Exam 2 Flashcards
0
Q
What is the function on insurance?
A
Method to guard against the financial risks in life
Pay small defined amount to avoid paying much larger amount in event of major loss
1
Q
How US population insured
A
53% private
32% public
15% uninsured
2
Q
4 principles of insurance
A
Risk is unpredictable
For large populations, risk can be predicted with some accuracy
Insurance transfer risk from individual to group through pooling of resources
Losses are shared by all members
3
Q
3 types of private insurance
A
Group
Self-insurance
Individual private health insurance
4
Q
Group insurance explain
A
Through employer Union or other professional organization
Large number in group so cost and risk distributed equally
State licensed
5
Q
Explain self insurance
A
Ex is large employer
Diversified enough such that can predict medical expenses
Assume the risk but don’t pay insurers a dividend
6
Q
Explain private health insurance
A
For about 7-12% of population
Costs $10000 to $25000 for individual per year
Cost can vary widely
7
Q
Define beneficiary
A
The “insured” covered under a health insurance plan
8
Q
Deductible
A
Fixed amount of money to be paid by the insured under a contact before benefits become available
9
Q
Premiums
A
Amount charged by insurer to insure against risk
Two types
- Experience rating - based on groups medical claims experience; different from group to group based on risks
- Community rating - risk spread among larger community; premium based in utilization; rate same regardless of age and gender; cost shifted from poor to healthy
10
Q
Trend in health insurance costs
A
From 2000 to 2010, costs for family insurance doubled
Increased financial burden on worker
Worker contribution saw greater overall increase
Premiums increase much faster than inflation and workers earnings
Worker contributes 20-30% of premium ( individual pays about $1000; family about $4000)
11
Q
Percent of covered workers enrolled in a plan with $1000 or more deductible
A
22-50%
All firms 31%
12
Q
Methods used to compensate during economic downturn
A
Reduced scope of benefits
Increased cost sharing
Increased workers share of premium
13
Q
Percentage of firms offering health insurance
A
Between 45 and 70%
14
Q
Retiree health benefits
A
Less and less firms offering this benefit over time
From 66% in 1988 to 26% in 2011
15
Q
Insurance and risk
A
Manage uncertainty about future utilization
Loss rate (claims paid to providers) - both number of losses and timing of losses
Must forecast - info to classify risk and to set premiums
16
Q
Define underwriting
A
Process of identifying and classifying the potential degree of risk represented by individual or group
Goal - determine group loss rate compared to the typical rate
Factors - size, composition, level of participation, level of benefits, occupational hazard, geographic location
17
Q
Anti-selection in underwriting
A
Aka adverse selection
Those with higher than average risk are more likely to need or seek insurance
18
Q
Indemnity plan
A
Reimburse insured without regard to the expense incurred
Fixed amount paid to beneficiary per procedure/day
Insured is responsible for paying provider
19
Q
Service insurance plan
A
Provides services to the insured
Pays hospital, physician directly except for deductible snd copay
20
Q
Regulation of health insurers
A
1. State Financial standards Market conduct Premiums Renew ability Hmo MCO and network arrangements Complaints remedies and appeals
- Federal
ERISA provisions
21
Q
ERISA provisions
A
Written document Disclosure requirements Fiduciary requirements Claims for benefits Remedies and enforcement Continuation coverage
22
Q
HIPAA Provisions for insurance
A
Pre- existing conditions
- if requiring treatment during previous 3 months
- wait limited to no longer than 12 months
- as long as no extended gap in health coverage when transitioning employment
Requires insurers to make all of their small group products available to any qualifying small employer regardless of claims experience or the health status of employees
Insurers must guarantee that coverage can be continued at end of the period of coverage
23
Q
HIPAA
A
Health insurance portability and accountability act
24
ERISA
Employee retirement income security act
1974
Protect workers from loss of benefits provided thru the workplace
Applies to most private employer benefit plans established or maintained by employer
Preempts state insurance laws
25
Health reform law - changes
- high risk pools
- assessment and reporting premium increase
- 80/20 rule - no more than 20% on admin costs
- end to lifetime coverage limits
- cannot rescind coverage based on health status
- eligible under parents plan until 26
- zero copay for certain preventative benefits
26
Health reform law initiatives
Create state insurance exchanges (two types - individual and small business)
Guarantee issue and renew ability
Modified community rating (geography, age and tobacco use)
Collaboration between HHS, states and insurers
Competition in exchanges
27
CMS what is it?
