question

What are three types of MCOs (managed care organizations)?

answer

HMOs (health maintenance organizations) PPOs (preferred provider organizations) POSs (point-of-service plans)

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What are HMOs?

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1st type of MCO Wellness care Capitation Provider network - gatekeeping Typically no deductibles Low copayments

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What is a staff model?

answer

providers are salaried great degree of control over practice patterns (utilization management)

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What is a group model?

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contract with multispecialty group practice and hospitals providers employed by practice (not HMO) HMO pays capitated fee High degree of control over practice patterns

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What is a network model?

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HMO contracts with multiple group practices HMO pays capitated fee Generally offers wider selection of physicians Fewer utilization controls

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What is a Independent Practice Association (IPA) Model?

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IPA is a separate legal entity from the HMO IPA contracts with providers and group practices HMO contracts with the IPA HMO generally pays capitated fees to IPA IPA pay physicians through a separate mechanism (capitation, FFS, etc.) Implications: IPA shares risk with physicians IPA monitors and manages utilization IPA provides health services HMO enrollees have more choice of providers

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What are PPOs?

answer

HMOs + out-of-network options Enrollees can see out-of-network providers for higher copayments PPOs reimburse providers via discounted FFS Fewer restrictions on care provided Generally no gatekeeping Precertification for hospitalization and expensive outpatient procedures

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What are POSs?

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HMOs + PPOs Expanded provider networks (in- and out-of-network) and tight utilization controls Utilize capitation No gatekeeping, but higher fees for out-of-network care

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What are the implications of MCOs in reference to access?

answer

Good access to primary care, prevention, and health promotion Makes sense, huh? Fewer health disparities compared to traditional FFS Still too expensive for many small employers

question

What are the implications of MCOs in reference to quality?

answer

In general: enrollees didn't like it Who was the provider protecting and treating - him/herself or the patient? Denied care, etc. Evidence shows that MCOs actually improve early detection and treatment and do not compromise care

question

What were the implications of MCOs in reference to costs?

answer

there continues to be inflation in the economy

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What is Fee for Service (FFS)

answer

Services can be broken down into individual parts Exams, blood analysis, etc. Each service is billed and paid for separately

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What was the risk of having fees set by providers?

answer

Risk: incentive for provider-induced demand Rarely used Still used by some providers (dentists, optometrists)

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What is packaged pricing?

answer

Bundled charges Related services are grouped together One bill for the package of services For example, obstetrics services

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What is Resource-Based Relative Values Scale (RBRVS)?

answer

Services reimbursed based on "relative value" Time, skill, and intensity of service Complex formula Medicare developed in 1989 Publishes Fee Schedule every year (geographic area adjusted)

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What is Reimbursement under Managed Care?

answer

PPOs: discounted FFS negotiated with network provider HMOs: Pay providers salary Capitation - provider is paid a monthly rate per enrollee, regardless of whether the enrollee needs care or not Removes incentives for provider induced demand

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What is a retrospective reimbursement?

answer

Traditional way of reimbursing health care services Reimbursement rates were set after evaluating the costs Directly related to length of stay, services provided, cost of providing the services No incentive to control costs Generally not used any more

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What is a prospective reimbursement?

answer

Traditional way of reimbursing health care services Reimbursement rates were set after evaluating the costs Directly related to length of stay, services provided, cost of providing the services No incentive to control costs Generally not used any more

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What were the fees for service payments?

answer

Visit any provider/hospital you want whenever you want (no referrals) Usually responsible for premiums, deductibles and coinsurance (80/20) -you may be required to pay for care yourself and be reimbursed by the plan High moral hazard not only for patient but for doctors

question

What did managed care do?

answer

-"mechanism for providing health services in which a single organization takes on the management if financing, delivery, and payment" -Think of it like a toolkit -really its a set of principles or ways of providing care Employer-MCO relationship ----enrollees agree to visit MCO contracted providers MCO - provider relationship ----negotiated reimbursement -utilization controls (you don't get more or less than you need )

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Utilization Management

answer

Remember: when you use care, you spend the money that you've paid the insurance through premiums -those claims are called losses because the company is losing money on you -one way to reduce cost is to control what you can and cannot receive for services

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MANAGED CARE

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THE DELIVERY OF HEALTH CARE WITH THE FINANCING OF THAT CARE. YOU PAY A MONTHLY FEE TO RECEIVE YOUR HEALTH CARE FROM A GROUP OF PHYSICIANS, HOSPITALS, AND OTHER SERVICE PROVIDERS SELECTED BY THE PLAN.

