Unit 27: Health Insurance Providers Flashcards
Page 372
What does the term “traditional insurers” refer to?
common types of insurance company organizations that are represented as a specific image in the public’s mind.
Handwritten note: HMO and PPO - no more than a delivery system
Page 373
Handwritten note next to “Fraternals” but nothing was highlighted. What are the characteristics of fraternal or fraternal benefit societies?
3 characteristics:
- member only
- non-profit
- lodge system
What two things does the term “cooperative” refer to?
- consumer cooperatives
- producer cooperatives
What are examples of producer cooperatives?
Blue cross/blue shield and some HMOs
What are the two types of consumer cooperatives?
Incorporated mutual insurance, companies, and reciprocal companies
What is the difference between consumer cooperatives and producer cooperatives?
- consumer is NON-profit (my trick: NON rhymes with CONsumer)
- producer is FOR profit (my trick FOR links to R in produceR)
what are reciprocal companies that are a type of consumer cooperative?
A company based on the idea, reciprocation, or give-and-take. Members of one of these companies agreed to share insurance responsibilities with all other members.
Think mom and dad Christian organization
What do “participating (aka par)” and “nonparticipating (aka nonpar)” health insurance policies mean?
a policyholder either does or does not participate in, or receive, a share of any surplus that results from the insurer’s business operations (i.e. if a health insurance company experiences a saving in claims during the year, sometimes it is shared with policyholders)
Page 374
In “participating” policies, from what 3 sources may the policyholder receive a return from a surplus?
- Reserve for Claims – company paid out fewer claims than they expected
- Interest on Investments – premium dollars invested by the company earned more than expected
- Savings on Expenses – funds earmarked for expenses were not all spent
Are dividends considered a surplus?
Yes
What is a “domestic company?”
(important to know)
A company operating in the state in which its home office is located called
Home office of company ABC is in Michigan. In the state of Michigan, the company is considered domestic.
What is a “foreign company?”
(important to know)
A company operating in states outside where its home office (in the other states, this company is considered a “foreign company)
ABC company does business in Illinois, and is considered a foreign company in Illinois.
– The company must be licensed to do business in states other than where it’s home office is.
What is an “alien company?”
(important to know)
A company whose home office is OUTSIDE the US and it operating IN the US
If company ABC is headquartered in London, in both Michigan and Illinois, the company would be considered an alien company
- must be licensed to do business in whichever states it operates
Page 375
What is a company that has been licensed to sell insurance in a particular state called?
(important to know)
In that state where it is licensed, it is known as an “authorized” or “admitted” company.
What is a company that has NOT been licensed to sell insurance in a particular state called?
(important to know)
unauthorized or nonadmitted
Blue Cross/Blue Shield organizations are often referred to as what?
service organizations
What is Blue Cross/Blue Shield an example of?
producers’ cooperatives
What are individuals who are “protected” under plans like Blue Cross/Blue Shield known as, and instead of what? pg 375
known as “subscribers” rather than “insured”
How are reimbursements for incurred expenses paid under Blue Cross/Blue Shield type organizations?
Primarily (exceptions on occasion) directly to the providers (the companies), not subscribers
What does Blue Cross cover?
hospital expenses
What does Blue Shield cover?
medical/surgical expenses
What is the purpose of HMOs?
manage health care and costs through a program of prepaid care emphasizing prevention and early treatment
They try to maintain health before it becomes a problem
What does HMO prepayment entitle health care consumer to do?
receive wide range of services
What is this type of HMO prepayment basis referred to as?
“service-incurred”
HMOs are exclusively what?
(handwritten note)
co-pay
Page 376
How is traditional health insurance coverage handled vs. HMOs in relation to how insured is paid?
traditional health insurance - a reimbursement basis (insured or provider reimbursed for all/part of medical expenses actually incurred
HMOs deal with what and health insurance deals with what in regard to payment and treatment
HMOs deal with treatment before while Health insurance doesn’t deal with preventitive programs but instead pay only after the fact of diesease or injury
HMO’s deal with preventitive care before hand but also what in regards to once and injury or something occurs?
They still provide for hospital, surgical, medical treatment at services are needed.
How does traditional health insurance function? chart pg 376
In traditional health insur, the consumer receives health care from one group of professionals (docs, hospitals, therapists, etc) but financial coverage comes from a separate entity - insur co.
What does “dual function” mean in regards to the way HMOs differ from traditional health insur?
An HMO provides both the health care services AND the health care coverage
How do the two combined functions of HMOs (as provider of care and coverage) work?
HMO made up of group of medical practitioners who have contracted to provide services to HMO members at agreed-upon prices.
What is the member’s role in an HMO?
Member agrees to pay a specified amount in advance to cover required hospital/medical services.
Page 377
Are HMOs required to meet minimum federal/state requirements?
yes
Once federal/state requirements are met, where are HMOs allowed to operate?
within a designated service area (often within a certain country or distance from HMO facility)
What is the federal law regarding employers regarding HMOs
If the HMO operates in a service area of an employer with 25 or more employees and provides health benefits to those employees, option to enroll in an HMO must be offered as an alternative to traditional health insurance.
What is the law called that requires an employer to offer both HMO and traditional health insurance options called?
dual choice option or dual choice law
What is the contribution requirement of the employer regarding HMO and traditional health insurance options?
employer must contribute equally to either type of health insur coverage
If employer is offering HMO, is he required to pay more for it than for traditional health insurance he offers?
No
If employee chooses a more expensive HMO than traditional health insurance, who pays the difference?
employee choosing HMO pays the difference
What is the diference between a Profit vs. Nonprofit HMO?
