Exam 1 review Lecture 1-2

Question 1

Healthsystem stakeholders: The Five P’s:

Answer 1

• patients
• purchasers
• payors
• providers
• pharmaceutical manufacturers and othe suppliers

Question 2

Examples of Purchasers

Answer 2

• government
• employers
• consumers

Question 3

Examples of Payers

Answer 3

• health insurerers(Medicare,Medicaid)

Question 4

Examples of providers

Answer 4

• physicians
• pharmacists
• hospitals

Question 5

Health policy

Answer 5

• a set of decisions or commitments to pursue courses of action aimed at achieving defined goals of improving health
• values of stakeholder organization
• policies should specify the source of funding that can be applied to planning and implementation of policy and to relevant institutions involved in the process

Question 6

Total National health expenditures

Answer 6

• Hospitals = 31%
• Other health = 27%
• Physicians and clinics = 20%
• Rx drugs = 8%

Question 7

Charge

Answer 7

• what the provider charges for the medical product or service (or prescription drug, as is the case for pharmacies)

Question 8

cost

Answer 8

• what the product or service actually costs the provider

Question 9

Reimbursement

Answer 9

• what the provider gets paid for the product or service
• comes from health plan and patient (through their co-payment or deductible)
• typically negotiated with a health plan
• should be higher than cost but is typically much lower than charges

Question 10

Payment mechanisms for hospitals

Answer 10

• fee-for-service (FFS)
• discounted FFS
• diagnosed related group (DRG) = case rate
• per diem payments
• Accountable Care organization (ACO)/capitation or bundled payments

Question 11

Per Diem (Per Day) Payments

Answer 11

• hospitals gets one fixed payment for each day in the hospital
• may differ for different units:
  = routine patient day
  = ICU
  = telemetry/step-down unit
  = observation
  = rehabilitation
  = Etc.

Question 12

Fee-For-service

Answer 12

• do more, keep longer

Question 13

DRG (case rate)

Answer 13

• do less, keep shorter

Question 14

Per Diem

Answer 14

• do less, keep longer

Question 15

Payment for mechanisms for outpatient physician care

Answer 15

• FFS
  = private insurance plans: UCR (Usual, Customary, Reasonable)
  = Health plans typically negotiate with providers to get a discounted UCR
  = Medicare: Medicare RBRVS (Resource Based Relative Value Scale)
• Capitation (typically used for primary care)
• Case rates/episode of illness payments/bundled payments

Question 16

How does Medicare for Outpatient Services: RBRVS?

Answer 16

• pay physicians for services based on submission of a claim using one or more specific CPT codes
• each CPT code has Relative Value Unit (RVU) assigned to it which, when multiplied by the cost conversion factor (CF) and a geographical adjustment (GCPI) factors, creates the compensation level for a particular service
• moving toward Value-based payment– MACRA and MIPS

Question 17

Medicare Geographical Adjustment (GCPI) Factors

Answer 17

• provide work RVU
• Practice Expense RVU
• Malpractice RVU

Question 18

Provider work RVU

Answer 18

• the relative level of time, skill, training and intensity to provide a given service

Question 19

Practice expense RVU

Answer 19

• component addresses the costs of maintaining a practice including rent, equipment, supplies and non-physician staff costs

Question 20

Malpractice RVU

Answer 20

• are generally the smallest component of the RVU values and represent payment for the professional liability expenses

Question 21

The changing face of physician payment under Medicare: MACRA

Answer 21

• Medical Access and CHIP Reauthorization Act of 2015
• Moves toward “value” from “volume”
• 2 main pathways for physician payment:
  1) Alternative payment models (APM’s) (such as case rates)
  2) Merit-based incentive payment system (MIPS) — payment adjusted based on quality and value

Question 22

how do other plans (non-Medicare) pay physicians?

Answer 22

• similarly use a fee schedule that has been negotiated or presented to the provider
• fee schedule may be based on the Medicare fee schedule (ex: Medicare +5%, Medicare +10%)
• providers may be offered additional incentive payments for quality, heath IT (EMR) system, extended hours, e-mail, or other services
• primary care providers may be paid capitation (fixed payment per head in the patient panel, per month, demographically adjusted)
• some providers MAY be paid case rates rather than FFS for specific service episodes