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HEALTH MAINTENANCE ORGANIZATION (HMO)

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THE MOST RESTRICTIVE AND PROVIDE FEWER CHOICES OF PROVIDERS TO CONSUMERS. ONE STOP CARE. MUST CHOOSE PRIMARY PHYSICIAN

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INDIVIDUAL PRACTICE ASSOCIATONS (IPA)

answer

LESS RESTRICTIVE FORM OF HMO THAN THE GROUP OR STAFF MODEL. MOST HMO MEMBERS HAVE THIS PLAN. PROVIDE PATIENT WITH A LIST OF PHYSICIANS TO CHOOSE FROM.

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POINT OF SERVICE (POS)

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PERMIT MEMBERS GREATER CHOICE AND FLEXIBILITY BY ALLOWING YOU THE OPTION OF GOING "OUT OF PLAN" TO USE NON-HMO PROVIDERS (MUST PAY MORE TO DO SO)

question

PREFERRED PROVIDER ORGANIZATION (PPO)

answer

NETWORKS OF DOCTORS AND HOSPITALS THAT HAVE AGREED TO GIVE THE SPONSORING ORGANIZATION DISCOUNTS ON THEIR USUAL RATES. GATEKEEPER. GREATEST FREEDOM, SO HIGHER PREMIUM.

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PER MEMBER PER MONTH

answer

IS A RELATIVE MEASURE, THE RATIO, BY WHICH MOST EXPENSE AND REVENUE, AND MANY UTILIZATION COMPARISONS ARE MADE.

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QUALITY MANAGEMENT

answer

INVOLVES ENSURING MEMBERS ARE GETTING ACCESSIBLE AND AVAILABLE CARE, DELIVERED WITHIN COMMUNITY STANDARDS; AND ENSURING A SYSTEM TO IDENTIFY AND CORRECT PROBLEMS, AND TO MONITOR ONGOING PERFORMANCE.

question

UTILIZATION MANAGEMENT

answer

INVOLVES COORDINATING HOW MUCH OR HOW CARE IS GIVEN FOR EACH PATIENT, AS WELL AS THE LEVEL OF CARE. THE GOAL IS TO ENSURE CARE IS DELIVERED COST-EFFECTIVELY, AT THE RIGHT LEVEL, AND DOESN'T USE UNNECESSARY RESOURCES.

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OUTCOMES MANAGEMENT

answer

DETERMINES THE CLINICAL END-RESULTS ACCORDING TO DEFINED VARIOUS CATEGORIES AND THEN PROMOTE USE OF THOSE CATEGORIES WHICH YIELD IMPROVED OUTCOMES

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DEMAND MANAGEMENT

answer

A PROGRAM ADMINISTERED BY THE PROVIDER ORGANIZATION TO MONITOR AND PROCESS MANY TYPES OF INITIAL MEMBER REQUESTS FOR CLINICAL INFORMATION AND SERVICES.

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DISEASE MANAGEMENT

answer

APPROACH FOCUSES ON SPECIFIC DISEASES, LOOKING AT WHAT CREATES THE COSTS, WHAT TREATMENT PLAN WORKS, EDUCATING PATIENTS AND PROVIDERS, AND COORDINATING CARE AT ALL LEVELS. HOSPITAL, PHARMACY, PHYSICIAN, ETC.

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LOCK-IN

answer

A CONTRACTUAL PROVISION BY WHICH MEMBERS ARE REQUIRED TO RECEIVE ALL THEIR CARE FROM THE MANAGED CARE PLAN'S NETWORK OF HEALTH CARE PROVIDERS.

question

MEDICARE SUPPLEMENT INSURANCERIVATE HEALTH INSURANCE THAT PAYS CERTAIN COSTS NOT COVERED BY FEE-FOR-SERVICE MEDICARE, SUCH AS MEDICARE COINSURANCE AND DEDUCTIBLES.

answer

PRIVATE HEALTH INSURANCE THAT PAYS CERTAIN COSTS NOT COVERED BY FEE-FOR-SERVICE MEDICARE, SUCH AS MEDICARE COINSURANCE AND DEDUCTIBLES.

question

POINT-OF-SERVICE (POS) OPTION

answer

A MEMBER'S OPTION TO CHOOSE TO RECEIVE A SERVICE FROM OUTSIDE THE PLAN'S NETWORK OF PROVIDERS FOR AN ADDITIONAL FEE SET BY THE PLAN. GENERALLY, THE LEVEL OF COVERAGE IS REDUCED FOR SERVICES ASSOCIATED WITH THE USE OF NON-PARTICIPATING PROVIDERS.