For Profit:
Usually (not always) HMO is a producers’ cooperative operated by a group of physicians
Non-profit:
If it is a consumer cooperative, docs are salaried employees of HMO
Page 378 (Four “typical structures of HMOs)
How is a typical structure – GROUP MODEL (aka “medical group model”) of an HMO structured?
HMO contracts with an independent medical group that specializes in a varity of medical services to provide the services to HMO subscribers
Who does the HMO pay in the group model/medical group entity?
HMO pays the medical group not the individual services providers
What is a capitation fee often paid by the HMO?
A fixed amount paid monthly to the group (medical group entity) for each HMO member
Allows HMO to make money on those members not using many services vs. the money they lose on higher use members.
How does a typical structure – STAFF MODEL, work?
Contracting physicians are paid employees on staff of the HMO, often in a clinic setting at HMO facility.
HMO may even own/operate a hospital in some cases
How does the typical structure – NETWORK Model work?
- Operates similar to staff model
- a network increases accessibility to providers as a convenience for HMO subscribers who might otherwise have to go to a clinic far from home/work
How does the typical structure – INDIVIDUAL PRACTICE ASSOCIATION (IPA) MODEL work?
allows HMO to contract separately with any combo of physicians, medical groups, or physician associations.
** This gives HMO members maximum fredom of choice of physicians/locations **
HMOs can hire what 4 groups?
- group (group model)
- Staff members (work on HMO staff)
- Create Network (or numerous doctors) for people to go see
- Sole practitioner can be apart
Page 379
What are “Open and Closed” Panel Types and what does it mean?
- another way to characterize HMOs
- A panel is a network (handwritten note)
- Docs, hospitals, and other health care providers are referred to as the HMO’s panel
How does an Open Panel work?
Any and all providers who want to provide services for the HMO may do so as long as they agree to the HMOs requirements
How does a Closed Panel work?
The HMO choses a limited number of health care providers chosen by HMO. subscribers must receive care from this closed panel of providers
Page 380
What are some of the basic health care services that HMO are required?
Buddy, there is a list of 7 but none are highlighted
What are some of the health care services that many HMOs may provide but are not required?
Buddy, there is a list of 8 but only “prescription drugs” is highlighted
How can consumers get more services from their HMO, above and beyond the required basic health care services that the HMO must provide?
purchase additional services (supplemental services) from the HMO only as an “adjunct” to the basic care offered.
Adjunct = add on
What is a health insurance co pay?
a set fee you pay for a doctor visit or prescription.
You typically pay it at your appointment or when you pick up a prescription.
How are co-pays handled with an HMO?
Members are charged only nominal amounts (co-pays) for basic services on top of the original monthly payment
Page 381 (important features of HMOs)
What is the Gatekeeper Systemthe gate between the member and the healthcare providers.
- members must select a primary care physician (PCP) who manages/authorizes/refers to specialists, etc.
- PCP must be involved in all aspects of a member’s health care in order for claims to be paid.
Think of this person is opening (or refusing to open) the gate between the member and the healthcare providers.
(FYI: to me, a babysitter – my new medicare blue cross has to run everything by Dr. Licht (yuck). I could have paid more money per month to avoid this inconvenience)
How are co-pays handled on supplemental (adjunct) services?
HMOs are permitted to require co-payments on these services, as well as charging an additional monthly payment for these additional services.
(important features of HMOs)
How accessible are HMOs to members as a rule?
members have 24 hr acess to the HMO
(health care professionals must be available to respond during non-business hrs.)
(important features of HMOs)
What two things does “open enrollment” mean?
- In an employer-sponsored group plans, it’s a period each year when employees choose to enroll or remain enrolled in HMO or make changes to their health plans.
- A period each year when an HMO must advertise availability to the general public on an individual basis (for them to join)
(important features of HMOs)
What is nondiscrimination regarding HMOs? (in regards to when it is offered to a group
In HMO coverage offered to a GROUP, it may not refuse to cover an individual member because of a preexisting condition
What are coverage complaints in HMOs and how are they handled?
They are any complaints in regard to coverage. Weatherby coverage offered, pain under denial, health claims, and similar items.
The complaints are reviewed internally might eventually be referred to the state insurance department
What are care complaints in HMOs and how are they handled?
These are Compliance regarding the quality of care received by an HMO provider. Medical personnel reviewed these type of complaints
HMO subscribers must receive a document, indicating how complaints can be registered
(important features of HMOs)
How should HMOs handle 2 types of complaints? What are the two types of complaints?
Have mechanisms in place to handle
1. coverage complaints
2. care complaints
(important features of HMOs)
What is Prohibited Practices?
HMOs are prohibited from canceling or disenrolling members because of their current health status or usage of health services
Page 383
What are Preferred Provider Organizations (PPOs)?
- PPOs are an effort to reduce medical costs
- an arrangement where a group of providers, independent hospitals in a certain area (a state, etc.) agree to provide a range of services at PREARRANGED costs.
Are the fees in PPOs higher or lower than what an individual would pay for the same service?
Typically the agreed upon fee is lower for the HMO members
In preferred provider organizations (PPO), providers are paid on what?
fee for service basis
Why would providers agree to charge a lower fee in a PPO arrangement
they receive a guaranteed payment from the PPO and a potential increase in number of patients
Page 384
PPO and HMOs are often lumped together and referred to as what type of systems?
managed health care systems
What does HMO and PPO stand for?
- Health maintenance organizations
- Preferred Provider organizations
What is the difference between a stock and mutual company?
- Stock companies have stock holders and mutual companies have policyholders
- Stock companies sell stocks to stockholders who buy stocks from the stock company….. they get paid in dividends
- mutual companies are owned by policyholders and … the policyholders get paid by receiving excess earnings returned
Insurance companies can be considered in terms of their ownership as either what two types of companies?
stock or mutual company
