B&C Chapter 3: Managed Health Care

Question 1

accreditation

Answer 1

voluntary process that a health care facility or organization (e.g., hospital or managed care plan) undergoes to demonstrate that it has met standards beyond those required by law.

Question 2

adverse selection

Answer 2

covering members who are sicker than the general population.

Question 3

Amendment to the HMO Act of 1973

Answer 3

legislation that allowed federally qualified HMOs to permit members to occasionally use non-HMO physicians and be partially reimbursed.

Question 4

cafeteria plan

Answer 4

also called triple option plan; provides different health benefit plans and extra coverage options through an insurer or third-party administrator.

Question 5

capitation

Answer 5

provider accepts preestablished payments for providing health care services to enrollees over a period of time (usually one year).

Question 6

case manager

Answer 6

submits written confirmation, authorizing treatment, to the provider.

Question 7

closed-panel HMO

Answer 7

health care is provided in an HMO-owned center or satellite clinic or by providers who belong to a specially formed medical group that serves the HMO.

Question 8

competitive medical plan (CMP)

Answer 8

an HMO that meets federal eligibility requirements for a Medicare risk contract, but is not licensed as a federally qualified plan.

Question 9

consumer-directed health plan (CDHP)

Answer 9

see consumer-driven health plan.

Question 10

customized sub-capitation plan (CSCP)

Answer 10

managed care plan in which health care expenses are funded by insurance coverage; the individual selects one of each type of provider to create a customized network and pays the resulting customized insurance premium; each provider is paid a fixed amount per month to provide only the care that an individual needs from that provider (called a sub-capitation payment).

Question 11

direct contract model HMO

Answer 11

contracted health care services delivered to subscribers by individual providers in the community.

Question 12

enrollees

Answer 12

also called covered lies; employees and dependents who join a managed care plan; known as beneficiaries in private insurance plans.

Question 13

exclusive provider organization (EPO)

Answer 13

managed care plan that provides benefits to subscribers if they receive services from network providers.

Question 14

external quality review organization (EQRO)

Answer 14

responsible for reviewing health care provided by managed care organizations.

Question 15

federally qualified HMO

Answer 15

certified to provide health care services to Medicare and Medicaid enrollees.

Question 16

fee-for-service

Answer 16

reimbursement methodology that increases payment if the health care service fees increase, if multiple units of service are provided, or if more expensive services are provided instead of less expensive services (e.g., brand name vs. generic prescription medication).

Question 17

flexible benefit plan

Answer 17

see cafeteria plan and triple option plan

Question 18

flexible spending account (FSA)

Answer 18

tax-exempt account offered by employers with any number of employees, which individuals use to pay health care bills; participants enroll in a relatively inexpensive, high-deductible insurance plan, and a tax-deductible savings account is opened to cover current and future medical expenses; money deposited (and earnings) is tax-deferred, and money is withdrawn to cover qualified medical expenses tax-free; money can be withdrawn for purposes other than health care expenses after payment of income tax plus a 15 percent penalty; unused balances “roll over” from year to year, and if an employee changes jobs, the FSA can continue to be used to pay for qualified health care expenses; also called health savings account (HSA) or health savings security account (HSSA).

Question 19

gag clause

Answer 19

prevents providers from discussing all treatment options with patients, whether or not the plan would provide reimbursement for services.

Question 20

gatekeeper

Answer 20

primary care provider for essential health care services at the lowest possible cost, avoiding nonessential care, and referring patients to specialists.

Question 21

group model HMO

Answer 21

contracted health care services delivered to subscribers by participating providers who are members of an independent multispecialty group practice.

Question 22

group practice without walls (GPWW)

Answer 22

contract that allows providers to maintain their own offices and share services (e.g., appointment scheduling and billing).

Question 23

health care reimbursement account (HCRA)

Answer 23

tax-exempt account used to pay for health care expenses; individual decides, in advance, how much money to deposit in an HCRA (and unused funds are lost).

Question 24

health maintenance organization (HMO)

Answer 24

responsible for providing health care services to subscribers in a given geographical area for a fixed fee.

Question 25

Health Maintenance Organization (HMO) Assistance Act of 1973

Answer 25

authorized grants and loans to develop HMOs under private sponsorship; defined a federally qualified HMO as one that has applied for, and met, federal standards established in the HMO Act of 1973; required most employers with more than 25 employees to offer HMO coverage if local plans were available.

Question 26

health reimbursement arrangement (HRA)

Answer 26

tax-exempt accounts offered by employers with 50 or more employees; individuals use HRAs to pay health care bills; HRAs must be used for qualified health care expenses, require enrollment in a high-deductible insurance policy, and can accumulate unspent money for future years; if an employee changes jobs, the HRA can continue to be used to pay for qualified health care expenses.

Question 27

health savings account (HSA)

Answer 27

see flexible spending account.

Question 28

health savings security account (HSSA)

Answer 28

see flexible spending account.

Question 29

Healthcare Effectiveness Data and Information Set (HEDIS)

Answer 29

created standards to assess managed-care systems using data elements that are collected, evaluated, and published to compare the performance of managed health care plans.

Question 30

independent practice association (IPA) HMO

Answer 30

see individual practice association (IPA) HMO.

Question 31

individual practice association (IPA) HMO

Answer 31

also called independent practice association (IPA); type of HMO where contracted health services are delivered to subscribers by providers who remain in their independent office settings.

Question 32

integrated delivery system (IDS)

Answer 32

organization of affiliated provider sites (e.g., hospitals, ambulatory surgical centers, or physician groups) that offer joint health care services to subscribers.

Question 33

integrated provider organization (IPO)

Answer 33

manages the delivery of health care services offered by hospitals, physicians employed by the IPO, and other health care organizations (e.g., an ambulatory surgery clinic and a nursing facility).

