Objective 2 - Health Plan Functions

Question 1

Channels for accessing the health insurance market

Answer 1

1. Employer-sponsored - sales and marketing primarily tries to influence the employer and distribution channel partners, such as brokers and consultants. The relationship with the consumer is typically indirect.
2. Individual - closer relationship with the consumer. Sales and marketing focuses on the consumer and distribution channel partners.

Question 2

Functions performed by health plan marketing organizations

Answer 2

1. Brand management - the plan must clarify its market position and differentiators. Advertising or consulting firms are often used.
2. External communications - including public relations and ensuring communications are consistent with the brand
3. Advertising - marketing must set advertising strategy and provide oversight to the work of advertising firms
4. Market research - includes providing competitive intelligence and surveying employers, distribution partners, members, and providers
5. Lead generation - as research uncovers opportunities, provide leads to sales
6. Sales campaign support - particularly around presentations and customer messaging

Question 3

Challenges to effective health plan marketing

Answer 3

1. Marketing is severely limited by a lack of customer insight
2. Health plans have historically limited investment in marketing, which has led to gaps in human capital and technology assets
3. ACA medical loss ratio requirements may restrain investments in marketing
4. An employee’s purchasing decision may be complex and has many potential influences

Question 4

Examples of high-performance health plan marketing

Answer 4

1. Measuring brand value - surveys to validate brand strategy and measure effectiveness of campaigns
2. Marketing portfolio optimization - applying a more scientific approach to the mix of marketing activities
3. Customer segmentation - including use of life stage information and behavioral segmentation
4. Targeted marketing campaigns - to support specific objectives (e.g., developing intelligence on favorable consumer segments for consumer-directed products)

Question 5

Essential health benefits that must be covered by ACA qualified plans

Answer 5

1. Ambulatory patient services
2. Emergency services
3. Hospitalization
4. Maternity and newborn care
5. Pediatric services
6. Preventive and wellness services
7. Prescription drugs
8. Laboratory services
9. Mental health and substance use disorder services
10. Chronic disease management
11. Rehabilitative services and devices

Question 6

Enrollment information needed for setting up employee records

Answer 6

1. Demographic information, such as name, address, contact information, date of birth, and gender
2. Which employment subgroup the employee belongs to
3. The benefit plan applicable to the employee
4. The provider network associated with teh employee’s benefit plan
5. Effective date of coverage
6. Dependent demographic information
7. For HMO coverages, primary care physician selection
8. Any other coverage the employee has (to support coordination of benefits)

Question 7

Problems that result from errors in the enrollment process

Answer 7

1. Paying claims on someone who is no longer covered or not yet eligible for coverage
2. Not paying claims for someone who is covered
3. Incorrect premium payments to the payer, requiring later reconciliation
4. Improper calculation of capitation payments
5. The need to make after-the-fact adjustments with providers

Question 8

Information included on the member’s ID card

Answer 8

1. Demographic information
2. Names of the subscriber and dependents
3. The group and policy number
4. Cost-sharing information
5. Pharmacy information (such as separate cost sharing and the name of the pharmacy benefit manager)
6. Provider network, if applicable
7. Name of the member’s primary care physician, if applicable
8. Plan contact information for customer service
9. Additional phone numbers, such as for behavioral health services or nurse advice lines

Question 9

Billing and payment for employer-sponsored groups and individual coverage

Answer 9

1. Employer-sponsored groups - refers to the payer billing the employer
   a. Billing is in advance of the period and his highly automated
   b. Enrollment and billing must be regularly reconciled through self-billing (the employer adjusts the invoice for enrollment changes) or retroactive billing (adjustments are made in the next month’s bill)
2. Individual coverage - payments via EFT or credit card and billing is electronic or paper

Question 10

Eligibility requirements for Medicare Advantage (MA) plans

Answer 10

1. Entitled to Part A and enrolled in Part B
2. Does not have end-stage renal disease
3. Permanently resides in the service area of the MA plan
4. Agrees to abide by the rules of the MA plan
5. Makes a valid enrollment request during an enrollment period
6. If requesting enrollment in a Special Needs Plan (SNP), must meet the additional requirements for the SNP

