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DBA, Part B > Chapter 14 > Flashcards

Chapter 14 Flashcards

1
Q

What one topic affects all aspects of a carrier’s business?

A

Network discounts and resulting cost savings

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2
Q

From a recruiting perspective, there is an inverse relationship between the level of fees paid to dentists and the (size / quality) of the network.

A

Size

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3
Q

What tradeoff should purchasers, consultants, and dentists consider when network access is of the utmost importance?

A

Larger network with smaller discounts

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4
Q

When is it prudent to consider a smaller, deeper discounted network?

A

Cost saving is the goal

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5
Q

A larger network with smaller discount may result in greater cost savings overall when you account for the impact of

A

Effective discount

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6
Q

True or False: Having a deeply discounted fee schedule is not a guarantee of network based cost savings

A

True

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7
Q

In selecting a PPO plan, what else does a purchaser need to consider besides the fee schedule?

A

Number and percent of claims dollars flowing to network dentists; type and mix of services

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8
Q

______ refers to the percentage difference between the fee actually allowed for a claim, based on a mutually agreed-upon contract between network dentists and carriers.

A

Discounts

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9
Q

If a fee of $80 is allowed for a service that generally costs $100, the discount is

A

20%

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10
Q

A weighted average discount used for claims paid to network dentists is called

A

average network discount

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11
Q

Which type of discount includes a factor to account for the level of network penetration?

A

Effective discount

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12
Q

_____ provides the best way to compare total savings potential across various dental plans.

A

Effective discount

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13
Q

True or False: Having higher network discounts but lower effective discounts would apply to where dentists are relative to plan members, especially how many network dentists are being accessed by employees.

A

True

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14
Q

According to the author’s experience, what is the correlation between type of network discount and network savings?

A

Networks with the highest effective discount in an area—and therefore the greatest network savings—are usually the largest of the networks in that area.

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15
Q

_____ PPOs are the most commonly used network design structure.

A

Passive

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16
Q

Under passive PPOs, what is a good rule of thumb when estimating the possible level of in-network utilization?

A

Assume that the percent of member using network dentists will mirror, on average, the degree of network penetration

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17
Q

What does an active PPO provide members that may make them more appealing during economic downturns?

A

Greater cost-control features

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18
Q

An active plan design with (more / less) prominent benefit differentials can be an effective way to encourage the use of network dentists.

A

more

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19
Q

Which type of plan pays up to the network schedule regardless if the dentist is contracted or not?

A

MAC

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20
Q

Why do MAC plans appear to have the same plan design as a passive PPO?

A

The patient pays their coinsuance percentage of the network fee, plus the entire difference between that fee and the amount actually billed by the dentist.

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21
Q

The difference between MAC plans and passive PPOs is that (MAC / PPO) plans create significantly greater out-of-pocket cost for patients who go out of network.

A

MAC

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22
Q

MAC plans typically result in (more / less) claim dollars being paid at the discounted, network level than passive plans.

A

more

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23
Q

When comparing discounts across multiple dental plans, what is it important to ask?

A

Discount from what?

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24
Q

What are average charges?

A

Average fee submitted across all claims for a given procedure

25
Q

Why use industry data that show average charges by region?

A

Helps to ensure all discounts are calculated on the same basis

26
Q

What do the terms usual and customary (U&C), reasonable and customary (R&C), or usual, customary and reasonable (UCR) mean?

A

Fees represent an attempt to determine charges typical for dentists in a given area

27
Q

Most often, usual and customary fees are used (as a basis for discount calculations / to set limits on what a plan will pay for claims to noncontracted dentists).

A

to set limits on what a plan will pay for claims to noncontracted dentists

28
Q

On what basis is a fee determined to be usual and customary?

A

On a statistically valid approach that uses market prices charged by dentists in a given region to make fee determinations.

29
Q

What is the most common method to make fee determinations?

A

Use a specified percentile of dentists’ charges

30
Q

What does the nth percentile of dentist fees mean?

A

The nth percentile means that n percent of dentists charge a fee less than or equal to that amount.

31
Q

Similar to prices for all goods and services, fees allowed for network dentists have increased (one or two / three or four) percent annually.

