Lecture 9 Flashcards
MCO
Managed care organizations
-assume (some) financial risk for expenditures
and have incentives to control costs and utilization of health services
Ex: Kaiser Permanente
Health Maintenance Organization Act of 1973
required employers with more than 25 employees that offered a health plan to also offer an HMO-type alternative to an indemnity plan
Capitation
Pays providers on a pre-determined basis
- If the providers can treat the patient for less: they can keep the rest of the $$$
- If the providers cannot treat the patient for less: they must absorb the costs $$$
is a fixed amount of money per patient per unit of time paid in advance to the physician for the delivery of health care services
Risk is
the chances for financial losses
Who’s at risk for fee-for service
Full risk for Insurer for MD and hospital
Full Capitation
Providers are paid a predicted cost of care for a given population for a specified time (1 yr).
- Obligated to provide all needed care for that population
Risk pools
- A portion of payment (a “withhold”) placed in a pool to cover claims that exceed projections
- Physician and HMO share any surplus or loss at end of year
Gatekeeper
A primary-care physician must coordinate & authorize all medical services to be covered
- Financially at risk so as to minimize unnecessary services
Network
HMO’s generally do not provide coverage for care that is received out of network
Four Types of HMOs
- Staff-Model
- Group-model
- Network-model
- Independent practice association (IPA) model
Staff-Model
HMO directly owns all facilities and providers are employees.
• Physicians bear no direct risk, but salaries based on company performance
- subject to utilization review; therefore may influence care
Group-model
HMO contracts with large, multi-specialty medical groups offering services exclusively to the HMO.
- Capitated
Network-model
Nonexclusive contracts with large medical groups.
- Physicians bear risk, but reduced influence by HMO
Independent practice association (IPA) model
Physicians form a separate legal entity that contracts with MCO;
- the IPA shares risk with MCO.
- IPA contracts with physicians on a discounted FFS basis.
- Contracted physicians usually have their own practices and can provide services to other patients and other MCOs
Characteristics that Differentiate MCO Types:
Health Maintenance Organization
Physicians are hired
No Out-of-Network Care
Primary Care Physician
Characteristics that Differentiate MCO Types:
Preferred Provide Organization
Physicians are contracted
Out-Of-Network care
Characteristics that Differentiate MCO Types:
Exclusive Provider Organization
Physicians are contracted
No Out-of-Network care
Characteristics that Differentiate MCO Types:
Point-of-Service
Physicians are contracted
Out-of-Network Care
Primary care physicians
Whats the differnce between FFS plans and Managed care
The use of provider networks
Provider network
is a group of providers contracted to supply a full range of primary and acute health care services (and share risk
Four characteristics that differentiate types of MCOs
- Risk-bearing
- Physician type
- Relationship exclusivity
- Out-of-network coverage
Risk-bearing
the amount of risk borne by the provider, which can range
from full risk to no risk.
Physician type is the
relationship between the MCO and the physician(s)
Relationship exclusivity
whether the physician provides care to patients
from one MCO only or to patients from multiple MCOs
Out-of-network coverage
whether care received from a provider who is not in the MCO’s network is a covered benefit
What is Preferred Provider Organizations (PPOs)
-Type of Managed Care Organization
PPOs are providers that seek contracts with insurance plans.
A plan that offers referral-free access with benefits of single-carrier administration
Exclusive Provider Organizations (EPOs)
are a form of a PPO that strictly limits participation among providers.
- Type of Managed Care Organization (PPOs)
Hybrid plans
Combine two or more organizational models
- Point-of-service plan – patients select a provider at the time a service is needed rather than upon joining the plan.
- Patient accepts different coverage for in-network and out-of-network providers.
- Providers may accept different levels of financial risk
- Becoming more prevalent
PPO Characteristics
- Nonexclusive arrangements
- Individuals are free to see any provider, but have a financial incentive to see those within the preferred network.
- Providers accept a discounted FFS rather than capitation.
- Providers bear no direct risk, but, along with the discounts, are subject to utilization management & review to control costs
Differences in Managed Care structures: HMO Plan
- Use of only in-network is permitted
- Providers on staff and/or contracted providers
- use of gatekeeping
- Focus on prevention and primary care
- Specialty services are obtained upon referral
- Providers are paid mostly under capitation
- Some fee for service
- Risk sharing with providers under capitation
Differences in Managed Care structures: PPO Plan
- Use of both in-network and out-of-network providers is permitted
- Contacted providers only
- No gate keeping
- Unrestricted use of specialty services
- Providers are paid according to discounted fee schedules
- No risk sharing
Differences in Managed Care structures: POS Plan
- Use of both in-network and out-of-network providers is permitted
- Contracted providers/physicians only
- Unrestricted use of specialty services
- Combination of capitation and fee for service
- Some risk sharing
HMO Plan
A plan that covers care provided by in-network physicians, with predictable copays and out-of-pocket maximums
Lower out of pocket costs for employees
Deductible HMO plan
An HMO plan that shares costs between the employer and employees, and offers lower premiums
POS plan
A plan that offers point-of-service (POS) care, with the option of choosing physicians and services from an external provider network
Pro-MCO position
- FFS provide financial incentives for overtreatment.
- Ethics of medicine are not necessarily superior to those of business; plus, medicine is also a business.
- Physicians rarely have complete autonomy, which subsumes patient rights.
- Patients have limits under FFS as well; MCO market has adapted to add choice.
Anti-MCO position
- Financial incentives undermine the physician’s role as advocate and patient trust.
- Ethics of medicine is replaced by ethics of business.
- Loss of physician autonomy.
- Limits patient choice.
Three major accrediting agencies
- National Committee for Quality Assurance (NCQA)
- Utilization Review Accreditation Commission (URAC)
- Joint Commission for the Accreditation of Healthcare Organizations (JCAHO)
NCQA
National Committee for Quality Assurance
URAC
Utilization Review Accreditation Commission
JCAHO
Joint Commission on Accreditation of Healthcare Organizations
National Committee for Quality Assurance (NCQA). What is it?
Main agency for HMOs; submit to accreditation more than any other type of MCO; accredits PPOs as well.
Health Plan Employer Data and Information Set
(HEDIS) provides plan -sponsors a set of objective measures with which to evaluate MCOs
Utilization Review Accreditation Commission(URAC)
Main agency for PPOs; accredits HMOs as well.
Detailed process with both on- and off-site components.
