Group Health Plan Structures Flashcards
Module 3
Describe the basic features of indemnity plans
Pay a percentage of the cost of treatment (as much as 100% for emergency/preventative care and 80% for most other services) and do not require insureds to obtain permission from their physician to access specialty or diagnostic services.
Also called traditional, fee-for-services or conventional plans.
Define the concept of managed care
Insurance carriers have a role in steering health services and care while prepaying some portion of health care services.
Replaced indemnity plans.
4 types of employer-sponsored health plans (offered as a sole plan or as one of several plan options)
1) (HMO) Health Maintenance Organization
2) (PPO) Preferred Provider Organization
3) (POS) Point-of-service
4) (HDHP) High Deductible Health Plan linked to a tax-advantaged individual savings account
Explain how HMO Plans work
Requires individual to select a Primary Care Professional (PCP) from a network of providers. The PCP is responsible for managing individual’s care then refer access to specialty care.
With exception of emergency care, NO BENEFITS AVAILABLE outside HMO network.
Out-of-pocket expenses for PCP usually a copay amoutn
Explain how PPO Plans work
Allows limited benefits for care received outside of the PPO’s preferred network and requires no permission-no referral-to see a specialist.
For care received outside of the network, out-of-pocket costs can be significantly highers than those estimated by a member due to higher cost sharing rates (coinsurance rates).
Describe how POS Plans are a hybrid of HMO and PPO plans
- Offer in-network (preferred provider) benefits and out-of-network (non-preferred provider) benefits.
- Individual may need to select a PCP to obtain referrals for in-network specialty care or other services
- Out-of-pocket expenses for in-network providers are copays
- Out-of-network - out - of - pocket : not flat dollar but rather a percentage of insurer’s prevailing fees.
What is a HDHP (High Deductible Health Plan)
- Provides catastrophic insurance
- Trades lower premium costs for high deductible by paying benefits after the insured has incurred considerable out-of-pocket expenses.
- Participants have greater financial stake in health care decisions
- Sets mechanisms for participants to prudently manage expenses through health care savings accounts
3 Savings Options coupled with HDHPs
FSA - Flexible Spending Account
HRA - Health Reimbursement Account
HSA - Health Savings Account
Offered with all kinds of medical plan options by allowing individuals, before the start of the plan year, to elect a certain amount to be deducted on a pretax basis from their paycheck. The deductions may not exceed IRS limit and are then available throughout the year to pay IRS-qualified medical expense.
Restrictions on unspent money at end of year, individuals can enroll regardless of health plan insurance.
Employers can make contributions to this account
FSA (Flexible Spending Account)
HRA (Health Reimbursement Account)
Employer-funded account established to pay health care expenses as determined by the employer from the IRS-qualified listing. Employers are not required by law to roll over unused contributions from one year to another and typically do not do so.
HSA (Health Savings Accounts)
Newest tax advantaged option and are coupled with HDHPs.
Owned by the employee and funded with tax-free contributions made either by the employee, employer, or both.
Unused contributions can be rolled over from year to year. If employee changes jobs, monies are available for future use even if individual is no longer enrolled in a HDHP.
There are penalties for money used for non medical expenses before the age of 65. After 65, withdrawals made for non-medical expenses are only subject to ordinary income taxes.
Amount paid by individual during a plan year before a health insurance plan beings to pay for certain services.
Deductible
The individual member’s share of the cost of a covered health care service, calculated as a percentage of the allowed amount of the service.
Coinsurance
A fixed amount the individual pays for a covered health care service, usually when receiving this service.
Co-payment
A ____ manages the care for individuals enrolled in an ____, _____, or _____ Plan and is usually a general, family, or internal medicine doctor.
- PCP (Primary Care Physician)
- HMO (Health Maintenance Organization)
- PPO (Preferred Provider Organization)
- POS (Point of Service)
AN authorization or prior approval from a primary care provider to receive medical care from another provider, most often a specialist.