Question 11

Situations that result in disenrollment from MA plans

Answer 11

The MA plan must disenroll a member in the following situations:
1. A change in residence that makes the member no longer eligible to be served by the plan
2. Loss of entitlement to Parts A and B
3. In the case of a SNP, the member no longer meets the requirements for participation
4. Death of the member
5. The MA plan no longer serving the area where the member resides
The plan may, but is not required to, disenroll members for the following reasons:
1. Failure to pay premiums on a timely basis
2. Disruptive behavior
3. Fraud committed in the enrollment request or allowing improper use of the identification card

Question 12

Mandatory “categorically needy” groups for Medicaid eligibility

Answer 12

These groups must be given Medicaid coverage

1. Limited-income families with children who meet requirements in the state’s Aid to Families with Dependent Children plan
2. Supplemental Security Income (SSI) recipients
3. Infants up to age 1 born to Medicaid-eligible pregnant women
4. Children under age 6 and pregnant women whose family income is at or below 133% of the federal poverty level (FPL)
5. Children under age 19 in families with income at or below the FPL
6. Recipients of adoption or foster care assistance
7. Certain people with Medicare
8. Special protected groups who may keep Medicaid for a period of time, such as those who lose SSI payments due to earnings from work or increased Social Security benefits

Question 13

Optional “categorically needy” groups for Medicaid eligibility

Answer 13

States can choose whether to provide Medicaid coverage to these groups

1. Infants up to age 1 and pregnant women not covered under the mandatory rules whose family income is below 185% of FPL
2. Optional targeted low-income children
3. Certain ages, blind, or disabled adults who have incomes above those requiring mandatory coverage, but below the FPL
4. Children under age 21 who meet income and resources requirements for the Temporary Assistance for Needy Families (TANF) program, but who otherwise are not eligible for TANF assistance
5. Institutionalized individuals with limited income and resources
6. Persons who would be eligible if institutionalized, but are receiving care under home and community-based services waivers
7. Recipients of state supplementary payments
8. Tuberculosis-infected persons who would be financially eligible for Medicaid at the SSI level
9. Low-income uninsured women who are in need of treatment for breast or cervical cancer

Question 14

Medicaid business processes

Answer 14

1. Member management - includes eligibility determination, enrollment, member information management, and prospective and current member support
2. Provider management - includes provider enrollment, provider information management, and provider support
3. Contractor management - includes health services contracting, administrative contracting, contractor information management, and contractor support
4. Operations management - includes payment management, cost recoveries, and service authorization
5. Program management
6. Care management
7. Program integrity management
8. Relationship management

Question 15

Operational functions performed by the modern claims capability

Answer 15

The claims capability (or claims function) is the set of operational functions that process claims from receipt to issuance of payment and/or explanation of benefits (EOB)

1. Receipt of electronically submitted claims through electronic data interchange (EDI)
2. Receipt of paper claims
3. Initial auto adjudication
4. Second attempt at auto adjudication following resolution of certain suspension edits
5. Manual processing for claims that cannot be auto adjudicated
6. Check-writing process
7. Issuance of EOB and/or remittance advice
8. Completing appropriate prepayment and postpayment analytics
9. Archiving claims records and data

Question 16

Core competencies of the claims function

Answer 16

1. Transactional processing (the primary competency) - the handling and adjudication of health care claims. Requires business processes that govern policies and procedures for:
   a. Initially handling submitted claims
   b. Adjudicating claims for payment or denial
   c. Resolving suspended claims
   d. Administering other party liability (OPL) programs
   e. Reopening claims due to errors or appeals
2. Quality control - focuses on the functions and processes of the claims function, including customer service and appeals. Includes testing upstream files to find errors before claims are processed. Also includes audits and retraining after claims are processed.
3. Service delivery to both internal and external customers - must decide whether to place customer call centers in the claims area (which allows adjudicators to more quickly adjust errors and resolve suspended claims) or outside the claims area (staffed by people who can answer non-claims questions as well)
4. Information management and analysis - collection and management of data fundamental to the payer and its customers. Claims data analysis (often done by an informatics function) provides customer insights that are critical to managing the business.

