Sources of Health Care Revenue

Sources of Health Care Revenue

There are four primary sources of healthcare revenue. Government aid is provided through grants and subsidies. The industry also gets revenue through government-sponsored programs like Medicare and Medicaid. American citizens provide the funds indirectly through taxes in addition to the government borrowing to finance the budget. The Medicaid program provides low-cost or free benefits to low-income adults, pregnant women, children as well as seniors and persons with disabilities. In addition, each state determines if persons applying for this program are eligible or not. The Medicare, on the other hand, is a program for persons over the age of 65 years, those under 65 but with certain disabilities and at any age with renal disease (Cleverley et al., 2010).

Premiums paid by private insurance companies to healthcare providers come from the policyholders and form a major source of revenue. The fee-for-service is a system of insurance where the care providers receive a fee for each specific service rendered. This type is inflationary as it raises the costs of health care. Another type of private insurance is the managed care organizations that have contracts with health care providers and other health facilities to offer care for their members at a discounted cost. The providers ordinarily make up the network of the plan. Depending on the rules of the network, the plan pays different amounts for the care provided (Wendt et al., 2009).

The consumer-directed health plan is perhaps one of the most flexible insurance that essentially gives one control over their healthcare savings. The plan is a healthcare savings account where the consumer is allowed to make decisions based on the factors that are important to him or her. The consumer is able to make choices on what hospitals and doctors to use as well as working with the doctor to decide the appropriate medications right for them (Cleverley et al., 2010). The liability insurance, on the other hand, protects individuals or businesses from the risk of being sued and held liable for malpractice, negligence, and injury. This is especially important to medical practitioners.

Another source of revenue is from out of pocket direct payments. This method raises the majority of the insurance revenue. This occurs when patients cover the cost of medical services without the help of any third party. Finally, medical facilities receive donations from private citizens and corporations because they believe that the services provided by the facility are seeking a tax deduction for their contribution (Wendt et al., 2009).

Billing Fraud

Billing is one of the many ways that care providers defraud the patients and health care industry. The activity achieved by presenting fraudulent claims for items that were not provided, making inaccurate records, faking frequency, and description of items and services, billing at high levels and falsifying eligibility, the providers defraud the insurance providers and consumers of their services. The consequence of such practice is detrimental to the industry because it results in higher costs for healthcare as well as increased costs for coverage (Li et al., 2008).

Reporting Medicare and Medicaid Fraud

It is necessary that before one reports fraud they check to ensure they have the provider’s name and information on the service in question. They should also have the date of service delivery, the amount agreed and remitted by Medicare or Medicaid, and the date of Medicaid summary notice. The personal name and Medicaid number in addition to the reasons why one feels Medicare should not have paid the approved amount is also important information to have before reporting fraud (Centers for Medicare & Medicaid Services, 2007).  Once they have the information they can contact the relevant centers either online or through physical mail.

Sources of Health Care Revenue


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