Question 34

legislation

Answer 34

laws.

Question 35

managed care organization (MCO)

Answer 35

responsible for the health of a group of enrollees; can be a health plan, hospital, physician group, or health system.

Question 36

managed health care (managed care)

Answer 36

combines health care delivery with the financing of services provided.

Question 37

management service organization (MSO)

Answer 37

usually owned by physicians or a hospital and provides practice management (administrative and support) services to individual physician practices.

Question 38

mandates

Answer 38

laws.

Question 39

medical foundation

Answer 39

nonprofit organization that contracts with and acquires the clinical and business assets of physician practices; the foundation is assigned a provider number and manages the practice’s business.

Question 40

Medicare risk program

Answer 40

federally qualified HMOs and competitive medical plans (CMPs) that meet specified Medicare requirements provide Medicare-covered services under a risk contract.

Question 41

National Committee for Quality Assurance (NCQA)

Answer 41

a private, not-for-profit organization that assesses the quality of managed care plans in the United States and releases the data to the public for its consideration when selecting a managed care plan.

Question 42

network model HMO

Answer 42

contracted health care services provided to subscribers by two or more physician multispecialty group practices.

Question 43

network provider

Answer 43

physician, other health care practitioner, or health care facility under contract to the managed care plan.

Question 44

Office of Managed Care

Answer 44

CMS agency that facilitates innovation and competition among Medicare HMOs.

Question 45

open-panel HMO

Answer 45

health care provided by individuals who are not employees of the HMO or who do not belong to a specially formed medical group that serves the HMO.

Question 46

physician incentive plan

Answer 46

requires managed care plans that contract with Medicare or Medicaid to disclose information about physician incentive plans to CMS or state Medicaid agencies before a new or renewed contract receives final approval.

Question 47

physician incentives

Answer 47

include payments made directly or indirectly to health care providers to serve as encouragement to reduce or limit services (e.g., discharge an inpatient from the hospital more quickly) to save money for the managed care plan.

Question 48

physician-hospital organization (PHO)

Answer 48

owned by hospital(s) and physician groups that obtain managed care plan contracts; physicians maintain their own practices and provide health care services to plan members.

Question 49

point-of-service plan (POS)

Answer 49

delivers health care services using both managed care network and traditional indemnity coverage so patients can seek care outside the managed care network.

Question 50

Preferred Provider Health Care Act of 1985

Answer 50

eased restrictions on preferred provider organizations (PPOs) and allowed subscribers to seek health care from providers outside of the PPO.

Question 51

primary care provider (PCP)

Answer 51

responsible for supervising and coordinating health care services for enrollees and preauthorizing referrals to specialists and inpatient hospital admissions (except in emergencies).

Question 52

quality assessment and performance improvement (QAPI)

Answer 52

program implemented so that quality assurance activities are performed to improve the functioning of Medicare Advantage organizations.

Question 53

quality assurance programs

Answer 53

activities that assess the quality of care provided in a health care setting.

Question 54

Quality Improvement System for Managed Care (QISMC)

Answer 54

established by Medicare to ensure the accountability of managed care plans in terms of objective, measurable standards.

Question 55

report card

Answer 55

contains data regarding a managed care plan’s quality, utilization, customer satisfaction, administrative effectiveness, financial stability, and cost control.

Question 56

risk adjustment

Answer 56

method of adjusting capitation payments to health plans, accounting for difference in expected health costs of enrollees.

Question 57

risk adjustment model

Answer 57

provides payment to health plans that disproportionately attract higher-risk enrollees and uses an actuarial tool to predict health care costs based on the relative actuarial risk of enrollees in risk adjustment covered health plans.

Question 58

risk adjustment program

Answer 58

lessens or eliminates the influence of risk selection on premiums charges by health plans and includes the risk adjustment model and risk transfer formula.

Question 59

risk contract

Answer 59

an arrangement among providers to provide capitated (fixed, prepaid basis) health care services to Medicare beneficiaries.

Question 60

risk pool

Answer 60

created when a number of people are grouped for insurance purposes (e.g., employees of an organization); the cost of health care coverage is determined by employees’ health status, age, sex, and occupation.

Question 61

risk transfer formula

Answer 61

transfers funds from health plans with relatively lower risk enrollees to health plans that enroll relatively higher risk individuals, protecting such health plans against adverse selection.

Question 62

second surgical opinion (SSO)

Answer 62

second physician is asked to evaluate the necessity of surgery and recommend the most economical, appropriate facility in which to perform the surgery (e.g., outpatient clinic or doctor’s office versus inpatient hospitalization).

Question 63

self-referral

Answer 63

enrollee who sees a non-HMO panel specialist without a referral from the primary care physician.

Question 64

staff model HMO

Answer 64

health care services are provided to subscribers by physicians and other health care practitioners employed by the HMO.

Question 65

standards

Answer 65

requirements.

Question 66

sub-capitation payment

Answer 66

each provider is paid a fixed amount per month to provide only the care that an individual needs from that provider.

Question 67

subscribers (policyholders)

Answer 67

person in whose name the insurance policy is issued.

Question 68

survey

Answer 68

conducted by accreditation organizations (e.g., The Joint Commission) and/or regulatory agencies (e.g., CMS) to evaluate a facility’s compliance with standards and/or regulations.

Question 69

triple option plan

Answer 69

usually offered by either a single insurance plan or as a joint venture among two or more third-party payers, and provides subscribers or employees with a choice of HMO, PPO, or traditional health insurance plans; also called cafeteria plan or flexible benefit plan.

Question 70

utilization review organization (URO)

Answer 70

entity that establishes a utilization management program and performs external utilization review services.