting care coordination (Casto, 2019; Miller & Mosley, 2016).

Current Trends in Health Care Payment

Previously, healthcare primarily emphasized volume-driven reimbursements, incentivizing service quantity over quality. However, this approach leads to inflated costs without commensurate improvements in patient outcomes. Transitioning from volume-based to value-based payment models aligns incentives with patient health outcomes, encouraging efficient resource utilization and enhancing overall care quality (Casto, 2019; Miller, 2009; Orszag, 2016).

Comparison of Models

Fee-for-Service models entail patients paying predetermined fees for services rendered, irrespective of care quality, potentially leading to unnecessary utilization and inflated costs. Conversely, Capitation models allocate fixed payments per patient, encouraging cost containment but potentially reducing service accessibility. Episode-Based Payment systems offer a 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. Addressing inaccuracies in patient records and enhancing clinical practices can improve 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.

BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

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.

BHA FPX 4009 Assessment 1 Reimbursement Models in Healthcare

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

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