Billing Vs Reimbursement

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When politicians and policy makers talk about cost reduction and they are typically referring to how much the government or insurers pay to providers, and not to the costs incurred by providers to deliver health care services. Cutting payer reimbursement does reduce the bill paid by insurers and lowers providers’ revenues, but it does nothing to reduce the actual costs of delivering care.
On the other hand, providers often allocate their costs to procedures, departments, and services based not on the actual resources used to deliver care but on how much they are reimbursed. While reimbursement itself is based on arbitrary and inaccurate assumptions about the intensity of care. This cycle of billing and reimbursement based on assumption is