Task #1.  In recent years, healthcare pricing has come under much scrutiny. Calls for price transparency have been made, loudly and clearly. Discounting prices to some recipients or payers occur, but how and why does this happen? Patients with insurance typically pay an insurance-negotiated discounted rate, while patients without insurance can be asked to pay the full amount that is charged by the provider or facility. Why can’t you simply look on each provider’s website to see the exact cost of your office visit, or your x-ray? With the many methods of cost-setting available to us as healthcare managers, we see how there is a high degree of variability in the amount charged per service from person to person, and state to state. In moving towards either voluntary or state-mandated transparency in healthcare pricing, we consider the following Case questions.
After completing the required background readings, please complete the following questions:

Describe the recent scrutiny of the methods of healthcare pricing. Is this scrutiny justified, or unjustified?
What can healthcare managers do to be best prepared for increasing future calls for transparency (either voluntary, or state-mandated)?
How have state transparency laws affected healthcare pricing in your home state, or state of current residency? Can you locate the exact costs of healthcare services you or your family may need in the near future?
How is cost-shifting implemented within the healthcare settings? Do you believe this ethical?

Task # 2: After completing the required background readings, please complete the following:
Imagine you are the Practice Manager of a multi-physician primary care center in Pennsylvania. The four physician-owners have asked you to make a presentation to them on how their group’s profitability could be improved, without having to raise their charges/rates for services. Using Exhibit 8.5 and 8.6 in Dr. Nowicki’s textbook (see required background reading), as well as some research in peer-reviewed sources of your own, create a professional-looking PowerPoint presentation of 6-8 slides which clearly summarizes the information the physicians are requesting. Include thorough speaker’s notes to further expand upon and explain your points.

Assignment Expectations: Conduct additional research to gather sufficient information to support your presentation.
Provide  quality PowerPoint slides of bulleted-point information content (with speaker’s notes), not including title page and reference slides. Don’t forget to use in-text citations.

Required to watch:
View: Taylor, M. (2014). Managerial Accounting: Cost – Volume – Profit and Break-Even.
Available at: https://www.youtube.com/watch?v=Q7St6Ad70Vc
Copyright 2018. Health Administration Press.
All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.
CHAPTER 5
THIRD-PARTY PAYMENT
It is anyone’s guess how much of our revenue will be at risk five years from now, but
it will be more than it is today. To be paid for value, we have to be adept at creating
and maintaining value—that is a requirement.
Juan Serrano (2014), former senior vice president of payer
strategy and operations, Catholic Health Initiatives
Learning Objectives
After completing this chapter, you should be able to do the following:
?? Review the history of third-party reimbursement
?? Classify managed care organizations
?? Examine new methods of financing and delivering healthcare
?? Identify methods of payment, including bad debt and charity care
?? Compute cost-shifting and cost-cutting problems
Note: Terms shown in boldface in this chapter are defined in the margins and appear in the glossary. Terms in boldface italic
also appear in the glossary.
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Introduction to the Financial Management of Healthcare Organizations
I n t r o d uc t i o n
Third-party payers are agents of patients who contract with providers (the second party) to
pay all or a part of the bill to the patient (the first party). The most common third-party
payers are insurance companies and the government (through Medicare and Medicaid).
Third-party payers have had an important effect on healthcare organizations since the 1920s.
As mentioned in chapter 1 and illustrated in exhibit 5.1, third-party payment—including
payments from the federal government, private insurance, and state and local government—
represented 84.0 percent of total personal healthcare expenditures in 2014 (CMS 2016a).
H i s t o ry o f T hi r d -P a rty P ayment
second-party payment