question

PREFERRED PROVIDERS

answer

PHYSICIANS, HOSPITALS, AND OTHER HEALTH CARE PROVIDERS WHO CONTRACT TO PROVIDE HEALTH SERVICES TO PERSONS COVERED BY A PARTICULAR HEALTH PLAN

question

Staff model

answer

Closed panel HMO, buildings owned by HMO, preauth necessary for specialist referrals;EMPLOYS PHYSICIANS TO PROVIDE HEALTH CARE TO ITS MEMBERS. ALL PREMIUMS AND OTHER REVENUES ACCRUE TO THE MANAGED CARE ORGANIZATION, WHICH COMPENSATES PHYSICIANS BY SALARY.

question

Group model

answer

Paid by capitation. Independent, multispeciality groups, usually share facility, staff, med records

question

IPA individual practice association

answer

Outpatient networks, providers maintain own offices and identities. HMO and non-HMO patients are seen

question

Open panel plan

answer

IPA individual practice association

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Network model

answer

Multiple provider arrangements. Healthcare provider paid like fee for service, group practices might have capitation payment

question

Point of service

answer

Hybrid. Patients use HMO provider or go outside the plan. PCP is required.

question

Open-ended HMO

answer

Point of service, hybrid

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Capitation

answer

Method of payment for health services in which an individual or institutional provider is paid a fixed, per capita amount for each person enrolled without regard to the actual number of nature of services provided or number of person served.

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Carve-out

answer

Contracts that separate out services or populations of patients or clients to decrease risk and costs.

question

Case management

answer

Coordination of individual's care over time and across multiple sites and providers, especially in complex and high-cost cases. Goals include continuity of care, cost-effectiveness, quality, and appropriate utilization

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Closed panel

answer

Type of health maintenance organization that provides hospitalization and physician's services through its own staff and facilities.

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Enrollee

answer

Covered member or covered member's dependent of a health maintenance organization (HMO)

question

Exclusive provider organization (EPO)

answer

Hybrid managed care organization that is sponsored by self-insured (self-funded) employers or associations and exhibits characteristics of both health maintenance organizations and preferred provider organizations.

question

Group practice model

answer

Type of health maintenance organization (HMO) in which the HMO contracts with a medical group and reimburses the group on a fee-for-service or capitation basis

question

Group practice (clinic) without walls (PWW, CWW)

answer

Type of integrated delivery system in which the individual physicians share administrative systems but maintain their separate practices and offices distributed over a geographic area.

question

Health maintenance organization (HMO)

answer

Entity that combines the provision of healthcare services. Characterized by (1) organized healthcare delivery system to a geographic area; (2) set of basic and supplemental health maintenance and treatment services; (3) voluntarily enrolled members; and (4) predetermined fixed, periodic prepayments for members coverage. Prepayments are fixed without regard to actual costs of healthcare services provided to members

question

Independent practice association (IPA)

answer

Type of health maintenance organization (HMO) in which participating physicians maintain their private practices, and the HMO contracts with the independent practice association. The HMO reimburses the IPA on a capitated basis; the IPA may reimburse the physicians on a fee-for-service or a capitated basis

question

Integrated delivery system

answer

Generic term for the separate legal entity that healthcare providers form to offer a comprehensive set of healthcare services to a population. Other terms are health delivery network, horizontally integrated system, integrated services network (ISN), and vertically integrated system

question

Integrated provider organization

answer

Corporate, managerial entity that includes one or more hospitals, a large physician group practice, other healthcare organizations, or various configurations of these businesses.

question

Managed care

answer

Payment method in which the third party payer has implemented some provisions to control the costs of healthcare while maintaining quality care. Systematic merger of clinical, financial, and administrative processes to manage access, cost, and quality of healthcare

question

Managed care organization (MCO)

answer

Entity that integrates the financing and delivery of specified healthcare services. Characterized by (1) arrangements with specific providers to deliver a comprehensive set of healthcare services, (2) criteria for selecting providers, (3) quality assessment and utilization review, and (4) incentives for members to use plan providers.

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Management service organization (MSO)

answer

Specialized entity that provides management services and administrative and information systems to one or more physician group practices or small hospitals. An MSO may be owned by a hospital, physician group, physician-hospital organization, integrated delivery system, or investors

question

Medicare Advantage (MA)

answer

Optional managed care plan for Medicare Beneficiaries who are entitled to Part A, are enrolled in Part B, and live in an area with a plan. Types of plans available include health maintenance organization, point-of-service plan, preferred provider organization, and provider-sponsored organization

question

Network

answer

Physicians, hospitals, and other providers who provide healthcare services to members of a manged care organization. Providers may be associated through formal or informal contracts and agreements

question

Network model

answer

Type of health maintenance organization (HMO) in which the HMO contacts with two or more medical groups and reimburses the groups on a fee-for-service or capitation basis

question

Out-of-pocket

answer

Payment made by the policyholder or member

question

Per member per month (PMPM)

answer

Amount of money paid monthly for each individual enrolled in a capitation-based health insurance plan