Centers for Medicare and Medicaid services
Part of HHS
Formerly health care financing administration
Spends $1 trillion a year (60:40 Medicare:Medicaid)
28
What does CMS do?
Assures Medicare and Medicaid run properly by states
Established policies for paying providers
Conducts research on effectiveness of treatments and financing and health care management
Assesses quality of health care facilities and services
29
Medicaid
Funded jointly by state and federal
Established 1965 part of social security act
Fed contributes 50-83%
States determine payment rates to providers
30
Who is eligible for Medicaid?
Based on monthly income and financial resources
Categorically needy -welfare status
Low income aged blind disabled
Medically needy - monthly income exceeds allowable maximum
31
Mandatory Medicaid groups
Low income with children
Supplemental security income recipients
Infants born to Medicaid women
Some Medicare beneficiaries
Children under 6 and pregnant women with income below 133% of federal poverty limit
Recipients of adoption assistance and foster care
32
Optional Medicaid individuals
Low income children
Low income women with breast or cervical cancers
TB-infected individuals with income at SSI
Institutionalized individuals with low income
Some blind aged disabled adults
33
Medicaid benefits
Federally mandated
```
Prenatal care
Vaccines for kids
Family planning services
Nurse-midwife services
Rural health clinic services
Pediatric and family nurse services
```
Each state can determine other benefits like vision and dental
Medicaid always payer of last resort
34
Medicaid Rx benefits
Provided by all states
High utilization population
States limited in ability to manage Rx utilization
May request nominal copayment but cannot deny
Medicare part d overrides this
35
Medicaid reimbursement
Providers must accept Medicaid payment as full payment
States can add nominal deductible copay or coinsurance
Cannot require copay for emergency or family planning services
36
Medicaid in 1990s
Rising costs 25% per year
Managed care attractive solution (fixed rates, capitation)
Waive some federal requirements
- mandatory enrollment in MCO
- matching federal funds for additional expenditures
37
CHIP
Children's health insurance program
Health insurance to uninsured low income children
Under age 18
Not currently eligible for Medicaid
Income below 200% of federal poverty limit
Must meet benchmark coverage (bc/bs option, state employees, Hmo)
38
What is PACE?
Program of all inclusive care for the elderly
Comprehensive prepaid healthcare devices
Waives certain requirements for long term care nursing facility
39
Medicare
1965 social security act
Hospital expense and medical expense to elderly and disabled
Must be 65
Chronic physical or mental disability
End-stage renal disease - need dialysis
40
Medicare part A
Covers hospital, nursing facility, hospice and some home health care
Funded mainly by payroll tax on employers and workers
Patients do have deductibles and co-insurance
41
Medicare part B
Covers doctor services, outpatient hospital, ambulance, medical supplies and equipment, diagnostic tests, physical therapists and some home health care
Voluntary enrollment
Premiums are means tested
42
Medicare part C
Medicare and managed care
1982 managed care introduced to Medicare (TEFRA)
1997 balanced budget act created part C
-increase organizations that can participate
Now called Medicare Advantage
43
Medicare A B and D reimbursement
Traditional fee for service
Delivered thru CMS
limited utilization management
Payment done by intermediaries or carriers
44
Medicare part C reimbursement
Delivered by health plans
Capitation and discounted payment
Includes utilization management
Case management
Integration and coordination
Preventative benefits
45
Media gap
Medicare supplement
Medicare A and B doesn't cover all expenses
Private insurance that reimbursed for out of pocket expenses
10 standardized policies that differ in price
46
Medicare part D
Prescription drug benefit
Plans control drugs on formulary
Use cost management tools
Maybe included in Medicare advantage program
Covers medical supplies associated with insulin injection
Has a must cover list (cancer, hiv, etc)
Rated based on quality and customer service (5 point system)
Must have medication therapy management program
47
MTM
Medication therapy management
Appropriate use
