Certified Revenue Cycle Representative (CRCR) Practice Exam

In what type of payment methodology is a lump sum negotiated between the payer and providers?

1. Case rates

2. Fee-for-service

3. Per diem rates

4. Capitation

The correct answer is: Case rates

The correct answer is case rates because this payment methodology involves a pre-defined amount determined based on the expected costs associated with a specific case or treatment, regardless of the actual services rendered. Essentially, a lump sum is negotiated between the payer and providers for a particular episode of care, which can include a range of services for a defined condition or procedure. This approach encourages efficiencies in care since providers receive a fixed amount rather than being paid separately for each individual service. In contrast, fee-for-service pays providers for each individual service they perform, leading to a more fragmented approach to healthcare billing. Per diem rates involve daily payments for inpatient care, calculated based on the number of days a patient is hospitalized, rather than a lump sum per case. Capitation is a payment model where providers receive a fixed payment per patient regardless of the number of services provided over a certain period, which is distinctly different from negotiating a lump sum for a specific case.