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Pharmacy (prescription) benefit manager (PBM)

answer

A specialty benefit management organization that provides comprehensive pharmacy (prescription) services; PBMs administer healthcare insurance companies' prescription drug benefits for healthcare insurance companies or for self-insured employers

question

Physician-hospital organization

answer

Hybrid type of integrated delivery system that is a legal entity formed by a hospital and a group of physicians

question

Point-of-service (POS) healthcare insurance plan

answer

Plan in which the determination of the type of care, provider, or healthcare service is made at the time (point) that the service is needed

question

Preadmission certification

answer

Process of obtaining approval from a healthcare insurance company before receiving healthcare services

question

Preadmission review

answer

Process of obtaining approval from a healthcare insurance company before receiving healthcare services

question

Preauthorization

answer

Process of obtaining approval from a healthcare insurance company before receiving healthcare services

question

Preauthorization (pre-certification) number

answer

Control number issued when a healthcare service is approved

question

Pre-certification

answer

Process of obtaining approval from a healthcare insurance company before receiving healthcare services

question

Preferred provider organization (PPO)

answer

Entity that contracts with employers and insurers to render, a through a network of providers, healthcare services to a group of members. Members can choose to use the healthcare services of any physician, hospital, or other healthcare provider. Members who choose to use the services of in-network (in-plan) providers have lower out-of-pocket expenses than members who choose to use the services of out-of-network (out-of-plan) providers

question

Prescription management

answer

Cost-control measure that expands the use of a formulary to include patient education; electronic screening, alert, and decision-support tools; expert and referent systems; criteria for drug utilization; point-of-service order entry; electronic prescription transmission; and patient-specific medication profiles.

question

Prior approval (authorization)

answer

Process of obtaining approval from a healthcare insurance company before receiving healthcare services

question

Provider-sponsored organization (PSO)

answer

Type of point-of-service plan in which the physicians that practice in a regional or community hospital organize the plan

question

Second opinion

answer

Cost containment measure to prevent unnecessary tests, treatments, medical devices, or surgical procedures

question

Special needs plan (SNP)

answer

Form of Medicare Advantage (MA) plan for persons dually eligible for both Medicare and Medicaid, for institutionalized persons, or for persons with severe chronic or disabling conditions.

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Staff model

answer

Type of health maintenance organization (HMO) that provides hospitalization and physicians services through its own staff and facilities

question

Subcapitation

answer

Portion of capitated rate that is based to specialists for carved-out services

question

Third opinion

answer

Cost containment measure to prevent unnecessary tests, treatments, medical devices, or surgical procedures

question

Withhold

answer

Portion of providers capitated payments with managed care organizations deduct and hold to create an incentive for efficient or reduced use of healthcare services

question

Withhold pool

answer

Aggregate amount withheld from all providers capitation payment as an amount to cover expenditures in excess of targets

question

Characteristics of Managed Care

answer

Selection criteria for providers Delivery of continuum of care to population including health and wellness management Care management tools Coordination of care by primary care provider Evidence-based clinical practice guidelines Disease management

question

Characteristics of Managed Care

answer

Quality assessment and improvement Performance improvement activities NCQA URAC CAHPS® HEDIS® Member Satisfaction

question

Characteristics of Managed Care

answer

Service management tools Medical necessity review Utilization management Case management Prescription management Episode-of-care reimbursement Capitated reimbursement Global payment Financial incentives

question

NCQANational Committee for Quality Assurance; dedicated to assessing and reporting on the quality of managed care plan

answer

This is a private non-for-profit organization that assesses the quality of managed care plans in the U.S. and releases the data to the public.

question

HEDISHealth Plan Employer Data and Information Set--Contains managed care report cards, the national standards and performance reports on MCO

answer

Health plan Employer Data & Info Set; a tool compare the quality of care patients receive under plans; 71 measures across 8 domains of care; NCQA collects the data directly from HMO and PPO in XML format consists of secondary records and doesn't contain PHI; researchers allowed to use it for trends.

question

Describe the types of MCOs and pros and cons of each one.

answer

Staff Model HMOs

question

1. Staff Model HMOs

answer

employ health care providers directly. The providers are employees of the HMO and exclusively treat HMO members.

question

2. Group Model HMOs

answer

contract with one or more group practices to provide health care services, and each group primarily treats HMO members.

question

3 Network Model HMOs

answer

contract with one or more group practices to provide health care services, and some or all of the groups provide care to a substantial number of patients who are not HMO members.

question

4. Independent Practice Association (IPA) HMOs

answer

Independent Practice Association (IPA) HMOs contract with individual physicians or with associations of physicians that, in turn, contract with their member physicians to provide health care services. Most physicians in IPA model HMOs are in solo practice and typically have a significant number of patients who are not HMO members.

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