Question 17

Tools needed for processing transactions

Answer 17

1. An advanced software application designed to record data and adjudicate claims according to predetermined rules
2. Scanning solutions for paper claims
3. Applications that enable electronic claims submissions
4. Special databases to support the management of products, benefit plans, and provider contracts

Question 18

People needed for processing claims transactions

Answer 18

1. Technically-proficient personnel who support EDI transmissions
2. Clerical personnel who initially prep paper claims
3. Claims processors who adjudicate claims and make adjustments
4. Supervisors and managers who interpret policies and run daily operations
5. Specialized staff who support analytics, reporting, and continuous process improvements
6. Directors and vice presidents who strategically manage investments in claims capability and hire key talent

Question 19

Enterprise objectives related to the claims capability

Answer 19

1. Enabling the payer to meet contractual obligations to employer groups, government agencies, members, and providers
2. Ensuring timely and accurate benefits administration for enrolled members
3. Improving the health care of its members through care management plans
4. Administering medical management policies and medical necessity decisions
5. Providing prompt and accurate customer service to members, brokers, employer groups, and providers
6. Protecting financial liability by validating eligibility, avoiding inappropriate claims, ensuring accurate processing, pursuing cost-containment activities, and ensuring timely payment of claims to avoid processing penalties and interest payments
7. Delivering on its mission in a manner that contributes to efficient use of the health care dollar

Question 20

Required attributes of claims policies and procedures

Answer 20

1. Written - should identify who does what, when, and how it is measured or verified. Should also show a history of changes.
2. Thorough - should account for every step in a process
3. Cross-functional - procedures that cross departmental lines should be developed with other departments so that each department’s procedures are clearly defined
4. Current - claims personnel must feel confident that the policies and procedures are up to date, or else they will not refer to them
5. Accessible - most payers use intranets or knowledge management tools to make searching for applicable policies and procedures more efficient
6. Consistent with external information - should correspond with information in marketing materials, member handbooks, provider guides, and on the payer’s website
7. Shared with partners - to ensure consistent and accurate claims processing outcomes

Question 21

Claim intake metrics

Answer 21

1. Inventory receipts must be measured in order to allocate adequate resources
2. Other critical measures that should be tracked include: timely filing limits, turnaround time from when the claim was received, “claims lag” (time from date of service to date of receipt), IBNR - rendered but unreported services due to delays in service providers’ submissions
3. Turnaround time is the most important of these measures because provider contracts or government regulations may set turnaround time limits. Exceeding these limits leads to customer service problems and may result in interest and penalty payments to providers

Question 22

Business steps for processing claims

Answer 22

1. Determination of eligibility and liability - must verify the coverage dates to determine if the member was eligible on the dates of service. Also must determine cost sharing and provider contract terms.
2. Identification of other party liability - determine whether other insurance plans are liable or other individuals are responsible for illness or injury related to specific expenses
3. Benefits administration - applying the appropriate schedule of benefits during the claims adjudication process. Requires configuring (coding) all benefits into the system used for auto adjudication.
4. Application of provider fee schedules and other contract or network terms - the correct provider information must be entered into the system to allow it to automatically determine the payable amount for covered service
5. Handling resubmissions - be alert to a high number of these because they may signal a problem on either the provider side (such as payments not being properly posted) or the insurer side (such as claim backlog)
6. Handling appeals and adjustments - the typical adjustment process is used to pay benefits that result due to an appeal
7. Dealing with fraud and abuse - the management team must be vigilant to prevent fraud and abuse

Question 23

Reasons claims are suspended by the claims transaction system

Answer 23

1. Problems with the system configuration, which need to be addressed
2. Inappropriate services for the patient’s age or gender
3. Services that require specific medical management review
4. Procedure codes that must be manually priced
5. Missing or inappropriate modifier codes affecting the pricing of surgical claims
6. Suspected other party liability
7. Suspicious diagnosis codes related to accidents
8. Suspected fraud or billing abuse

Question 24

Information included on the explanation of benefits

Answer 24

1. The provider’s name
2. The date(s) of service
3. The type(s) of service
4. Fees charged
5. The amount paid
6. Any remaining liability payable by the member
7. Reasons a claim was adjudicated the way it was (e.g., subject to deductible)
8. Appeal rights and procedures for requesting an appeal
9. Health plan contact information

Question 25

Categories to consider for coordination of benefits and other party liability

Answer 25

1. Other group health insurance - benefits are coordinated based on industry standard COB rules published by NAIC
2. Automobile insurance - liability is shifted from the payer to another insurer based on state laws
3. Workers’ compensation insurance - again, liability is shifted from the payer to another insurer based on state laws
4. Subrogation - benefits are recovered from members who have been compensated for costs via legal action

