(other) Health Services Exam 2

What is the basic principle of the managed care model?

Improve coordination of health care and control health care spending in health insurance plans

Explain the traditional indemnity insurance model:

1. No relationship between insurer and provider

2. Patient is free to see whatever provider they want

3. Provider is free to charge whatever they want

What are problems with the traditional model?

1. Lack of coordinated care

2. High prices

3. High utilization

4. Patients may not be able to afford to pay provider and wait for reimbursement

Explain the managed care model:

Contract between the managed care organization and the provider gives MCO control over the patient-provider transaction

Where is managed care found?

1. Public insurance programs like Medicare and Medicaid

2. Private health insurance (both employer-sponsored and individual)

What are provider networks?

A group of providers under contract with an insurer

Why do providers join provider networks?

Being in a provider network guarantees patients for a provider, although providers typically receive lower reimbursement rates in exchange

How is a patient's choice affected in a provider network?

Choice of providers is restricted or incentivized

T/F Provider networks are always broad and cover most providers

FALSE - provider networks can be broad (cover most providers) or narrow (cover few providers)

T/F Narrower provider networks are lower cost

TRUE

Why are narrow provider networks lower cost?

1. Plans negotiate with providers to get lower reimbursement rates

2. Plans have fewer high-cost providers in the network

3. Premiums are based on enrollee's expected health care costs and patients who choose narrow network plans are healthier (adverse selection)

What are the pros of provider networks?

1. More patients for providers

2. MCO can exclude poor quality providers

3. MCO can exclude high cost providers

What are the cons of provider networks?

1. Less specialists/choice

2. Lower reimbursement for provides

3. Farther travel (possibly)

4. Long wait times due to low provider volume

5. Confusing to figure out who is in network

T/F If the hospital you visit is in network, then all the doctors, labs, etc. inside are also in network

FALSE - Even though the hospital you visit is in network that does not mean that the doctor who visits or lab used for tests is in network

What is the trend of provider networks in Medicare Advantage Plans?

1. Medium (43%)

2. Narrow (35%)

3. Broad (22%)

What population would be most interested in a narrow network plan?

Young, healthy individuals who are accepting of restrictions

What is a major issue in plans with provider networks?

Surprise bills

What can happen if a patient sees a provider out of network?

1. No coverage (patient pays full provider charges)

2. Higher cost-sharing for non-network provider

3. Balance billing

What is balance billing?

Patient is charged difference between insurance allowed amount and provider charges

How is balance billing removed from in network providers?

Health plan contracts require that the providers "accept assignment" so they cannot charge patients more than what the plan sets as price for service

How did the "No Surprises Act" affect emergency care received from out of network providers?

1. Patients pay in network cost-sharing rate

2. No balance billing

3. Insuer goes through arbitration process with provider to determine payment amount

How did the "No Surprises Act" affect non-emergency care received form out of network providers at an in network facility?

1. Protection only applies to some services

2. Patients pay in network cost-sharing rate

3. Balance billing prohibited in some cases and requires signed consent in other cases

4. Insurer goes through arbitration process with provider to determine payment amount

How did the "No Surprises Act" affect non-emergency care received from an out of network provider at an out of network facility?

No protections, so even if service is covered, out of network rates and balance billing apply

What fees were excluded from the "No Surprises Act"?

Ambulance fees - big contributors to surprise bills

What are the two ways that plans reimburse providers?

1. Fee for service

2. Capitation

What is fee for service?

The more you do, the more you get paid

What is the most common type of provider reimbursement?

Fee for service

T/F In some managed care models, providers trade lower FFS rates in exchange for being in the insurer's provider network

TRUE

Who is fee for service best for when patient is sicker

Doctor

What can be an issue with FFS?

Providers are incentivized to do more and it can become very expensive for the patient

What is capitation?

The more you do the less profit you make

Who mainly uses capitation?

Primary care physicians

How is capitation decided?

1. Capitation is a prospective per member payment for a specified time period

2. The amount of the payment may be based on past utilization, health status, age/gender, etc.

3. Payment may include labs and other costs

Who does capitation benefit more with sicker patients

Insurer

Assume that a physician's average cost per patient visit is $150. If the capitation rate is $60 per member per month ($720 per year), and the average patient uses 4 visits per year, how much money will the physician make per patient per year?

