5 - HEALTH INSURANCE REGULATION Flashcards
The Employee Retirement Income Security Act (ERISA) of 1974 is a federal law that establishes minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans. In which of the following scenarios is ERISA most applicable?
Answer: A multi-state corporation plans to set up a self-funded health insurance scheme for its employees.
Explanation:
ERISA is primarily applicable to privately established retirement and health plans. Although ERISA does not require companies to establish plan, it does set standards for those that choose to. Therefore, in the scenario where a multi-state corporation is setting up a self-funded health insurance scheme, ERISA regulations would be the most relevant. The other options do not fit as neatly into ERISAs jurisdiction as they either involve state-regulated plans, individual plans, or government-funded programs like Medicare.
The Health Insurance Portability and Accountability Act (HIPAA) enacted in 1996 has been instrumental in protecting patients’ health information. Which of the following best represents a violation of the Privacy Rule under HIPAA?
Answer: A medical office receptionist discussing the diagnosis of a patient loudly enough that others in the waiting area can hear.
Explanation:
HIPAA’s Privacy Rule prohibits the unauthorized sharing of a patient’s Protected Health Information (PHI) without their permission, except in specific circumstances. One key element of this rule is to maintain patient confidentiality, which is violated in the scenario where a receptionist discusses a patient’s diagnosis within earshot of others. The other options do not represent violations of the Privacy Rule, though they might raise issues under other regulations.
The McCarran-Ferguson Act of 1945 has had a substantial impact on the health insurance industry. This law provided state with the authority to regulate insurance businesses. Which of the following scenarios is in direct contradiction to the provisions of the McCarran-Ferguson Act?
Answer: A federal law is passed that mandates a single nationwide standard for health insurance policies.
Explanation:
The McCarran-Ferguson Act gives states the authority to regulate insurance, not the federal government. This implies that insurance standards can vary state by state. If a federal law is passed that creates a single nationwide standard for health insurance policies, it would contradict the provisions of the McCarran-Ferguson Act. The other scenarios align with the state’s power to regulate insurance under this Act.
The Affordable Care Act (ACA) established health insurance marketplaces (or exchanges) for individuals to purchase coverage. If an individual were to apply for coverage through one of these marketplaces, which of the following scenarios would result in the individual being eligible for a premium tax credit?
Answer: The individual earns an income that is between 100% and 400% of the federal poverty level and does not have access to affordable employer-sponsored coverage.
Explanation: The premium tax credit under the ACA is designed to help make insurance purchased through the Health Insurance Marketplace more affordable for individuals and families with moderate income. To be eligible, an individual or family must have an income that falls within a certain range (between 100% and 400% of the federal poverty level) an not have access to affordable, qualifying health coverage through an employer or a government program like Medicaid or Medicare. In the other scenarios, the individual either has access to other government programs, falls outside the income range, or is below the federal poverty level, and thus would not be eligible for the ta credit.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) provides certain former employees, retirees, spouses, former spouses, and dependent children the right to temporary continuation of health coverage at group rates. Which scenario best exemplifies the application of COBRA?
Answer: A recently divorced spouse seeks to maintain health coverage that was previously provided through their ex-spouse’s employer.
Explanation:
COBRA is intended to provide a temporary extension of employer-provided health coverage in situations where coverage may otherwise be lost due to certain specific events. These events include job loss, reductional work hours, transition between jobs, death, divorce, and other life events. Therefore, a recently divorced spouse who wishes to maintain their previous health coverage, which was provided through their ex-spouse’s employer, would be an example of a situation where COBRA would apply. The other scenarios either involve individuals who are not eligible for COBRA or where COBRA is not the most relevant regulation.
Under the Family and Medical Leave Act (FMLA) of 1993, eligible employees of covered employers are entitled to take unpaid, job-protected leave for specified family and medical reasons. The following scenarios are protected under the FMLA?
- An employee takes leave to care for a newborn child within one year of birth.
- An employee takes leave due to a serious health condition that makes them unable to perform the essential functions of their job.
- An employee takes leave to care for a parent with a serious health condition.
Explanation:
The Family and Medical Leave Act covers leave for the birth of a child, an employee’s own serious health condition, or to care for a spouse, child, or parent with a serious health condition. A minor, short-term illness is generally not considered a “serious health condition” under the FMLA. Therefore, an employee taking leave to care for a spouse with a minor, short-term illness would not be protected under this Act.