Referral
An in-network provider has a contract with the individual’s health insurance plan to provide services to the member at a _____. A provider that does not have a contract with the health insurance plan to provide services to its member is an _______ _______.
_________ care cost a member _______ more than those in _______
- Discount
- Out-of-network provider
- Out-of-network
- Considerably
- In network
The most a member pays during a plan year before the health insurance or plan begins to pay 100% of the allowed amount. This limit never includes insurance premiums paid, balance-billed charges or expenses for care services not covered by the health plan.
Out-of-pocket-expense maximum
What are the terms used by health plans to determine the maximum amount the plan will pay for covered health care services
Allowed Amount Usual, customary or reasonable (UCR) fee Eligible Expense Payment Allowance Negotiated Rate
Treatments or services that fall under the category of __________ ________ are covered under the health plan without have any _________, __________, or _________ apply when provided by __-________ providers.
- Preventative care
- Deductibles
- Co-payments
- Coinsurance
- In-Network
Third Party Administrators contracted by plan sponsors to process prescription claims and reimburse pharmacies for dispensing drugs as well as perform myriad other functions, including cost containment and disease management.
Pharmaceutical Benefit Managers (PBMs)
What has been the impact of parity legislation on Mental Health (MH) and Substance abuse (SA)
The inequities between the two types of health plans have been rolled back by a patchwork of state and federal parity and equity-in-coverage laws, culminating in the sweeping health care reform legislation of the Affordable Care Act.
Independent organizations or affiliates of health insurance carriers or health provider organizations. Key objective of the separation was to control costs through bettwe oversight or such expenses–case management and early intervention.
Managed Behavioral Health Care Organizations (MBHOs)
Key Major Reforms enacted by the ACA include:
- Expansion of eligibility under federal government’s program for low-income, financially needy individuals.
- Prohibition against denial of insurance benefitrs for physical or mental illnesses or conditions that existed before coverage began
- Restriction on variation in premium rates by insurers and tax credits/subsidies for low-income individuals purchasing individual coverage.
- Establishment of marketplace exchanges to make available standardized medical plans health care
- Group health insurance mandates having direct and indirect impact on employer-sponsored health plans
Summarize ACA requirements that impact employers sponsoring group health plans.
1) Play or pay rules
2) Establishment of “essential health benefits”
3) Elimination of lifetime maximums and the capping of out-of-pocket maximums
4) Preventative services expansion
5) Tax subsidies to small employers who offer group health
6) New admin and reporting requirements
T/F
Coverage for services such as mammograms and colonoscopies must be provided by group health plans subject to the ACA mandates without charging a deductible, copay or coinsurance.
TRUE
What are the 8 basic payment methods
Beneficiary Day Dollar of charges Dollar of cost Episode Per time period Recipient Service
Per time period
Common terms: budget and salary. For example, salaried physicians and government hospitals
Per beneficiary
Common term being capitation. For example, managed care organizations’ payment to a non-employee physician
Per receipt
Common term being contact capitation. For example, physician specialist services.
Per episode
Common terms being case rates, payment per stay, and bundled payments. For example, Medicare’s diagnosis-related groups (DRGs) and resource-based relative value scale (RBRVS)
Per day
Common terms being per diem and per visit. For example, payments for nursing facilities.
Per service
Common terms being fee for service. For example, payments for physician services, dentists, medical equipment and supplies. Separate payments are often made for multiple services per day.
Per dollar of cost
Common term being cost reimbursement. For example, payments for critical access hospitals, government-owned providers and nursing facilities. Payers typically pay a percentage of cost as allowed by the payer
Per dollar of charges
Common terms being percentage of charges. This method of payment can be used for any provider type. It is based on charges as billed by the provider.
What mechanisms are established to mitigate the financial incentives inherent in the various payments methods to safeguard quality
Utilization Review Provider profiling and credentialing Peer review Litigation and other disciplinary action Prohibitions against self-referral
