Managed Care

Question 1

Indemnity (FFS) plans:

Answer 1

Use FFS payment model
Most expensive plans (premiums) for employers
Most insurers used a deductible
Most insurers used co-insurance

Question 2

Type of payments:

Answer 2

PPO
HMO
Staff model HMO

Question 3

PPO

Answer 3

Preferred Provider Organizations

Still had deductible & co-insurance

Question 4

How is a PPO different from indemnity?

Answer 4

Restricted network (provider panel)
Co-insurance tied to allowable, not billed amount
Lower premiums than indemnity plans
Introduced Utilization Review (UR)

Question 5

What model is used in a PPO?

Answer 5

Discounted Fee-For-Service (DFFS) as primary payment model

Question 6

PPO plan:

Answer 6

Secure a 20-50+% discount from providers

Question 7

Goal of PPO plan:

Answer 7

pass along that 20-50% reduction to employers via lower premiums

Question 8

Why didn’t PPO plans work to pass reduction to employers?

Answer 8

Providers increased their prices
Providers saw more patients (increased demand)
Providers did more procedures (increased volume)

Question 9

Old PPO model:

Answer 9

PPO paid 80-90% of the discounted rate after deductible was met
Patient paid 10-20% of what provider billed

Question 10

PPO model now:

Answer 10

Patient pays:
Copay (if applicable)
Co-insurance based on the allowable
PPO pays what is left to meet allowable after deductible is met

Question 11

Utilization review:

Answer 11

Decisions made based on restrospective review of documentation
To pay or not to pay

Question 12

Who performs UR?

Answer 12

Clerks
Nurses
Social workers
Not many PTs perform UR

Question 13

How is HMO different from PPO

Answer 13

Smaller, more restricted, provider network than PPOs
Gatekeeper role for primary care physicians
Capitation for primary care physicians
Withholds
Copays by patients BEFORE services
No deductibles
Pre-authorization by insurer and/or PCP for non-PCP services
Transfer of risk to providers, primarily PCPs

Question 14

Who act as gatekeepers in a HMO?

Answer 14

PCPs

Question 15

How are PCPs paid in a HMO?

Answer 15

capitated rate on a monthly basis that is not tied to how many services are provided

Question 16

What does a copay serve as?

Answer 16

A copay serves as a disincentive for the patient to receive healthcare services since they have to pay it up front versus 2-4 months after the service is provided

Question 17

Withholds:

Answer 17

part of PMPM payment not given to PCP depending on goals
Withholds are returned to the PCP(s) only if those goals are met.

If goals are NOT met, then HMO keeps the withhold money

Question 18

Who are HMOs popular with?

Answer 18

employers

insurers

Question 19

Why would employers like HMOs?

Answer 19

reduced premium growth

Question 20

Why would insurers like HMOs?

Answer 20

reduced growth in healthcare expenditures

Question 21

Why do providers dislike HMOs?

Answer 21

Made the providers the “bad guy”

Created perverse incentives with capitation

Question 22

Why would consumers like HMOs?

Answer 22

low premium and OOP expenses

Question 23

Why would consumers dislike HMOs?

Answer 23

they restricted/denied access to specialists

Question 24

Staff model HMO:

Answer 24

Insurance company owns all entities from the insurer to the providers
Provides the most control over healthcare delivery
Lowest premiums of the HMO models

Question 25

Group model HMO:

Answer 25

HMO contracts with one large multi-specialty physician group for all of their patients
Physicians do not work for the HMO
Can see patients from other insurers
Premiums higher than staff model

Question 26

Which is the first model to reduce health care spending?

Answer 26

HMO

Question 27

Network HMO

Answer 27

HMO contracts with numerous physician providers
Physicians do not work for the HMO
Physicians can see patients from other insurers
Premiums higher than group model

Question 28

IPA HMO

Answer 28

Independent Practitioner Association (IPA)
Physician practices contract with IPA who then contracts with HMO
Physicians not limited to IPA/HMO patients
Introduces middle man (IPA) that wants cut of premiums
Premiums higher than network HMO

Question 29

POS HMO:

Answer 29

Point of Service
Allows patients to seek care outside of the HMO physician/hospital network
However, patient’s pay higher co-pays and co-insurance for going out of network

Question 30

When does medical cost control increase?

Answer 30

when employee choice decreases

Question 31

HDHP = High Deductible Health Plan

Answer 31

High deductible tied, usually, to a PPO
E.g., $5,000 deductible or higher
Can be as high as $10,000 or higher
80%/20% PPO

Question 32

Goal of high deductible

Answer 32

create financial incentive for patient to forego or put off purchasing healthcare

Question 33

CDHP=Consumer Directed Health Plans

Answer 33

Combination of a Health Savings Account (HSA) or Medical Savings Account (MSA) and a high-deductible health plan

Question 34

In HDHP and CDHP, where is the risk?

Answer 34

the patient

Question 35

Theory behind CDHP:

Answer 35

that patients will then become price sensitive since they are, in essence, spending their own money (from their MSA account).
Shop for healthcare based on price

Question 36

What increased the popularity of MSA’s?

Answer 36

Prescription Drug Act of 2003 authorized tax-exempt, employer sponsored MSAs