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
