Quiz 1 Flashcards
Any profit generated from the enterprise can be paid to shareholders (owners)
they do pay property & sales taxes
for proffit
Any profit generated from the enterprise is put back into the business NO shareholders (owners) Do NOT pay property & sales taxes
not for proffit
The amount the patient must pay before the insurer will pay anything
deductible
Amount patient pays at time of service ALL YEAR (even after deductible is met
copay
A percentage of the total cost that the patient must pay
Usually ranges from 10-20% for in-network services
co insurance
public insurance is aka
govt insurance
sometimes still called “indemnity”
Provider billed insurer and insurer paid the claim
fee for service
old way of insurance
the dominant pay sx until the 1990s
FFS
A method of reimbursement based on payment for services rendered. Payment made by an insurance company, the patient, or a government program, such as Medicare or Medicaid. With respect to the physicians or other suppliers of service, this refers to payment in specific amounts for specific services rendered. In relation to the patient, it refers to payment in specific amounts for specific services received, in contrast to the advance payment of an insurance premium or membership fee for coverage, through which the services or payment to the supplier are provide
FFS
2 types of managed care
HMO
PPO
type of managed care that were successful in reducing healthcare inflation for the first time in American history
HMO
A form of “managed care”
started in 1980’s
providers sign contracts governing payment
Insurers offer lower premiums by restricting the provider panel (or # of in network docs) but not the most restrictive form of managed care
PPO - preferred provider organization
in network/out of network = PPO
type of managed care New idea = cost responsibility by PCP’s through capitation Gained popularity in 1990’s for: Reduced premium costs Reduced health care cost
HMO
health maintanance org
why were HMOs unpopular in the 90s
loss of pt choice
type of coverage that was usually a combination of a Medical Savings Account (MSA) and a high deductible health plan
New idea = cost responsibility borne by the patient
consumer directed health plan
CDHP
what the provider submits to the insurer
claim
EOB
Explanation of Benefits
defines the allowable = what the insurer will pay
Is the definitive document of what the provider will be paid by insurer & patient
Example of an EOB for a $49,000 outpatient procedure
The amount the insurer will actually pay
Will be defined on the EOB
allowable
what is this:
Your contract calls for you to be paid $80 per outpatient PT visit
$80 is the ______
Even if the visit lasts one hour and you bill $500, you will be paid $80
allowable
FEDERAL insurance benefit plan for ALL elderly (65+ years old)
Uniform benefits across all states
medicare
medicare is regulated by
HHS (health and human services)
medicare was passed and implemented what years
Passed in 1965 and began in 1966
what is MRP
Medicare Replacement Plans
“Medicare Managed Care”
Patients can opt out of traditional Medicare and be covered by a private insurer (e.g., Humana, United Healthcare, etc.)
Medicare pays the patient’s premium
eligibility for medicaid varies by __
state (administered by the state)
medicaid is funded how
fed AND state
Billing system using procedure codes (defacto billing standard in the USA)
CPT4
current procedural terminology
CPT 4 was created by what org
Developed and owned by the American Medical Association (AMA)
What is ICD 9
International Classification of Diagnoses – Version 9
Diagnostic coding system used by most countries to classify patient diagnoses
what does PPS stand for
prospective payment sx
what is PPS
Adopted by Medicare with TEFRA in 1983 with DRG’s then with BBA 1997
Payment system whereby the payor knows what will be paid AHEAD OF TIME (prospectively) for diagnoses or procedures
first medicare form of PPS
DRG
Hospital is paid one lump sum for the entire length of stay is a CASE RATE or
no more charging for every individual service
DRG
dx related group
specifics of an IRF
3+ hours of PT, OT, SLP per day
Minimum of 5 days of therapy per week
how many hrs of therapy per day for SNF
less than 3
HHA
home health agency
2 types of risk
demand
volume (utilization)
what is demand risk
number of pple
The more people that seek (demand) a service the more the insurer (and/or patients) will have to pay
If more people seek the service the risk (cost) increases
If fewer people seek the service the risk (cost) decreases
volume (utilization risk) has to do with what 3 things
Type services are performed
Quantity of services performed
Length of time services are performed
OOP goes towards
the deductible
how did FFS have no incentives for quality
Mistakes were paid for
Do more = get paid more = long LOS
Don’t get paid more for doing higher quality work
“Blank Check Syndrome”- if pt doesn’t have to pay for it, it’s free for all for whatever is performed by HCP
Risk Profile=Insurer bears it all, demand & volume
Provider has none
difference btwn FFS and discounted FFS
Fee for service you could go anywhere
Discounted fee for service = you trade discount for volume (provider decreases charge and gives a % discount, and insurance companies will put them in a preferred group) (but bc you gave discount of overall visit, increase in ind prices of interventions occurred)
who assumes risk for DFFS
Insurer still bears all demand and volume risk
what is the dominant form of payment for OP services in KC
fee schedule
Negotiating a price per code (cpt) – these vary btwn clinics (based on insurance preference list if you agree to do discounted fee for service)
fee schedule
Form of payment whereby the insurer pays on a per CPT code basis, but the amount paid is a pre-negotiated amount that is NOT based on charges
No matter what you charge, you will only be paid what the prenegotiated amt is.
