Managed Care Flashcards
Traditional fee for service health insurance is also referred to as what?
indemnity insurance
What does indemnity/conventional plans allow for?
The insured to obtain health care services anywhere and from any physician or hospital
Are indemnity (FFS) plans expensive for employers?
Yes, the most expensive
What does the patient typically pay for in a traditional indemnity plan?
10-20% of what the provider billed plus their deductible
What are the 3 main types of managed care arrangements?
- HMO
- PPO
- POS
What does PPO stand for?
Preferred Provider Organization
Describe how a PPO works
The PPO establishes contracts with a select group of physicians and hospitals that are “preferred”. The PPOs make discounted fee arrangements with providers and cost sharing tends to be higher for out-of-network providers
PPOs make what kind of fee arrangements with providers?
discounted fee for service (DFFS)
PPOs introduced the utilization review. What is this?
The process of evaluating the appropriateness of services provided through retrospective review of documentation
PPOs have _____ premiums than traditional indemnity plans, however they are ____ expensive than HMOs
lower
more
PPOs provide a 20-50% discount from providers, what is then done with this money ideally?
It is passed along to the employers via lower premiums
Why didn’t PPOs result in lower premiums?
- Providers increased their prices
- Providers saw more patients (increased demand)
- Providers did more procedures (increased volume)
Describe how the old PPOs worked
The PPO paid 80-90% of the discounted rate after the deductible was met. And the patient paid 10-20% of what provider billed.
Describe how PPOs work now
The patient pays their copay and the co-insurance on the allowable amount. The PPO then pays what is left to meet the allowable after the deductible is met.
What does HMO stand for?
Health Maintenance Organization
Describe how a HMO works
The enrollee is required to choose a PCP that delivers services in accordance with the gatekeeping model
Are PPO or HMO provider networks smaller and more restricted?
HMO
How are providers paid under a HMO?
capitation
True or False
Part of the capitation the provider receives can be withheld. Explain why or why not.
True
Part of the PMPM (per member per month) payment can be withheld depending on the achievement of goals
What happens to the withholdings if goals are not met?
The HMO keeps the money
What does the patient pay in a HMO?
copays before services are provided
What is the significance of paying the copay up front?
It is their way of trying to deter patients from receiving care since the payment occurs on the front end
Are HMOs popular with employers or insurers? Explain why…
BOTH
Popular with employers because of reduced premium growth
Popular with insures due to reduced growth in healthcare expenditures
Explain why HMOs are both loved and hated by consumers
- Loved because of low premium and OOP expenses
- Hated because they restricted/denied access to specialists
What are the 4 common HMO models?
- staff
- group
- network
- independent practice association (IPA)
Describe a staff model HMO
It employs its own salaried physicians. They must employ physicians in all the common specialties to provide for the health care needs of their members. They can also subcontract for infrequently needed services.
What are 2 advantages to the staff model HMO?
They can exercise a greater degree of control over the practice patterns of their physicians.
They also offer the lowest premiums of the HMO models.
What are the disadvantages to staff model HMO?
The fixed-salary expense can be high, requiring HMOs to have a large number of enrollees to support operating expenses.
Describe a group model HMO
This type of HMO contracts with a single multispecialty group practice and contracts separately with one or more hospitals to provide comprehensive services to its members.
Who employs the physicians of a group model HMO?
the group practice - not the HMO.
The HMO pays an all-inclusive capitation fee to the group practice to provide physician services to its members
What are 2 disadvantages to a group model HMO?
- because they are often contracted with large groups if the contract is lost they will have a hard time meeting their service obligations to the enrollees
- premiums are also higher than in a staff model HMO
Describe a network HMO
The HMO contracts with more than one medical group practice.
How is each group in a network HMO paid?
Each group is paid a capitation fee based on the number of enrollees
1 advantage the network HMO has over the group HMO and 1 disadvantage.
Advantage: wider choice of physicians
Disadvantage: higher premiums
Describe an IPA (independent practice association) HMO
The IPA is its own legal entity separate from the HMO. The IPA contracts out various physicians and the HMO contracts with IPA to provide services to its members
Who is paid what in an IPA model?
The HMO pays a capitation amount to the IPA. They then decide how they want to reimburse their physicians.
1 advantage the IPA model has over the network HMO and 1 disadvantage.
Advantage: wider choice of physicians
Disadvantage: higher premiums
What does POS stand for?
point of service
POS HMOs are hybrid plans that allow for what?
Patients to seek care outside of the HMO physician/hospital network while still retaining the benefits of tight utilization reviews found in HMOs
What is the recent trend in managed care?
Consumer Directed Health Plans (CDHP)
What is a CDHP?
A combination of a health savings account (HSA) and a high-deductible health plan
Where is the risk placed in a CDHP?
the patient
When does insurance kick in with a CDHP?
After the HSA has been used up and the deductible has been met
What is the advantage of using a CDHP?
lower premiums
In summary the risk in a fee for service plan is on who?
Managed care?
CDHP?
Insurer
Provider
Patient
