rcm glossary

Global payment method

Global payment method is a reimbursement model in healthcare RCM where a fixed amount is paid to providers for all services rendered to a patient over a defined period, regardless of the actual services provided or their costs.

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What is Global Payment Method?

The global payment method is a term commonly used in the healthcare revenue cycle management (RCM) industry. It refers to a payment model where a single payment is made to cover all the services provided to a patient during a specific episode of care or a defined period. This method is often used in alternative payment models (APMs) and value-based care arrangements, aiming to promote better coordination and efficiency in healthcare delivery.

In a global payment method, healthcare providers receive a fixed amount of money upfront for the entire episode of care, regardless of the actual services rendered or the costs incurred. This payment encompasses all the necessary services, including hospital stays, physician visits, diagnostic tests, medications, and other related treatments. The goal is to incentivize providers to deliver high-quality care while controlling costs.

Difference between Global Payment Method and Other Similar Terms

While the global payment method may seem similar to other payment models, such as bundled payments or capitation, there are distinct differences between them. Let's explore these differences to gain a better understanding:

1. Global Payment Method vs. Bundled Payments:  

- Bundled payments involve a single payment for a specific set of services related to a particular condition or procedure. It focuses on a narrower scope of care compared to the global payment method, which covers a broader range of services over a defined period.  

- In bundled payments, providers are typically paid separately for each service rendered, whereas global payments provide a lump sum for all services, encouraging providers to manage costs more efficiently.

2. Global Payment Method vs. Capitation:   -

Capitation is a payment model where providers receive a fixed amount per patient per month, regardless of the services rendered. It aims to cover all necessary care for a specific population.  

- In contrast, the global payment method focuses on a specific episode of care or a defined period, rather than a per-patient basis. It allows providers to have more flexibility in managing resources and tailoring care to individual patient needs.

Examples of Global Payment Method

To illustrate the concept of the global payment method, let's consider a few examples:

1. Episode-Based Payment:  

- In this example, a healthcare organization receives a fixed payment for all services related to a knee replacement surgery. This global payment covers pre-operative consultations, the surgical procedure, post-operative care, physical therapy, and any other necessary services during the recovery period.  

- The healthcare provider is responsible for managing the patient's entire care journey within the allocated payment, ensuring high-quality care while controlling costs.

2. Accountable Care Organization (ACO):  

- ACOs are groups of healthcare providers who come together to deliver coordinated care to a defined population. They often operate under global payment arrangements.  

- In an ACO, providers receive a fixed payment to cover all the healthcare needs of their assigned patient population. This global payment method encourages collaboration among providers, as they share in the financial risks and rewards based on the quality and cost outcomes achieved.

3. Comprehensive Primary Care Plus (CPC+):  

- CPC+ is an advanced primary care medical home model that aims to strengthen primary care delivery. It utilizes a global payment method to support comprehensive, coordinated, and patient-centered care.  

- Under CPC+, primary care practices receive a risk-adjusted per-patient-per-month payment to cover all primary care services, including care management, coordination, and enhanced access. This global payment method allows practices to invest in care coordination resources and provide more proactive and preventive care.

In summary, the global payment method is a payment model in healthcare RCM where a single payment is made to cover all services provided during a specific episode of care or a defined period. It differs from other payment models like bundled payments and capitation by its broader scope and focus on specific episodes of care.

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