Fee-for-service is a method of payment where the provider is paid a fee for
each procedure performed and billed.
Global reimbursement is a method of payment where the provider is paid one
fee for a service that consists of multiple procedure codes that are rendered
on the same date of service or over a span of time rather than paid
individually for each procedure code.
If a provider bills for several individual procedure codes that are covered
under a global procedure code, which is referred to as “unbundling,” Medicaid
Program Integrity will audit the provider’s billing.
Cost-based reimbursement, which is sometimes referred to as a per diem rate
or an encounter rate, is based on the provider’s actual costs for rendering
services to Medicaid recipients. Providers who are reimbursed on a cost
basis are: hospitals, county health department clinics, federally qualified
health centers, hospices, intermediate care facilities for the developmentally
disabled, nursing facilities, rural health clinics, and state mental hospitals.
Health maintenance organizations (HMOs) and certain other providers are
prepaid a fixed amount each month for each recipient (per capita) who is
enrolled to receive services from that HMO or provider.