Medicare, a federal health insurance program, consists of different parts, each offering different coverage. What scenario best describes the application of Medicare Part B?
Answer: A 70-year-old individual requires a series of outpatient physical therapy sessions following a knee surgery.
Explanation:
Medicare Part B, often referred to as medical insurance, covers two types of services: medically necessary services, and preventive services. This includes outpatient care, doctor’s services, physical therapy and some home health care, but not most prescription drugs. So, 70-year-old individual needing outpatient physical therapy sessions is an instance where Medicare Part B would apply.
The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 requires health insurance providers to cover mental health and substance use disorder care in the same way they cover physical health care. What situation would most likely be a violation of the MHPAEA?
Answer: An insurance company requires higher co-pays for mental health services than for physical health services.
Explanation:
The MHPAEA mandates that if an insurance plan covers mental health and substance use disorder services, it must provide coverage that is no more restrictive than the coverage for medical and surgical services. This means that financial requirements, such as co-pays, and treatment limitations should be equal for both types of services. Therefore, if an insurance company requires higher co-pays for mental health services compared to physical health services, it would likely be a violation of the MHPAEA.
Medicaid is a joint federal and state program that provides health coverage to people with low income, including some low-income adults, children, pregnant women, elderly adults, and people with disabilities. What scenario best describes a situation that is typically covered under Medicaid?
Anwer: A low-income single mother needs prenatal and postnatal care for her upcoming child.
Explanation:
Medicaid is designed to provide health coverage for individuals and families with low income. This includes coverage for some low-income adults, children, pregnant women, elderly adults, and people with disabilities. As such, a low-income single mother needing prenatal and postnatal care would be an instance where Medicaid would apply.
The Health Insurance Portaablity and Accountability Act (HIPAA) is a federal law that protects patient health information. What scenario cold be considered a breach of HIPAA’s privacy rule?
Answer: A nurse discusses a patient’s health status with the patient’s family member without the patient’s explicit consent.
Explanation:
HIPAA’s privacy rule safeguards the privacy of patient health information, and it prohibits the disclosure of this information without the patient’s consent, with certain exceptions. While healthcare providers can share patient information for treatment purposes and medical researchers can use anonymized data, a nurse discussing a patient’s health status with a family member without the patient’s explicit consent could potentially be a violation of the privacy rule.
The State Children’s Health Insurance Program (SCHIP) provides health coverage to uninsured children in families with incomes that are modest but too high to qualify for Medicaid. What scenario bust describes a situation in which SCHIP could apply?
Answer: A middle-income family cannot afford health coverage for their three children through their private insurer.
Explanation:
SCHIP is intended to provide health coverage to children in families that earn too much to qualify for Medicaid but cannot afford private health insurance. Therefore, the scenario where a middle-income family cannot afford health coverage for their children through a private insurer represents a case where SCHIP could apply.
State laws often dictate the requirements for health insurance companies operating within their borders, including rules regarding the establishment of provider networks. What action by an insurance company would most likely contravene these typical state requirements?
Answer: The insurance company refuses to include any mental health providers in its network.
Explanation:
State laws typically require insurance companies to maintain a network of providers that can meet the healthcare needs of their enrollees, which includes a diverse range of provider specialties. By refusing to include any mental health providers in its network, the insurance company would be failing to meet the needs of policyholders who require mental health services, and this would likely contravene state laws. The other scenarios represent actions that are generally acceptable and, in many cases, encouraged under state laws.
State insurance departments commonly have the authority to review and approve health insurance premium increases to ensure they are justified and not excessive. What scenario would likely raise concerns about an excessive rate increase?
Answer: An insurance company proposes a 15% increase in premiums after reporting record profits in the previous quarter.
Explanation:
State insurance departments review proposed rate increases to ensure they are based on accurate, verifiable data and are necessary to cover the anticipated costs of care and the insurer’s administrative costs. If an insurance company proposes a significant rate increase like 15% despite reporting record profits, it could raise concerns about the rate increase being unjustified or excessive. The other scenarios describe typical reasons for adjusting premiums that are usually considered reasonable and justifiable.
Many states have laws that require insurance companies to provide certain benefits, known as mandated benefits. What would most likely be an example of a state mandated benefit?
Answer: An insurance company includes coverage for preventive care services in all its plans.