Reduce risk of adverse events
Could be a pharmacist
For those with 2-3 chronic diseases; taking multiple part D meds; and incur costs annually over $3000 in 2014
48
Payment - 2 functions
Determine methods and amounts of reimbursement in advance of delivery
Actual payments after services rendered
49
Methods of reimbursement
```
Bundled charges ( package pricing)
Cost-plus reimbursement
Resource based relative value scale
Prospective reimbursement
Diagnosis related groups
Ambulatory payment classification
Resource utilization groups
Home health resource groups
```
50
Few for service
Each service bilked separately
Charges set by provider
May be limited - usual and customary
May be discounted (PPO)
Drawback- provider induced demand
51
Capitation
Per member monthly payment to MD
paid in advance of services
MD agrees to provide specific services for specific length of time
Rates can be adjusted based on projected utilization
52
Resource based relative value scale (RBRVS)
Reimbursement based on relative value assigned to the service provided
Complex formula based on time, skill, intensity, geography and malpractice expense
Used by Medicare part B and HMOs
Goal to narrow gap between specialists and generalists
53
Cost Plus reimbursement
For inpatient care
Per diem reimbursement rate or per patient day rate (PPD)
Includes total operating costs plus portion of capital costs
Based on length of stay, service, cost of care
Retrospective method - rate determined after evaluating costs
54
Bundled charges. Package pricing
Related services grouped in one price
Reduces provider induced demand
55
Prospective payment system (PPS)
Criteria applied in advance to determine reimbursement amount
Used by Medicare part A
Examples - diagnosis teamed groups, home health resources group, resources utilization groups, ambulatory payment classification
56
Diagnosis related groups
For hospital inpatient services
Amount set prior to discharge (not per diem)
500 DRGs
57
Ambulatory payment classification (APC)
For hospital outpatient services
300 procedure groups
Bundled rate includes anesthesia, drugs, supplies and recovery
58
Resource utilization groups (RUGs)
For skilled nursing facilities
Case-mix method
Based on intensity of medical intervention and resources used
59
Home health resource groups (HHRG)
Fixed, pre-determined amount for each 60 day episode of care
Bills consolidated - 1 payment per patient
Medical equipment and drugs not included
60
Payment innovations
Never events
Pay for performance
Bundling hospital admissions
Accountable care organizations
Consumer directed plans (high deductible)
61
System before managed care
Direct access to any provider
Itemized billing by provider
Few controls over payment amount
Sickness coverage
Little wellness or prevention coverage
Insurers simply passive payer
62
Managed care organizations
Result of flaws with indemnity
Some still have FFS for certain services
63
Flaws with fee for service
Inefficient
Moral hazard
Over utilization of specialty care
Charges set artificially high
Provider induced demand
Physicians benefit financially by putting patients in hospitals
Caused premiums to increase
64
Characteristics of managed care
Integration of financing and delivery
Shared risk
```
Defined group of enrolled
Limits in provider choice
Utilization management
Financial incentives to providers for efficiencies
Accountably for performance (quality)
Coordination of benefits
```
65
Networks in MCOs
Includes MDs, hospitals and other providers that have contracted to deliver medical services
66
Primary care
Focus on preventative care
Treat routine injury and illness
Point of entry for most patients
Acts as gatekeeper and coordinator of care
67
Utilization management
Manage services so receive necessary appropriate high quality care in cost effective manner
Disease management
Utilization review
68
HMOs
Health maintenance organizations
Assumes both financial risks and the delivery risks with providing comprehensive medical care
Usually fixed prepaid fee
Must be licensed
69
IPA Model
Independent practice association model
Separate legal entity
Contacts with HMO
HMO pays IPA
70
Types of HMOs
IPA model
Staff model
Group model
Network model
71
Staff model HMOS
HMO employs providers
All services under one roof
Strictly managed
Less choice for patient
Not very common model
72
Group Model HMO