Question 26

Types of reports used by the claims area

Answer 26

1. Internal executive-level dashboards
2. Internal financial reports
   a. Claims payout
   b. IBNR
   c. Utilization reports
   d. Overpayment reports
   e. Voluntary refund reports
3. Internal productivity and quality reports
   a. Mailroom and EDI receipts
   b. Claims on hand
   c. Claims processed through auto adjudication
   d. Suspended claims
   e. Claims selected for random quality assessment or focused audit
   f. Ad hoc reports for continuous process improvements
4. External reports
   a. Quality and timeliness reports
   b. Group experience report
   c. Product experience report
   d. Medication therapy management (MTM) scores for Blue Cross Blue Shield plans
   e. COB and OPL reports by customer
   f. Provider-specific reports related to performance and risk-sharing
   g. Workforce modeling and planning

Question 27

Models used for outsourcing claims services

Answer 27

1. Shared service - consolidating back-office functions into a centralized office. Outsourced services often include mail intake, scanning, data entry, and certain types of claims processing
2. Onshore - vendors for these shared services have emerged, enabling the payer to migrate shared functions to lower-cost third-party partners. Over time, vendors moved to near-shore and off-shore locations to remain competitive.
3. Near-shore - setting up operations in English-speaking locations such as Canada. But increasing local labor costs contributed to the migration to other parts of the world.
4. Off-shore - setting up locations in areas such as India and the Phillipenes. Mus address occasional technology issues, must clearly delineate responsibilities and communication protocols, and must address legal, public relations, and human resource issues.

Question 28

Risk areas related to claims processing production and quality

Answer 28

1. Growing claims backlog - need quick action when production falls behind
2. Inadequate front-end control - need procedures to ensure only clean claims are accepted into the system
3. Inadequate management of suspended claims - these claims must be strictly monitored and quickly resolved
4. Inadequate focus on a continuous quality improvement process effort
5. Inadequate or ineffective workflow - close supervision is required to keep this from creating bottlenecks
6. Poorly-maintained claims engine or other operational applications - do not simply work around problems and allow poor system maintenance to go unchallenged
7. Inadequate or ineffective data management - implement an early warning mechanism to catch data management issues early
8. Incorrect benefit setup and group installation - this could result in thousands of claims being processed incorrectly
9. Incorrect provider contract set-up and maintenance - also could result in claims being processed incorrectly
10. Inadequate quality and financial controls - establish a quality control function and be sure adjudicators agree to the quality assessment process
11. Poor employee recruiting - organize the claims area with positions of increasing responsibility to create a career path to retain talented staff
12. Inadequate policy and procedure documentation - could lead to inconsistent claims adjudication and low employee morale
13. Inadequate training - training should include the proper context and background related to the claim adjudicator’s work
14. Inadequate data analysis and claims management reports - employ analysts to develop meaningful and insightful reports on demand
15. Failure to use the claims capability to identify customer and operational problems early - talk to claim adjudicators to get their insight on improvements that can be made

Question 29

Definitions of health care fraud and abuse

Answer 29

1. Health care fraud occurs when someone misrepresents a fact related to health care services in order to receive or increase payment from a health plan or the government. It involves intentional deception or misrepresentation.
2. Health care abuse typically occurs if an activity abuses the health care system but does not meet the legal definition of fraud or is not medically necessary
   The difference between most fraud and abuse is often the ability to prove intent

Question 30

Examples of health care fraud by providers

Answer 30

1. Billing for services not performed
2. Billing to a suspicious address
3. Billing using the provider identification of an unknowing innocent provider
4. Falsifying a patient’s diagnosis to justify medical procedures
5. Misrepresenting procedures performed to obtain payment for noncovered services
6. Unbundling - submitting bills for various procedures individually when they are required to be billed together
7. Billing for more drugs than were dispensed
8. Billing for brand name drugs when generics are dispensed
9. Upcoding - billing for a more costly service than the one actually performed
10. Duplicate billing
11. Submitting durable medical equipment (DME) claims for equipment not provided
12. Excessive lab tests and radiological exams
13. Waiving patient copays or deductibles
14. Falsifying medical records to justify payment
15. Billing for care provided to dead people

