The resource includes the following payer types:
Medicare Fee-For-Service1
Medicare is the federal health insurance program for:
- People who are 65 or older
- Certain younger people with disabilities
- People with End-Stage Renal Disease (ESRD)
The different parts of Medicare cover specific services:
- Medicare Part A (Hospital Insurance): Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
- Medicare Part B (Medical Insurance): Part B covers certain doctors' services, outpatient care, medical supplies, and preventive services.
- Medicare Part D (prescription drug coverage): Helps cover the cost of prescription drugs (including many recommended shots or vaccines).
Medicare Advantage2
Medicare Advantage (also known as “Part C”) is a type of Medicare health plan offered by a private company that contracts with Medicare. These plans include Part A, Part B, and usually Part D. Plans may offer some extra benefits that Original Medicare (Fee-For-Service) doesn’t cover.
Medicare generally pays providers under a prospective payment system (PPS), a method of reimbursement in which Medicare payment is made based on a predetermined, fixed amount. The payment amount for a particular service is derived from the classification system of that service (for example, diagnosis-related groups for inpatient hospital services). CMS uses separate PPSs for reimbursement to acute inpatient hospitals, home health agencies, hospice, hospital outpatient, inpatient psychiatric facilities, inpatient rehabilitation facilities, long-term care hospitals, and skilled nursing facilities.
Private Payer/Commercial3
Private (Commercial) payers can negotiate individual reimbursement methods with each provider. Reimbursement amounts can thereby vary depending on market conditions, such as the bargaining power of individual providers relative to insurers in a community. Many private payers have been using the fee-for-service method, in which each service and drug is reimbursed separately with CPT codes via medical benefit. Some payers may contract to cover CAR T cell therapy under a case rate. This tool allows the user to specify the method of payment and terms under each methodology. The default payment method for private payers in this tool is a Medicare payment ratio of 189% in the inpatient setting and 264% in the outpatient setting.