$720 - ($150)(4) = $120

If the physician instead is paid on a FFS basis and makes an average of $20 profit per visit, how many visits would it take to make the same profit as with capitation?

$120 / $20 = 6 visits

At the end of the year, if the average number of patient visits was 6 instead of 4, what would be the physician's net profit under capitation?

$720 - ($150)(6) = $180

If the average number of visits was still 4 but the average cost per visit was $175 instead of $150, what would be the physician's net profit under capitation?

$720 - ($175)(4) = $20

How are primary case managers/gatekeepers used in utilization management?

1. All health care must be accessed through the gatekeeper physician - usually a PCP

2. To see a specialist, the patient must be referred by the PCP or the MCO will not pay for the specialist visit

Why are gatekeepers not as common anymore?

Most states have some form of direct access to specialists law. Under these laws, patients must be able to access some types of specialists without PCP referral

What is prospective utilization review?

Review is done prior to obtaining the service (prior authorizations)

What is retrospective utilization review?

Review is done after the service is used. Can be for specific services, specific physicians, or specific provider groups

Why is utilization review used?

Improve quality or control costs

What are other techniques of utilization management?

1. Case management of high-cost patients

2. Disease state management

3. Practice guidelines

4. Education activities

What is case management of high-cost patients?

1. Patients with complex health care needs or high health care costs receive extra services to improve their health and/or lower costs

2. May involve a nurse or other health care provider employer by the managed care plan working with the patient or the patient's health care providers to provide more efficient and/or higher quality care

What is disease state management?

Similar to case management, except patients are selected due to having a certain disease

What are educational activities?

Ex: A letter to prescribers who prescribe higher cost drugs more often than peers in their specialty area

What are the different types of Managed Care Organizations (MCOs)?

From least to most $/ Most to least restriction:

1. Health maintenance organizations (HMOs)

2. Exclusive provider organizations (EPOs)

3. Point of service (POS) plans

4. Preferred provider organizations (PPOs)

Definitions and distinctions between MCOs are _____

FLUID

What are the characteristics of HMO?

1. No coverage for out of network providers

2. Primary care physician as "gatekeeper"

3. Providers financially at risk and payment is often capitation

4. In some HMOs, the HMO employs the providers

What are the characteristics of POS?

1. Patients can see out of network providers

2. Primary care physician as "gatekeeper"

3. Payment can be capitation

What are the characteristics of EPO?

1. No coverage for out of network providers

2. Can see specialists without referral

What are the characteristics of PPO?

1. Patients can see out of network providers but may pay more

2. FFS payment, with discounted rate paid to network providers

3. Providers not at risk

4. Emphasize utilization management

5. Can see specialists without referral

What MCO is the least expensive?

HMO

What MCO is the most restrictive?

HMO

What MCO is the most expensive?

PPO

What MCO is the least restrictive?

PPO

What are some payment system problems?

1. Capitation rewards providers for giving less care. Has lower costs but there are concerns about quality and patient dissatisfaction

2. FFS rewards providers for providing more care which leads to higher costs. The extra care could lead to better or worse outcomes for patients

What led to value-based health care delivery models?

Dissatisfaction with payment systems

What are the two value based health care delivery models?

1. Accountable care organizations (ACOs)

2. Patient-centered medical home (PCMH)

What is the basic principle of value-based health care delivery models?

Work with health care providers "behind the scenes" to incentivize them to control costs and improve quality

What is an ACO?

Voluntary contractual arrangement between different groups of health care providers who work together to reduce health care spending while improving quality of care

T/F Providers can only be in one ACO

FALSE - providers may be in more than one

T/F Patients enroll in an ACO

FALSE - ACOs are layered on top of a patient's insurance plan and patients are assigned to an ACO if their main providers are in an ACO

Who has been a big driver for ACOs?

Centers for Medicare and Medicaid services (CMS)

When are savings returned to the ACO?

If health care spending for patients assigned to an ACO is sufficiently reduced and the ACO meets designated quality measures

What is a shared savings program (SSP)?