Question 31

Examples of health care fraud by patients

Answer 31

1. Misrepresentation on health insurance coverage applications
2. Falsification of eligibility as an employee
3. Filing false claims with payers
4. Identity theft to obtain care
5. Forging prescriptions
6. Obtaining prescriptions for illegal resale
7. Doctor shopping for narcotics

Question 32

Examples of billing abuse

Answer 32

1. Overutilization of services, such as refilling a prescription when not needed
2. Ordering more tests than medically necessary
3. Treating patients differently based on their insurance coverage
4. Changing certain procedure codes and unbundling of services usually delivered together
5. Charging outrageous fees to third-party payers where there is no contract in place

Question 33

Fraud risks faced by Medicare Advantage plans

Answer 33

1. Beneficiary fraud - includes identity theft to obtain care, reselling of prescription drugs, and doctor shopping for a physician who will provide desired drugs or services
2. Provider fraud - includes altering records to make it appear as if patients are being seen, and accepting unlawful kickbacks to prescribe certain drugs or DME
3. Vendor fraud - includes billing for service not rendered, sending items of lesser quality than what was purchased, and paying kickbacks to receive preferential contracts
4. Pharmacy fraud and abuse - includes drug switching (receiving an illegal payment to switch a patient to a different drug), drug shorting or splitting (intentionally providing less than the prescribed quantity), and drug billing fraud (such as billing for brand drugs when generics are dispensed)

Question 34

Potential indicators of health care fraud in a managed care setting

Answer 34

1. Insufficient time spent by providers with patients
2. High levels of referrals to specialists (may indicate a kickback arrangement)
3. Consistently poor care outcomes (may indicate lack of treatment)
4. Unusual patient encounter ratios (may indicate patients are not being seen)
5. High numbers of patient claims for care outside the HMO service area

Question 35

Elements of the Fraud Triangle

Answer 35

These must be present for fraud to occur

1. Pressure - can come in various ways, such as from a need to pay medical bills or to fuel a drug or gambling addiction
2. Opportunity (or aibility) to commit fraud - in health care, committing fraud has historically been fairly easy
3. Rationalization (excusing behavior) - for some, cheating the government or a health insurer is acceptable. For others, conditions of the economy or unemployment provide rationalization.

Question 36

Key ingredients of fraud control

Answer 36

1. Effective instruments to spot fraud early and clearly see emerging fraud patterns
2. Quick reactions to mitigate vulnerabilities before too much loss occurs
3. Tools for spotting new fraud wherever and whenever it occurs

Question 37

Ways health plans and MCOs detect potential fraud

Answer 37

1. Claims analysis
2. Calls, e-mails, or letters to leaders from patients, vendors, or providers
3. Coordination with other plans, task forces, or law enforcement agencies
4. Data analysis tools and reports
5. Ethics or compliance hotline calls from employees and patients

Question 38

Ways to identify and prevent fraud and abuse

Answer 38

1. Monitoring claims for compliance with billing and coding guidelines
2. Adhering to appropriate clinical documentation standards
3. Providers adhering to the standard of care for treatment
4. Educating all staff members responsible for medical records
5. Referring cases of suspected fraud and abuse to law enforcement and appropriate regulators

Question 39

Fraud control improvements related to health care reform

Answer 39

1. Significant additional financial resources for fighting fraud
2. High-level cabinet member support for the fight against health care fraud
3. Higher screening standards for billing Medicare and Medicaid
4. More coordinated exclusion between Medicare and Medicaid once a provider is kicked out of a program
5. Requirements that providers implement compliance programs
6. Allowing the government to suspend payments to certain providers suspected of fraud based on “credible allegations” of fraud
7. Numerous statutory amendments that make it easier to prosecute health care fraud

Question 40

The seven elements of an effective compliance program for health care plans to prevent fraud

Answer 40

As identified by the Office of the Inspector General (OIG):

1. Develop written policies and procedures
2. Designate a compliance officer and other appropriate bodies
3. Conduct effective training and education programs
4. Develop effective lines of communication
5. Enforce standards through well-publicized disciplinary guidelines
6. Conduct internal monitoring and auditing
7. Respond promptly to offenses and develop corrective action

Question 41

Steps for health care entities to mitigate exposure and liability related to government fraud audits