Explanation:
Mandated benefits are those that state laws require health insurance policies to cover. These typically include essential health benefits like preventive care services. Therefore, and insurance company providing coverage for preventive care services in all its plans aligns with the concept of state-mandated benefits. The other scenarios involve optional. additional, or bonus services that aren’t typically mandated by state laws.
In certain states, laws have been passed that allow individuals to seek care from ot-of-network providers under specific circumstances without incurring additional costs. What scenario most closely reflects the application of this type of law?
Answer: A policyholder receives emergency care at the nearest hospital, which isn’t part of their insurance company’s network, following a car accident.
Explanation:
While rules can vary, state laws that require insurance companies to cover out-of-network care typically apply to situations where the care is urgently needed and it’s not feasible for the patient to reach an in-network provider. Therefore, a policyholder receiving emergency care at the nearest hospital, even though it’s not in their insurer’s network, would most likely be covered under these laws. The other scenarios involve non-emergency situations where the policyholder has chosen to seek care from out-of-network providers for reasons other than necessity.
HIPAA Privacy Rule sets national standards for protecting individuals” medical records and other personal health information. What scenario does a healthcare entity potentially breach the Privacy Rule?
Answer: A hospital disposes of unshredded patient records in a public dumpster.
Explanation:
The Privacy Rule requires healthcare entities to implement appropriate administrative, technical, and physical safeguards to protect patient information. Unshredded patient records discarded in a public dumpster could be accessed by unauthorized individuals, which is a clear violation of HIPAA.
The HIPAA Security Rule sets national standards to protect electronic Personal Health Information (ePHI) that is created, received< used< or maintained by a Covered Entity (CE) or Business Associate (BA). The following scenarios depicts a potential violation of the Security Rule?
Answer: A pharmacist accesses ePHI on an unsecured, public Wi-Fi network.
Explanation:
Accessing ePHI on an unsecured, public Wi-Fi network is a clear violation of the HIPAA Security Rule, which requires adequate protection and confidentiality of ePHI, including the implementation of technical safeguards. This scenario leaves the ePHI vulnerable to potential unauthorized access.
Under HIPAA, there are certain situations in which personal health information can be shard without the patient’s permission, often referred to as “permitted uses and disclosures.” The following scenario is most likely a permitted use or disclosure:
Answer: A health clinic shares a patient’s test results with public health authorities to report a case of a contagious disease.
Explanation:
Public health activities, including the reporting of certain contagious diseases for public health surveillance, are considered permitted uses and disclosures under HIPAA. The aim is to prevent or control disease, injury, or disability.
HIPAA’s Minimum Necessary Rule requires Covered Entities to make reasonable efforts to limit Protected Health Information (PHI) to the minimum necessary to accomplish the intended purpose. What scenario potentially violates the Minimum Necessary Rule?
Answer:
An insurance company requests a complete copy of a patient’s medical record to process a routine claim.
Explanation:
HIPAA’s Minimum Necessary Rule stipulates that healthcare entities must take reasonable steps to limit the use or disclosure of, and requests for, PHI to the minimum necessary to accomplish the intended purpose. Requesting a complete medical record just to process a routine claim is likely an excessive amount of information, potentially violating this rule. In contrast the following scenarios depict appropriate use and disclosure of PHI for specific, necessary purposes:
1. A hospital billing department accesses a patient’s diagnosis codes to process a claim.
- A doctor shares specific test results with a specialist to coordinate patient care.
- A pharmacist reviews a patient’s medication history to check for potential drug interactions.
HIPAA has a series of patient rights including the “Right to Access,” which allows individuals to inspect and obtain a copy of their health information. What scenario most accurately demonstrates a violation of this right?
Answer: A hospital refuses to provide a patient with a copy of their medical records, stating it’s against their policy.
Explanation:
Under HIPAA’s “Right to Access,” individuals have the right to review and obtain a copy of their health information, with very few exceptions. A hospital refusing to provide a patient with their medical records without a valid reason, such as certain legal cases would be violating this right. The other scenarios are all generally compliant with the HIPAA guidelines concerning patients” right to access their health information:
1 A doctor’s office charges a reasonable fee to mail a patient their medical records.
- A clinic provides a patient with a copy of their lab results upon request.
- An insurance company allows a patient to view their health information online through a secure patient portal.
