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Healthcare Bootcamp Module 302 – How Providers Get Paid

Video Highlights
Title slide for Course 300: Leading Health System Economics, Video 302: How Providers Get Paid from The Health Management Academy, featuring the organization’s logo and abstract background design.
0:00
Intro & Why Provider Payment Matters
Slide titled Most Revenue Starts With Patient Care—and Fee-for-Service Still Dominates. A chart shows that 82% of total leading health system revenue comes from patient care reimbursement. Three common payment models are outlined: Fee-for-Service (FFS) (90% of payments, rewards volume per service), Value-Based Care (VBC) (based on patient outcomes, quality, and efficiency), and Bundled Payments/Capitation (single lump sum for coordinated care, rewards cost control and fewer complications). A sidebar highlights how industry partners should align with each model: FFS (focus on volume growth), VBC (show quality and outcomes), and Capitation (emphasize cost reduction and complication prevention).
0:50
Payment Models & Incentives
Slide titled Most Revenue Starts With Patient Care—and Fee-for-Service Still Dominates. A circle chart shows 82% of total leading health system revenue comes from patient care reimbursement. Three common payment models are explained: Fee-for-Service (FFS) (paid per individual service such as visits or scans, rewards volume, and represents 90% of payments), Value-Based Care (VBC) (paid based on patient outcomes, quality, and efficiency; better results mean bonuses, poor outcomes mean penalties), and Bundled Payments/Capitation (paid a lump sum per patient or condition, rewards cost control and coordinated care, lowers costs and complications, results in higher margins). A sidebar labeled Industry Partners: Align Your Pitch notes where vendors should focus—volume growth and revenue lift for FFS, quality and measurable outcomes for VBC, and cost reduction and complication prevention for Capitation.
2:00
Key Factors Shaping Reimbursement (Complexity, Site, Payer)
Slide titled The Revenue Cycle: How Systems Turn Care Into Dollars with three stages and associated risks. Front End (Preparing for patient care): tasks include verifying identity and insurance, confirming copays/deductibles, and preauthorization. Revenue risk: missing patient info or pre-auth → claim rejections or delays. Mid-Cycle (Documenting care): translating into billable codes for diagnosis (ICD-10), services (CPT, HCPCS, DRG), and site modifiers (POS). Revenue risk: undercoding or vague documentation → lower reimbursement or audit risk. Back End (Ensuring accurate, timely payment): tasks include submitting claims with accurate data, monitoring payer responses, reconciling payments, and following up on unpaid balances. Revenue risk: inaccurate claims or late follow-up → denials and payment delays.
3:30
The Revenue Cycle: From Patient Care to Payment
Slide titled How Policy Shapes Provider Payments with subtitle It’s Not Just Math, There’s Policy Too. Left side lists who sets payment policy: MedPAC (advises Congress on Medicare payment policies), CMS (implements Medicare & Medicaid rules), CMMI (tests new models), and Congress (sets vision, budget, and law). Right side shows chart of 2025 Medicare payment rate updates compared to cost growth. Outpatient rate +2.9%, inpatient rate +2.8%, physician fee schedule +2.8% vs. hospital expense growth +7.4%, labor expense growth +2.5%, and healthcare inflation +5.5%. Bottom note: Provider payment is shaped by policy decisions, budget tradeoffs, and evolving payment rules.
5:00
Policy’s Role: CMS, MedPAC, CMMI
Slide titled Four Things to Know About Commercial Reimbursement. Circular diagram with four segments: 1. Every Contract is Unique – rates negotiated one-on-one with commercial payers, influenced by market strength, provider network, and quality outcomes. 2. Medicare Sets the Pace – commercial payers often mirror CMS changes in rates and payment models. 3. Commercial Pays More—Sometimes Much More – commercial rates are typically 50–60% higher than Medicare, sometimes 200–300% more. 4. Many Kinds of Payers – from provider-owned plans to national insurers, payer mix shapes reimbursement strategies.
6:30
Commercial Reimbursement
Slide titled Key Takeaways highlighting four insights on provider payments. 1. Patient care drives revenue – and fee-for-service (FFS) still dominates, shaping health system priorities. 2. Three factors set reimbursement: site, payer, and complexity, with major variation across these levers. 3. A strong revenue cycle is essential to financial health, requiring accurate coding, clean claims, and timely follow-up. 4. Policy pressures are real, as rate increases lag behind cost growth, forcing leaders to find solutions that protect margins through efficiency, productivity, or cost control.
7:30
Key Lessons & Takeaways
Related Topics:
Payer StrategyFinance and OperationsHealth Policy and Advocacy
Relevant Roles:
Industry Partners

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Table of Contents
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What You Will Learn Key Lessons Your Bootcamp Toolkit Explore the Full Series

What You Will Learn

In this video, we cover:  

  • Common payment models providers use, and how they shape care incentives 

  • The primary factors determining provider reimbursement levels 

  • How the revenue cycle converts patient care into provider payment  

  • Ways government agencies like CMS influence payment policies 

  • Important distinctions between commercial and government reimbursement 

Key Lessons

  • Patient care drives revenue: Fee-for-service remains dominant, emphasizing the direct link between patient care volume and financial outcomes.  

  • Three factors shape reimbursement: Complexity of care, site of care, and payer mix determine how much providers get paid.  

  • Revenue cycle unfolds in three critical stages: Front-end, mid-cycle, and back-end – each significantly impacting financial outcomes. 

  • Provider payment can shift annually: Policy changes from agencies like CMS, MedPAC, and CMMI can regularly impact provider reimbursement.  

Your Bootcamp Toolkit: Keep the Momentum Going

Turn Bootcamp 302 insights into action with this cheat sheet. Use it to revisit key takeaways, fuel team discussion, and sharpen your pitch.

Bootcamp 302 Cheat Sheet​

 Explore the Full Series

Graphic for Healthcare Bootcamp Module 300 Series: LHS Economics | Executive Summary featuring icons for gaining insights, staying updated, and finding solutions.

Healthcare Bootcamp 300 Series - Leading Health System Economics | Executive Summary  

Gain insight into how health system margins operate - including the key drivers of revenue and costs - and how industry partners can leverage these insights for effective collaboration.

A graphic titled Industry Insights: Healthcare Bootcamp Module 300 Series with the subtitle Overview of Leading Health System Budgets. The design features a circular photo of a stethoscope on top of financial documents, alongside three icons labeled Revenue, Policy, and Workforce.

Healthcare Bootcamp Module 301 – Overview of Leading Health System Budgets

Gain insight into how health system margins operate - including the key drivers of revenue and costs - and how industry partners can leverage these insights for effective collaboration.

A graphic titled Industry Insights: Healthcare Bootcamp Module 300 Series with the subtitle How Providers Get Paid. The design includes a circular photo of hands reviewing charts and graphs, alongside three icons labeled Patient Care, Revenue Cycle, and Gov’t Policies.

Healthcare Bootcamp Module 302 – How Providers Get Paid

Explore common provider payment models, the key factors influencing reimbursement, and how health policy changes directly affect provider payment.

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