The dollar amount is the final result of your negotiations with the insurer
fee schedule
MPFS
medicare physician fee schedule (type of fee schedule)
why do fee schedules have no incentive for quality
providers would do certain interventions tied to certain codes and avoid those that didn’t pay well
with fee schedule, pricing is ____
irrelevant
Ex of downfall of ______: 8$ for US and 60$ for Manual, most private PTs won’t do the cheaper interventions
The pricing is irrelevant plays into PT clinics that have multiple locations vs the 1 stand alone PT clinic.
fee schedule
who assumes risk in fee schedule
Insurer still bears all demand and volume risk
Provider begins to bear some volume risk if the fee schedule amounts are low such that they do not cover the per visit costs of providing care
per diem applies to per __ or per __
day
visit
ONE $$$ Payment for Entire LOS
No matter how many procedures/surgeries/interventions
No matter how long the LOS was
No matter how ill the patient is
case rate
whats the incentive with case rate
Very efficient care reduce LOS
If LOS is too long then will lose money
If do unnecessary procedures then will lose money
per diem vs case rate
case rate= the Sooner you get them out of hosp, the more money is made by hosp
In perdiem, the longer you keep them the more money you make
explain risk involved in case rate
Insurer bears ONLY demand risk
Insurer pays providers only when people seek out the service, but that payment will be the same no matter what
*Provider now bears ALL volume risk Is on the hook for: Type of services provided Quantity of services provided Duration (LOS) that services are provided
A form of case rate, different payment levels depending on the dx
you must do coding accurately
DRG
How medicare pays acute hospitals for all stays
drg
ONE $$$ Payment for Entire LOS
Still not sensitive to any volume considerations
BUT
Is sensitive to diagnostic group that patient falls into
DRG
what is the 200 with DRG
~200 “transfer” MS-DRGs mitigate Medicare’s risk- ex: allotment for THA is 5 days, but if you get them out of the acute hosp before the allotted DRG, they only pay for the days they were there (not the total allotted DRG). The 200 are the most common procedures in the US
with capitation, payment has zero to do with ___
LOS
with this plan you get paid a flat rate per member per month (PMPM) This plan, you get paid regarless if 8000 or 0 pts show up in your clinic for that month
capitation
ex of capitation, how much is paid
Ex: 8,000 covered lives in their plan at 5$
8,000 X $5 PMPM
$40,000 payment per month made to PCP, regardless if you see pts or not
with capitation you get paid more to do
less
explain who has risk with capitation
Insurer bears essentially none for PCP services
Provider has essentially become the insurer
*Bears demand and volume risk for those services
differentiate btwn capitation and global capitation
with capitation, docs were paid more to not see pts
Capitation - PMPM (month)
With reg capitation, docs would refer to specialists to keep them out of their office.
With global, Doc is only capitated under one practice within the group, insurance companies pay 1 flat rate for the group of pts for the entire YEAR, if you refer them out to someone else you get sent the bill (can’t use referral to offload cost).
incentives with global capitation
Prevention = manage health of members on own
YOU Monitor chronic issues
Diabetes, COPD, CHF, etc.
Cost effectively manage acute problems
who assumes risk with global capitation
The Practice is essentially the insurer
Insurer is simply is a premium pass-through
Provider/practice Bears ALL demand and volume risk (for ALL services
PCMH
pt centered medical home
one conglomerate of HCP under the same practice
could use global capitation
manage the overall health of the population
This is where the big incentive for preventive care comes in…with this plan, it is crucial to keep pts healthy
