Payment Regulations In Healthcare: HIPAA And ACA: [Essay Example], 1339 words GradesFixer
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Payment Regulations in Healthcare: Hipaa and Aca

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After researching the various coding and billing regulations, I feel that the biggest and most important ones are Health Insurance Portability and Accountability Act (HIPAA) and Affordable Care Act (ACA). HIPAA has set standards across the board for electronic health transactions. This also involves the protection and privacy of all heath information. HIPAA has developed national code sets for submitting and processing insurance claims. These codes sets allow for uniformity for all healthcare providers and services rendered. Each provider is given an identification number known as National Provider Identifier (NPI) which allows the provider to be identified by insurance carriers and payers when claims submitted for reimbursement.

HIPAA compliance is a regulation that holds healthcare organizations responsible for teaching and training all healthcare employees the rules and regulations of this act. This affects reimbursement because any variations from this act can result in severe consequences to include denial of reimbursement, fines to the organization, and/or closure of organization not in compliance. Prospective payment systems have allowed for rates to be fixed based on the diagnosis-related groups (DRG). Once a patient is discharged from the hospital the patient is assigned a DRG based on the diagnosis given at time of discharge. There is a fixed rate that the payers will reimburse for and this puts the profits and losses solely on the organization. If their charge is more than the fixed rate then they would face losses and may need to evaluate their revenue cycle and reimbursement processes.

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HIPAA affects prospective payment systems because the national code sets go hand in hand with the diagnosis-related groups. Each service and/or tests performed are assigned a code which must match with the DRG given at time of discharge. Any variation could result in delayed reimbursement and/or denial of reimbursement. While HIPAA utilizes DRGs, they cannot be the Medicare DRGs. This statement by CMS explains HIPAA and prospective payment systems as they both relate to code sets and DRGs; “DRG codes other than Medicare DRG codes may be used on HIPAA standard electronic transactions with health plans other than Medicare”. Medicare DRGs group together similar types of patients that a hospital treats. These cannot be utilized as part of the HIPAA standard electronic transactions. HIPAA does utilize DRGs for transactions along with their code set standards which is all part of prospective payment systems and the fixed rates that are assigned for services rendered.

The Affordable Care Act (ACA) has three main goals to include making health insurance more available and affordable to more people, expand the Medicaid program, and support medical care delivery methods that aim to decrease the cost of health care in general ( This act has a concentration on the quality of healthcare versus the quantity of healthcare someone receives. This act wants patients billed based on the value of their healthcare in relation to their outcome. Health insurance is now more affordable and the ACA gives each individual the ability to be more in control of the healthcare that they receive. This act applies to prospective payment systems because it does involve lower reimbursement rates based on services rendered.

With health insurance more affordable and easier to get, healthcare facilities are facing lower reimbursement rates for major services such as surgeries and hospital admissions. This places the majority of financial responsibility on the patients and could cause delayed reimbursements and revenue cycle. The health insurances would have contracts with physicians and involved agreements on reimbursement rates and these rates are lower due to the ACA. Physicians would be scared that the ACA would require them to expand their services while remaining at the same reimbursement rate.

Coding and billing regulations are directly affected by HIPAA and ACA. “For example, routine supplies, anesthesia, recovery room use, and most drugs are considered to be an integral part of a surgical procedure, so payment for these items are packaged into the APC payment for the surgical procedure”. This would involve code sets and DRGs. Packaging of services rendered involves correct coding and, if done incorrectly, reimbursement could be delayed or denied. The regulations set forth by ACA and HIPAA are to ensure that patients receive proper good quality care and to ensure that healthcare organizations are following the correct guidelines set forth by all of the regulations developed.

HIPAA does provide safeguards for protected health information and also ensures providers follow set codes for reimbursement. ACA makes health insurance more affordable and available to more people and allows patients to become more in control of the care that they receive. All in all, these regulations work to provide higher quality of care at more affordable rates. I do believe that prospective payment systems and HIPAA are what is working. It allows for uniformity across all of the healthcare industry. It is as simple as being assigned a DRG and code set which has fixed rates and claims submitted and allows for faster reimbursement rates.

While I do agree with the ACA and making health insurance more affordable, they will not pay nor allow reimbursement for certain services based on the insurance plan chosen. Yes the insurance is more affordable but the patient can still be held responsible for a service rendered that the insurance would not cover completely. This is the challenge. Rates are lower but patient financial responsibility could be increased and could delay and/or deny reimbursement and no end to the revenue cycle. Constant delays or denials in reimbursement could place an organization with financial burden.

I do think that some of these regulations be reevaluated. While the ACA provides health insurance at affordable rates, services may or may not be reimbursed completely which would leave patients with the financial responsibility and/or choosing between which service they can afford and will receive. It all depends on the type of health insurance plan that you have chosen and the cost that the organization charges for such services and deductibles the patient will be facing. I currently do not have health insurance. I did attempt to obtain a cheaper insurance plan that covered 6 office visits and minimal testing charges. I went to the doctor and while the office visit was covered, only a certain amount of my lab testing was covered which left the financial burden on me.

Coding and billing must be conducted in a proper manner to include remaining in compliance with regulations set forth. Documentation is very vital and any missing code or information can result in delayed and denied reimbursement. I currently work in home health but prior to this job, I worked within an internal medicine office. I was the physician’s right hand person. I would have patient’s come in for injections which would only be a nurse visit but I was responsible for ensuring the proper codes went with the proper diagnosis in order for the reimbursement process to go smoothly and in a timely manner.

For example, someone would come in for a flu vaccine and I had to ensure that I applied the nurse visit code along with the preventative immunization code and all pertaining patient information to be submitted to patient insurance for reimbursement. This immunization did not require physician visit and/or documentation. If I did not code this correctly, the claim would be delayed for more information and/or missing information and we would have to evaluate where the mistake was made. This delays the entire reimbursement process and funding for the organization.


  1. Centers for Medicare and Medicaid Services. (2012). Chapter 4: Part B hospital (including inpatient hospital part B and OPPS). In Medicare claims processing manual. Retrieved from
  2. Department of Health and Human Services, Center for Medicare and Medicaid Services, October 16th, 2003. Medicare, Department of Health & Human Services (DHHS), Provider Reimbursement Manual Centers for Medicare & Medicaid Services (CMS), Part 1, Chapter 28, Prospective Payments. Retrieved from:
  3. Harrington, M.K., (2016). Healthcare Finance and the Mechanics of Insurance and Reimbursement: Chapter 1 Introductions to Healthcare Finance and Chapter 10 Revenue Cycle Management. Burlington, MA: Jones and Bartlett Learning, LLC. Pg. 4-14 and Pg. 210-224. Retrieved from:!/4/2/[email protected]:0

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