Answer 41

1. Follow as closely as possible all government regulations and laws, and seek interpretive guidance when needed
2. Dedicate appropriate resources to ensure that payment processing and billing systems are not overbilling
3. Implement an effective compliance program, self assess the program, and self disclose any improprieties
4. Be aware of the many entities working as government auditors, and what the authority is for each
5. When a fraud-related audit is taking place, designate an accountable person to receive requests, track requests and be aware of due dates, and communicate regularly with key leaders
6. Have the following elements in place:
   a. Clearly documented policies and procedures for preventing fraud and abuse
   b. Adequately staffed fraud team
   c. Effective fraud control training
   d. Internal monitoring and oversight activities
   e. Screening of staff against the OIG exclusion list and applicable state equivalents

Question 42

Measures for evaluating the member services area

Answer 42

1. Responsiveness
   a. Average speed to answer calls (goal of 30 seconds)
   b. Service level percentages (goal of 75-80% of calls handled within 30 seconds)
   c. Abandon rates (goal of less than 3% of all calls)
2. Contact resolution
   a. Calls resolved with no follow-up required (goal of 90%)
   b. Outstanding inquiries resolved within 14 days (goal of 90%) and 28 days (goal of 98%)
3. Customer service representatives are also measured individually
   a. Adherence to schedules
   b. Average time to handle a contact
   c. Percentage of contacts resolved on the first call
   d. Quality (measured via silent monitoring of calls)

Question 43

Ways in which members contact the customer interaction center

Answer 43

1. Interactive voice response (IVR) - may provide members a self-service option for some services, such as requesting a new identification card, checking the status of a claim, and enrolling in a plan
2. Inbound telephone calls (most common) - calls are routed to the right area via menus or IVR
3. Main and paper-based communications - commonly used for formal complaints or grievances. All inbound correspondence must be logged and tracked, usually after being scanned
4. E-mail - can be less efficient than live phone interaction because the response may not exactly meet the member’s needs and can therefore lead to extra work. Automated e-mail responses are generally effective for basic member requests.
5. Web chat or text messaging - usually initiated through a “click-to-chat” function on the plan’s website. It basically acts as a written version of an inbound phone call.
6. Internet self service - is effective for enrollment, issuing ID cards, tracking the status of a claim, and looking up providers, benefits, and eligibility
7. Mobile devices such as smartphones or tablets - to perform the same internet self service functions

Question 44

Reasons members contact their health plans (aka main functions performed by the member services area)

Answer 44

1. Any of the topics described in the new summary of coverage document - e.g., leads to questions related to coverage and cost sharing
2. Claims processing and payment issues (most common) - could be prompted by denial of payment, incorrect payment, delay of payment, or other errors
3. Enrollment issues, including ID card issues - common reasons include lost cards, incorrect information on the card, and adding a new dependent
4. Provider access issues (primarily in HMOs) - e.g., needs help selecting a primary care physician
5. Benefits issues, including appeals and denials of coverage

Question 45

Ways for members to appeal benefit denials or coverage rescissions

Answer 45

1. Informal internal review - the process includes a review by the case manager and the medical director, and the member is notified about whether coverage is approved or the denial of coverage is upheld (in which case the member is notified about formal appeal rights).
2. Formal internal appeal - the process is similar to the informal review, but may also include discussions with the attending physician, member, a formal appeals committee, and internal legal counsel
3. External appeal - in states where the appeals process includes all NAIC minimum protections, plans must comply with the state’s external review requirements. In other states, plans must either comply with the NAIC minimum protections or participate in a federal external review process.
4. Appeal to government agencies - applies in only some cases (e.g., MA members have the right to appeal to CMS)
5. Arbitration - in some states, arbitration is allowed for cases involving insured plans
6. Lawsuits - if a plan carefully follows its grievance procedure, the chances of a successful lawsuit against it are small

Question 46

ERISA requirements for internal appeals

Answer 46

State requirements typically conform to these standards

1. An individual must have at least 180 days to file an appeal
2. The plan must provide claimants with information relevant to their claims
3. The appeal must be reviewed by someone new who is not a subordinate of the person who made the initial decision. The reviewer must give no consideration to the initial decision.
4. Urgent appeals must be reviewed as soon as possible, but not later than 72 hours after the plan receives the review request
5. Preauthorization and postservice appeals must be reviewed within a reasonable period of time (but not later than 30 days for preauthorization appeals and 60 days for postservice appeals)
6. An individual may obtain an independent external review of a denied appeal

