Which of the following represents a risk associated with per diem payments?

Which of the following represents a risk associated with per diem payments?

• A. The risk to the insurance company or health plan
• B. The risk of overutilization of services
• C. The risk from patient non-compliance
• D. The risk of incorrect billing codes

Answer: (A)

The answer reflects a risk that is commonly associated with per diem payment models. Per diem payments involve a fixed amount paid per day of service, regardless of the specific services provided. This structure can lead to a financial burden on the insurer or health plan if the healthcare provider is incentivized to extend the length of stay or the number of services provided without necessarily improving the quality of care. As a result, the insurance company may face increased costs if providers use the daily payment to justify unnecessary extended care. In this context, the focus is on balancing the financial risk to the insurance company, as they must manage their payouts effectively while ensuring that patient care is not compromised. The payment model can create a scenario where the insurance company's financial risk grows with longer patient stays that do not correlate with better health outcomes, thereby emphasizing the inherent risk present in per diem payment arrangements.

The answer reflects a risk that is commonly associated with per diem payment models. Per diem payments involve a fixed amount paid per day of service, regardless of the specific services provided. This structure can lead to a financial burden on the insurer or health plan if the healthcare provider is incentivized to extend the length of stay or the number of services provided without necessarily improving the quality of care. As a result, the insurance company may face increased costs if providers use the daily payment to justify unnecessary extended care.

In this context, the focus is on balancing the financial risk to the insurance company, as they must manage their payouts effectively while ensuring that patient care is not compromised. The payment model can create a scenario where the insurance company's financial risk grows with longer patient stays that do not correlate with better health outcomes, thereby emphasizing the inherent risk present in per diem payment arrangements.