Final answer:
CMS uses a capitation reimbursement methodology for contracting with Medicare Advantage Payers under Medicare Part C. This approach provides a set amount of payment to providers per enrollee over a certain period, encouraging efficient care. It differs from other methodologies like percent of billed charges, bundled payment, or per diem, and aligns with efforts to control healthcare costs under the ACA.
Step-by-step explanation:
For Medicare Advantage Payers under Medicare Part C, the Centers for Medicare & Medicaid Services (CMS) primarily use a capitation reimbursement methodology. Unlike a fee-for-service system where medical care providers are paid based on the services they provide, capitation means that providers are paid a set amount for each enrolled person assigned to them, per period of time, whether or not that person seeks care. This method is designed to encourage efficient care management by incentivizing health care providers to offer only necessary services, as they receive a fixed payment regardless of how many services a patient uses.
Medicare Part C, also known as Medicare Advantage, is an alternative to Original Medicare (Part A and B) and is offered through private insurance companies approved by Medicare. The Medicare Advantage programs are funded through the Hospital Insurance and Supplementary Medical Insurance trust funds, and they provide all Part A and Part B services while often including additional benefits.
Capitation models contrast with other reimbursement methodologies like percent of billed charges, bundled payment methods, and per diem reimbursements. Capitation helps to mitigate issues related to the fee-for-service model, which can lead to increased healthcare costs and inefficiency. Furthermore, under the Affordable Care Act (ACA), regulations such as spending caps on administrative costs and the introduction of electronic medical records (EMRs) are intended to further control healthcare spending.