Managed Care Flashcards
Indemnity (FFS) plans:
Use FFS payment model
Most expensive plans (premiums) for employers
Most insurers used a deductible
Most insurers used co-insurance
Type of payments:
PPO
HMO
Staff model HMO
PPO
Preferred Provider Organizations
Still had deductible & co-insurance
How is a PPO different from indemnity?
Restricted network (provider panel)
Co-insurance tied to allowable, not billed amount
Lower premiums than indemnity plans
Introduced Utilization Review (UR)
What model is used in a PPO?
Discounted Fee-For-Service (DFFS) as primary payment model
PPO plan:
Secure a 20-50+% discount from providers
Goal of PPO plan:
pass along that 20-50% reduction to employers via lower premiums
Why didn’t PPO plans work to pass reduction to employers?
Providers increased their prices
Providers saw more patients (increased demand)
Providers did more procedures (increased volume)
Old PPO model:
PPO paid 80-90% of the discounted rate after deductible was met
Patient paid 10-20% of what provider billed
PPO model now:
Patient pays:
Copay (if applicable)
Co-insurance based on the allowable
PPO pays what is left to meet allowable after deductible is met
Utilization review:
Decisions made based on restrospective review of documentation
To pay or not to pay
Who performs UR?
Clerks
Nurses
Social workers
Not many PTs perform UR
How is HMO different from PPO
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
Who act as gatekeepers in a HMO?
PCPs
How are PCPs paid in a HMO?
capitated rate on a monthly basis that is not tied to how many services are provided
What does a copay serve as?
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
Withholds:
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
Who are HMOs popular with?
employers
insurers
Why would employers like HMOs?
reduced premium growth
Why would insurers like HMOs?
reduced growth in healthcare expenditures
Why do providers dislike HMOs?
Made the providers the “bad guy”
Created perverse incentives with capitation
Why would consumers like HMOs?
low premium and OOP expenses
Why would consumers dislike HMOs?
they restricted/denied access to specialists
Staff model HMO:
Insurance company owns all entities from the insurer to the providers
Provides the most control over healthcare delivery
Lowest premiums of the HMO models
Group model HMO:
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
Which is the first model to reduce health care spending?
HMO
Network HMO
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
IPA HMO
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
POS HMO:
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
When does medical cost control increase?
when employee choice decreases
HDHP = High Deductible Health Plan
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
Goal of high deductible
create financial incentive for patient to forego or put off purchasing healthcare
CDHP=Consumer Directed Health Plans
Combination of a Health Savings Account (HSA) or Medical Savings Account (MSA) and a high-deductible health plan
In HDHP and CDHP, where is the risk?
the patient
Theory behind CDHP:
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
What increased the popularity of MSA’s?
Prescription Drug Act of 2003 authorized tax-exempt, employer sponsored MSAs