Question 47

Sources of data on member satisfaction

Answer 47

1. Surveys of current members - to evaluate service levels and determine what issues are important to members. May be focused on a few issues the plan wants to study, or may be broad and comprehensive.
2. Disenrollment surveys
3. Telephone response time and waiting time studies
4. Surveys of clients and accounts

Question 48

Proactive member services

Answer 48

Forces which have required or enabled a more proactive approach:
1. CDHPs with health care accounts
2. Advent of personal health records
3. Deeper integration into the health plan of disease management and other health and wellness functions
4. Publicly-available data, such as for evidence-based medicine
5. Easy-to-use decision support tools, enabling the front line to assist members
6. Robust customer insight and analytics tools
New member outreach - contacts new members and discusses the way the plan works and offers an opportunity for members to ask questions
Member education programs:
1. Education on administrative topics is the responsibility of member services
2. Health education is the responsibility of medical management, but member services is commonly involved and manages the communications

Question 49

Steps of the product development cycle

Answer 49

Product development is the process by which new products are created and existing products evolve

1. Innovate - consists of:
   a. Understanding the company’s strategic perspective
   b. Development of new ideas (see separate list of common drivers of product ideas)
   c. Idea screening - check for consistency with corporate goals and feasibility with the corporation’s abilities
   d. Market assessment - to determine if a market exists for the product (see separate list of questions answered by a market assessment)
2. Design the product - this phase consists of determining the product structure, plan design options, contribution requirements, and regulatory compliance
3. Build the product (see separate list of steps for building the product)
4. Sell the product - the product is often test marketed, after which revisions are done before it is mass marketed
5. Assess the product - monitor financial results and consumer and market feedback
6. Revise the product - changes may be indicated by the product assessment, regulatory requirements, or consumer demand

Question 50

Common drivers of product ideas

Answer 50

1. Innovator or follower - some companies are successful and innovating, while others are successful at following and learning from competitors
2. Changing laws and regulations - new rules can lead to new products developed specifically to operate within the new set of rules
3. Consumer demand - companies must constantly seek consumer feedback and market intelligence
4. Marketing and sales - these teams can spot holes in the product spectrum where consumer demand is not fully being met
5. Leveraging insurer capabilities - product development teams must know what the insurer does well and find ways to grow in those areas
6. Social need - for example, Medicare Part D served the social need of helping seniors who were being overwhelmed by the cost of expensive medications
7. Changing demographics - leads to a shift in the types of products that will be marketable and saleable
8. Changing economy and financial markets - leads to changes in purchasers’ views of their need for insurance
9. Competitive advantage - product development ideas should utilize the company’s competitive advantages

Question 51

Questions answered by a market assessment

Answer 51

1. What exists in the market today?
2. What is the product objective for the consumer?
3. What is the regulatory environment for this product?
4. What are the financial value and other benefits for the consumer?
5. What are the price targets? (the assessment may indicate a range of acceptable prices)
6. What is the likely reaction from competitors?
7. How will the sales team react?

Question 52

Steps for building a new product

Answer 52

1. Project enrollment - this is critical to helping senior management decide whether the product is worth pursuing
2. Price the product - includes an assessment of the market price sensitivity. After initial pricing, the projected enrollment should be reviewed again.
3. Perform financial assessments - to determine whether the new product can meet the company’s required return on investment or return on equity
4. Implement the infrastructure needed to administer the product (process claims, bill and collect premiums, and service member inquiries)
5. Get senior management approval

Question 53

Key players in the product development cycle

Answer 53

1. Product development team - is responsible for generating new product ideas and studying the market
2. Senior management - sets the company goals and is responsible for making the decision to pursue a proposed idea
3. Marketing - is focused on advertising, name recognition, and branding
4. Sales - often has insights into price sensitivity and the types of products customers want
5. Underwriters - can help quantify the risk associated with certain plan features
6. Information technology (IT) - can help understanding the feasibility of the infrastructure needed to administer the product
7. Operations - work with IT teams to administer the product
8. Compliance - ensures the product is compliant with laws and regulations
9. Actuarial - prices the product and works on the projections and feasibility studies
10. Finance - reviews the projected enrollment and pricing to determine whether projections meet corporate profit targets