ACOs agree to take responsibility for the quality and cost of Medicare FFS beneficiaries who are assigned to the ACO

ACOs earn (or lose) money based on:

1. Meeting minimum standards on quality measures

2. Having savings relative to projected costs for assigned beneficiaries

T/F ACO decides how to distribute any shared savings to their affiliated providers

TRUE

What 4 categories does CMS use for quality measures?

1. Patient/caregiver experience

2. Coordination of care/patient safety

3. Preventative health care

4. Health outcomes for at risk-populations

ACO vs HMO:

ACO

1. Falls under the value-based health care delivery model

2. Contractual arrangement between provider groups

3. Patients can go anywhere to receive care

4. Patients are retrospectively assigned to an ACO based on their main providers

5. Primarily FFS payment

6. ACO must meet quality measures to share in savings

HMO

1. Falls under the managed care model

2. Type of insurance plan

3. Patients often required to use in network providers

4. Patients prospectively enroll in an HMO

5. Use of capitation payment is common

6. Use of quality measures is optional

What are the 5 key components of a PCMH?

1. Comprehensive care

2. Accessible services

3. Patient-centered

4. Coordinated care

5. Quality and safety

Who determines whether a medical practice is considered a PCMH?

The National Commitee for Quality Assurance

If you are a provider, why become a PCMH?

Many public and private third-party payers provide financial incentives

What are the two types of consumer directed health plans?

1. High deductible health plans (HDHP)

2. Health savings accounts (HSAs)

What is the basic principle of consumer directed health plans?

Control health care and make patients more price sensitive

What are the characteristics of HDHPs?

1. Most health plans available through the ACA health exchanges are HDHPs and they are becoming more common in employer health plans

2. Premiums typically lower than other plans

3. Can be tied to an HSA if follow certain rules

4. ACA preventive care exempt from the deductible

Why do HDPHs work best for high income, healthy populations with good health literacy?

1. Need to be able to afford deductible

2. Be able to make an informed decision about when to see the doctor

3. If sick, will blow past deductible immediately

What are the characteristics of HSAs?

1. Allows for tax-free payment of eligible medical expenses

2. MUST be tied to a HDHP meeting the federal minimum deductible

3. Balances in HSAs can accumulate over time and can be used to save for medical expenses in retirement

How are HSAs different from flexible spending accounts (FSAs)?

In a FSA, money generally must be spent annually

What are the challenges with High deductible health plans (HDHPS)?

1. Can't afford deductible or trying not to use the money in their HSA

2. HDHPs reduce the use of both high value and low value care

What are the three types of public health insurance?

1. Medicare

2. Medicaid

3. Children's health insurance program (CHIP)

Who is eligible for Medicare?

1. Elderly (65+)

2. Disabled

3. Individuals with end-stage renal disease

Who is eligible for Medicaid?

Low income individuals

Who is eligible for CHIP?

Children

What are the different types of private health insurance?

1. Employer-sponsored

2. Individually purchased

What are the different types of employer-sponsored health insurance?

1. Fully insured

2. Self-insured

What is fully insured employer-sponsored health insurance?

Employer purchases health insurance from a health insurer for its employees

What is self-insured employer-sponsored health insurance?

Employer acts as insurer and pays for health care services of its employees

What is the trend in US health insurance coverage?

1. Employer

2. Medicaid

3. Medicare

4. Uninsured

5. Individual

6. Other

How does health insurance help people pay for health care services?

1. Limits amount paid to network health care provider for a covered service

2. Pays most of the cost of covered services delivered by network providers

Cost-sharing terms:

1. Deductible

2. Coinsurance

3. Copayment

4. Out-of-pocket limit (OOP)

Define deductible:

Patient pays full cost of covered services until deductible is met

Define coinsurance:

Percentage of cost of covered service

Define copayment:

Fixed dollar amount, regardless of cost of covered service

Define out-of-pocket limit:

Amount of patient spending after which patient no longer pays for covered services

Which cost-sharing terms reset at the start of plan year?

1. Deductible

2. OOP

What is charity care?

Gives people ability to pay for health care services

Who offers charity care?

Health care providers

Who funds charity care?

Public and private sources