Module 3 - Spectrum of Health Plans Flashcards
(A) Definition of Indemnity Plans
The first employment based medical plans covered catastrophic losses (in patient hospital) and later added outpatient, diagnostic, and physicians services coverage.
Also called traditional or fee for service plans
No referral required for specialty or diagnostic services
Deductible is often well below $500
Replaced by the managed care medal in the 1980s in the form of HMO’s and their spin offs
(B) Health Maintenance Organization (HMO) Plans
- Lower premiums, least expensive health plan option
- Requires a physical referral
- Must designate a PCP
- Except for emergency care, no benefits are available for care received outside of the HMO network of providers
- PCP and Speciality visits are often a copayment (flat dollar amount)
- Most PCP’s who sign on with HMO carriers receive a flat monthly fee per plan per member
(C) Preferred Provider Organization (PPO) Plans
- Designed in response to HMO criticism
- No referral required to see a specialist
- Usual, Customary, or Reasonable (UCR) fee = the higher coinsurance rates for OON benefits are not calculated using the actual expense that the member incurred but the plans prevailing fee for that service
- UCR fees are developed by including data from the federal govt. for Medicare payments
- PPO plans do provide some coverage for non-preferred providers and that among other factors makes the premiums for these plans high than HMO’s.
(D) Point of Service (POS) Plans
- a hybrid of HMO and PPO plans by offering 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 specialist care of other services
- In Network benefits = copayment, no need to file claim for reimbursement
- OON benefits = %, claims must be filed
- PCP requirement by a POS plan but not a PPO plan
- POS network is smaller than PPO
- lower copays for care in POS vs. PPO
(E) High Deductible Health Plans (Consumer-Driven Health Plans)
- plan pays benefits after the insured has incurred considerable out-of-pocket expense for covered medical services
- The premise of HDHP’s is that if the enrollee has a greater financial stake in his health care decisions, he will be a better consumer of healthcare
(F) Tax Advantage Personal Savings Account
3 Main Types of Accounts
1 - FSA - in existence the longest (1970s)
2 - HRA (2000s)
3 - HSA
(G) Understanding Health Insurance Terminology
Participant / Member Deductibles Coinsurance Copayment (Copay) Primary Care Physician (PCP) Referral In-Network vs. Out-of-Network Out-of-Pocket Expenses Maximum Allowed Amount and Usual, Customary, or Reasonable (UCR) Preventive Care
Primary Care Physician (PCP) - HMO, PPO, POS plans
Allowed Amount and Usual, Customary, or Reasonable (UCR) - may be called “eligible expense”, “payment allowance”, or “negotiated rate”, applicable to determining benefits for out-of-network providers
(H1) Intro to Prescription and Mental Health Benefits
Prescription Benefits
- RX benefits represent 16% of more of the health care budget for a majority of employers and his are is not likely to decline, with the individualized drug therapies and other breakthroughs carrying huge cost hikes for RX coverage.
- Pharmaceutical Benefit Managers (PBM) are third party administrators contracted by by plan sponsors to processed RX claims and reimbursed pharmacies for dispensing drugs, as well as perform myriad other functions, including cost containment and disease management.
(H2) Intro to Prescription and Mental Health Benefits
Mental Health Benefits
- Coverage for mental health and substance abuse services cannot be more restrictive than coverage for physical health coverage
- Focus is now on Managed Behavioral Health Care Organizations (MBHOs) which are independent organizations or affiliates of health insurance carriers or health providers organizations.
- MBHO’s became popular in the 1980s as group health plans carved out mental and surgical coverage if benefits were linked to mental health or substance abuse services
- A key objective of separation was to control costs through better oversight of such expenses - case management and early intervention
- Provisions of the ACA and its emphasis on coordinated care may possibly discourage greater reliance and investment in MBHOs.
(G) Impact of the Patient Protection and Affordable Care Act on Employer Group Health Plans (2010)
- Expansion of Eligibility for medical benefits under the federal govt. program for low-income, financially needy individuals
- prohibition against dental of insurance benefits for physical or mental illnesses or conditions that existed before coverage began (pre-existing conditions)
- restrictions on variations in premium rates by insurers
- tax credits / subsidies for low income individuals purchasing individual coverage
- establishment of marketplace exchanges to make available standardized medical plans health care
(G) Impact of the Patient Protection and Affordable Care Act on Employer Group Health Plans (2010)
Reforms have direct and indirect impact on employer sponsored health plans
- Play or Pay Rules requiring medium and large employer to offer health coverage to ACA defined full time employees or pay a penalty
- listing of essential health benefits
- elimination of lifetime maximums and capping of the OOP maximum
- requirements that new plans cover certain preventive services
- temporary tax subsidies
- new administrative and reporting requirements
(H) The 8 Basic Payment Methods in Health Care
1 - Per Time Period = Budget & Salary
2 - Per Beneficiary = Capitation
3 - Per Recipient = Contact Capitation
4 - Per Episode = Case Rates, payment per stay, and bundled payments (marks the line between epidemiological risk (prevalence of medical conditions) and performance risk (treatment of medical conditions))
5 - Per Day = per diem and per visit
6 - Per Service = fee for service
7 - Per Dollar of Cost =cost reimbursement
8 - Per Dollar of Charges = percentage of charges
as you move from 1 to 8, finical risk increasing for payers and decreasing for providers
(H) The 8 Basic Payment Methods in Health Care
Current Initiatives - 4 Basic Questions
1 - as more payments are based on capitation and episodes, will providers avoid costly patients?
2 - will an overabundance of uncoordinated reforms create a muddle fo incentives?
3 - will providers rebel against the administrative burden and clinical oversight inherent in many initiatives?
4 - will provider mergers subvert efforts to control health care spending?