A

one or two

32
Q

For most of the past decade, dentists’ fees increased about ______ percent each year.

A

3.5-4%

33
Q

What effect did the 2007-2010 recession have on the dental market?

A

Placed downward pressure on prices and dentists and carriers became more cautious about increasing fees

34
Q

What was the original approach carriers developed to contract with dentists?

A

Developed one fee schedule for each geographical area-by state, county or Zip

35
Q

Why did carriers move away from the one-schedule-per-area model?

A

It became too costly to add new dentists to the network without increasing the fees paid to existing dentists.

36
Q

Today carriers focus more on ____ to track their progress, rather than measuring network size and average discounts.

A

effective discounts

37
Q

Why is it prudent to add a dentist to the network at a smaller discount than fees used in the area?

A

To create savings for the plan and for customers.

38
Q

Claims by specialists generally make up ____ percent of network charges.

A

10-20%

39
Q

What approach did some carriers take to address the issue of specialists charging higher fees than general dentists for the same procedures?

A

Traditionally used a separate standard fee schedule for each specialty

40
Q

Why would a network with few or no contracted specialists have lower discounts than one with an extensive specialty panel?

A

The larger specialty group would receive higher fees

41
Q

How can the problem of administrative complexity related to the maintenance of thousands of fee schedules be overcome?

A

Flexible claim system and savvy use of tech

42
Q

What must be in place to avoid increasing fees too quickly and eroding discounts?

A

Careful controls and well-trained staff must be in place—actuarial, network development, and dentist consultants

43
Q

How do multiple schedules make it harder to calculate discounts and demonstrate their impact of costs savings to customers?

A

Requires looking at all claims to study how many are based on each set of fees, and weighting each fee set to determine the overall discount

44
Q

What is an advantage of contracting with some dentists at higher fees than others, particularly with active PPO and MAC plans?

A

Generally any discount saves money compared to no discount.

45
Q

Given the same scenario, what is the disadvantage for an active PPO when a dentist joins a network with higher than standard network fees?

A

The plan now has an increase in costs not fully offset by higher benefits to that dentist’s patients.

46
Q

True or False: Under a MAC plan, contracting with any dentist at fees higher than the standard automatically brings them into the network at a higher cost than that of an out of-network dentist

A

True

47
Q

While contractual changes in a MAC plan involving higher fees can erode the cost advantage to plan sponsors, how will members benefit?

A

They would be responsible for the full difference between the low MAC and the providers full fee were the dentist out of network

48
Q

According to the text, what is the most important consideration for choosing a dental plan, especially when the plan is self-insured?

A

Minimizing over claim cost

49
Q

What is the metric that gives the best comparison of overall savings from the network, leading to a comparison of overall costs?

A

effective discounts

50
Q

What is the most common approach plans can use to control out-of-network cost?

A

Use some sort of usual and customary fees to limit plan reimbursement for out-of network claims with the patient responsible for any amount billed above this limit (called balance billing).

51
Q

What is the most rigorous way to control out-of-network cost?

A

Use a MAC plan or very low UCR fees

52
Q

How does subcontracting with another network, such as a PPO with similar discounts, improve network performance?

A

Creates a larger network with lower costs

53
Q

How can a carrier create a “safety net” that limits out-of-network cost on all claims that go to these dentists?

A

The carrier’s in-house PPO may be supplemented by another, larger network but at a much smaller discount.

54
Q

The type of network large enough that only a small percentage of claims remain from dentists where there is no contract is known as __________

A

Managed indemnity

55
Q

True or False: For administrative services only (ASO) plans, carriers usually allow the plan sponsor to choose how out-of-network claims will be paid

A

True

56
Q

What is FAIR Health, Inc., tasked with?

A

Developing a new database of doctor and dentist fee percentiles

57
Q

How does the FAIR Health website help consumers?

A

Helps to understand what charger they might expect when they go outside of a network for dental or medical care

58
Q

True or False: Some industry professionals have expressed concern that too much information via the FAIR health website may lead to an overall increase in dentist charges.

A

True

DBA, Part B (4 decks)

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