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Healthcare Management > Payment Types > Flashcards

Payment Types Flashcards

1
Q

2 Types of Financial Risk

A
  • Demand Risk

- Volume (utilization) Risk

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2
Q

Demand Risk

A
  • NUMBER of people who seek out the service

- Become volume risk when they use the service

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3
Q

Volume (Utilization) Risk

A
  • Type of services performed
  • Quantity of services performed
  • Length of time services performed
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4
Q

The more people that seek (demand) a service ______

A

the more the insurer/patients will have to pay

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5
Q

Volume Risk:

Type

A

high cost or low cost?

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6
Q

Volume Risk:

Quantity

A

the more services provided the more the insurer/payer have to pay

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7
Q

Volume Risk:

Length

A

-length of time services are performed (length of stay)

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8
Q

Deductible

A

-the amount you must pay before insurance kicks in

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9
Q

Co-insurance

A
  • 20/80 (example)
  • after you hit the deductible you pay 20% of costs and insurer pays 80%
  • patient will pay 20% plus their co-pay
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10
Q

Co-Pay

A

-walk-in-the door fee

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11
Q

Fee-for-Service

A
  • pay for every procedure you get over your length of stay
  • no incentive for quality (if clinician messes up, pt will have to go back and get fixed=more payment)
  • do more=paid more=long LOS
  • “blank check syndrome”
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12
Q

Fee-for-Service:

Risk Profile

A
  • insurer bears all demand and volume risk

- provider has none

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13
Q

Discounted Fee-for-Service

A

-Same as fee for service but subtract a percent of each service

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14
Q

Discounted Fee-for-Service:

Incentive

A
  • do MORE services to make up for discount
  • (more visits, more procedures per visit)
  • no incentive for quality or cost containment
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15
Q

Discounted Fee-for-Service: Risk Profile

A
  • insurer still bears all demand and volume risk

- provider still bears almost none

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16
Q

Fee Schedule

A
  • negotiating actual price per code
  • how medicare works
  • insurer pays per code basis
17
Q

Fee Schedule:

Incentives

A
  • do more codes that pay more
  • no incentive for quality
  • some incentive for cost containment (depending on fee schedule)
18
Q

Fee Schedule:

Risk Profile

A
  • insurer bears all demand and volume risk
  • provider bears some volume risk if fee sched amounts that are so low that they don’t cover the per visit costs of providing care
19
Q

Per Diem/Per Visit

A
  • provider paid a set amount per patient per day/visit no matter what services you provide
  • can make money if you help more patients per day (outpatient)
20
Q

Per diem/per visit: Risk Profile

A
  • no provider risk for demand
  • insurance still has all risk
  • strong provider risk for volume of services provided each day/visit
21
Q

Case Rate

A
  • One payment for ENTIRE LOS (same cost for every diagnosis)
  • no matter how many procedures/surgeries
  • no matter how long LOS is
  • no matter how ill pt
22
Q

Case Rate:

Incentives

A
  • very efficient care and effective–>reduce LOS

- lose money if LOS too long or doing unnecessary procedures

23
Q

Case Rate covers

A
  • inpatient acute
  • inpt rehab facility
  • home health
  • long term acute care hospital
24
Q

Case Rate:

Risk Profile

A
  • insurer bears ONLY demand risk

- provider now bears volume risk for: types of services provided, quantity of services, length of stay

25
Q

DRG=

A

Diagnosis Related Group

26
Q

DRG

A
  • one payment for entire LOS
  • not sensitive to volume considerations
  • but now sensitive to diagnostic group that patient falls into
  • Allows higher payment for more complex rates
  • One payment but different cost based on diagnosis
27
Q

DRG:

Risk Profile

A
  • same as case rates
  • insurance bears only demand risks
  • provider bears volume risk
28
Q

Prospective Payment

A

insurance companies know upfront what the total cost they bear

29
Q

Capitation

A
  • no payment for length of stay
  • payment is based on “per member per month” (PMPM)
  • insurer pays PCP flat rate per member per month
  • doesn’t matter if 0 or all 8,000 covered members come for care, payment is still the same
30
Q

PMPM

A

per member per month

31
Q

Capitation:

Incentives

A
  • try to keep the pt out of your office (more patients=more cost to treat them=you get paid less)
  • prevention
32
Q

Capitation:

Risk Profile

A
  • insurer bears essentially none for PCP services
  • premiums must cover PMPM payments + profit target
  • provider has essentially become the insurer (bears demand AND volume risk for those services)
33
Q

Global Capitation

A
  • “regular” capitation=physician is capitated only for his services
  • global capitation=primary care practice is paid one annual rate
  • PCP practice pays for all care required by members in the knee
34
Q

Global Capitation:

Incentives

A
  • prevention–>manage health of members
  • cost effectively manage acute problems
  • refer pts to more cost effective providers (PTs)
35
Q

Global Capitation:

Risk Profile

A
  • practice is essentially the insurer
  • insurer is a premium pass through
  • provider bears all demand and volume risk (for all services)
36
Q

Global Capitation + PCMH

A

interdisciplinary management of health of population

  • global capitation could be used as primary PCMH payment methodology
  • PTs can be primary care provider for msk pts
37
Q

PCMH=

A

Patient centered medical home

Healthcare Management (11 decks)

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