Module 4 Flashcards
When a managed care organization contracts with an exclusive set of providers based on quality or cost-effectiveness.
Selective Contracting
When hospitals spent more on amenities and technology, driving up prices. Hospitals were reimbursed what they spent then.
Medical Arms Race
This type of network gives more negotiating clout to the insurer.
Narrow Networks
In addition to variations in “full billed charges”, this makes it difficult to determine the price concessions managed care plans negotiate with hospitals.
Opaqueness of hospital discounts
The type of plan where volume, not value, is rewarded.
Indemnity/fee-for-services plans
Payment based on the number of covered lives a medical group is responsible for providing care for.
Capitation
A physician/medical group is paid a fee for service up to a certain %. The rest is paid if the managed care plan can cover its overall claim costs.
Withholds
This sets a maximum on how much an insurer will pay for the procedure.
Reference Pricing
If a patient chooses a value-based facility, there may be significantly lower out-of-pocket costs.
Center-of-Excellence Pricing
When there are empty beds in a hospital. The facility is willing to offer a lower price to fill some empty beds and contribute to fixed costs.
Excess Capacity
All of the following are true of physician compensation agreements, EXCEPT:
A. Salary agreements provide a link between quality and quantity of the care.
B. In indemnity plans (also called fee-for-service plans) volume, not value, is rewarded.
C. With capitation, payment is based on the number of
covered lives for which providers are responsible.
D. Paying Lower prices to providers of value that participate in selective contracting is financially good.
E. Rewarding carriers for favorable selection by paying them a flat rate that doesn’t reflect a healthier group isn’t something many plan sponsors desire to do.
A - salary arrangements don’t link quality and quantity of the care.
Page 103
Managed care organizations contract with an exclusive set of providers based on quality or cost-effective practice patterns as part of:
A. The medical arms race
B. Selective contracting
C. Indemnity payments
D. Fee-for-service payments
E. An antiquated method of payment philosophy
B - Selective Contracting
Page 92
All of the following are true about the relationship between prices and plan behavior in selective contracting EXCEPT:
A. An insurer obtains a lower price when it has a larger share of a hospital’s book of business.
B. An insurer is able to get a lower price when a hospital has a lower occupancy rate.
C. An insurer can negotiate lower hospital prices when there are fewer hospitals in the local market.
D. An insurer obtains a lower price when the hospital has little bargaining power.
C - an insurer can negotiate lower hospital prices when there are fewer hospitals in the local market.
Pages 93 - 94
In the pre-managed care era, hospitals competed in all the following ways EXCEPT:
A. Providing more amenities
B. Providing more services
C. On the basis of quality
D. On the basis of price
D - On the basis of price
Pages 91 - 92
What are the two distinguishing characteristics of managed care as a result of favorable selection and selective contracting?
A. Lower utilization experience and lower prices
B. The same utilization experience and lower prices
C. Higher utilization experience and lower prices
D. Higher utilization experience and higher prices
A - Lower utilization experience and lower prices.
Pages 100 - 101
What is reference pricing?
A. The usual and customary charge in an area.
B. When an insurer negotiates prices with providers, but then sets a maximum on how much it will pay for the procedure.
C. The basis for center-of-excellence pricing.
D. When an insurer negotiates prices with providers, but then sets a minimum floor it will exceed to pay for the procedure.
B - When an insurer negotiates prices with providers, but then sets a maximum on how much it will pay for the procedure.
Pages 105 - 106
No primary care provider (gatekeeper) is required; it has network and non-network payment schedules.
PPO
Page 96
This type of plan is not a managed care design.
Indemnity Plan
Page 96
In general, no non-network benefits are payable in this type of plan.
HMO
Page 96
A non-network payment schedule is available in this type of plan. Historically, it had a gatekeeper.
POS
Page 96 - 98
This is when an insurer sets a maximum it will pay for a procedure.
Reference Pricing
Pages 105 - 106
When an insurer provides an incentive to the consumer to use a value-based option.
A center-of-excellence
Page 106
When insurers drive patient volume, resulting in lower negotiated prices.
Channeling
Page 106
Part of the provider’s payment is paid only if the managed care plan covers other costs or certain criteria are met.
Withhold
Page103 - 104
When the provider receives a flat monthly fee for service paid on the basis of the number of lives for which they are responsible.
Capitation
Page 103
The concern that it’s difficult to determine net price before a procedure.
Opaqueness of hospital discounts
Pages 96 - 97
In this era, hospitals were paid what they spent.
Medical Arms Race
Page 92
When only certain providers get contracts with a provider. Providers exchange patient volume for lower prices.
Selective Contracting
Pages 100 - 101