MDs employed by group practice
Practice paid by capitation method
HMO doesn't own equipment or facilities or pay salaries
Members have more choice
MDs more self managed
73
Preferred provider organization
```
Network of providers
Discounted fee for service payment
Networks not very restrictive
Providers don't assume much risk
Less utilization management
```
74
Point of service product
Hybrid between HMO and PPO
When need care patient decides between in or out of network care
In network cost less to patient
Freedom of choice
High admin costs
75
Types of health service professionals
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Physicians
Nurses
Dentists
Pharmacists
Chiropractors
Psychologists
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76
Places of healthcare
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Hospitals
Nursing homes
School clinics
Mental health facilities
Outpatient settings
```
77
What is an MD
Doctor of medicine
Medical treatment to intervene in effects of disease
Most are specialists
78
What is a DO
Doctor of osteopathic medicine
Emphasis on musculoskeletal system; correction of joints and issue
Most are generalists
79
Primary vs specialty care
Primary is
```
Point of contact with system
Acts as gatekeeper
Is longitudinal
Focuses on person as a whole
Trains others
```
80
Issues in medical practice
Training and supply
Medical liability
Consolidation and integration
Health reform
81
Advantages of specialists
Make more
Better hours
More prestige
Intellectual challenge
More technolory
82
Nurses
Largest group of health care professionals
Developed after world wars
Major caregiver of sick and injured
Need license to practice
Current shortfall (turnover and exit profession)
83
Physicians assistant
Part of team
Dependent relationship with supervising physician
Masters level training
Can do medical procedures
Focuses on disease
84
Allied health professionals
Technicians/assistants
Therapists/technologists
Health related areas
Manage integrated delivery systems
85
6 aims for improvement in health care systems
```
Safe
Timely
Effective
Efficient
Equitable
Patient centered
```
86
Chronic care model
Growing burden of chronic conditions
Need more primary care physicians
Public health policy on tobacco, physical activity, healthy eating
Patients need to be active participants in their care
Self management
87
Patient centered medical home
Patient has personal physician that has team that is responsible for the patients care
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Comprehensive care
Coordinated
Patient centered
Accessible
Quality and safety
Payment reform
```
88
PPACA
Patient protection and affordable care act of 2010
Obamacare
Goals - expand access, reduce costs, improve quality
89
PPACA reforms
2014 most need to have health insurance
If no employer coverage then can purchase they health care exchange
Also creates small business health insurance exchanges
Employers pay penalty if don't offer health insurance
Cannot deny coverage based on pre existing conditions
Cannot charge higher premiums based on health status or gender
Expands Medicaid to 138% of federal poverty level
90
PPACA impact on health insurance plans
Under 26 can be covered by parents
Limits on admin costs
Regulates premium rate increases
Eliminates coverage cancellation
Eliminates yearly and lifetime limits on benefits
Summary of benefits and glossary of terms
91
PPACA impact on Medicare
Part a - no payment for certain hospital re admissions
Part b - pay for preventative services and RBRVS ( less to MDs)
Part d - closes coverage gap by 2020
92
Coverage gap in Medicare part D
Reduces beneficiary rate from 100% to 25% in the gap
Pharm manufacturers will cover 50% of the costs
For generics Medicare will pay 75%
Also reduces amount where catastrophic coverage kicks in
93
PPACA impact on Medicaid
Expands eligibility
Federal govt covers most cost of expansion
Beginning in 2020 fed will cover only 90%
States can choose to participate
94
What is greatest health care expenditure
Hospital
Followed by doctor and clinic services
95
Two types of hospitals
Publicly owned - federal, state, local
Privately owned - voluntary, proprietary
Majority of hospitals are private non-profit
96
What is a non-profit hospital?
Exists for public good
Profits not distributed to any individual (no stakeholders)
Exempt from taxes
97
Types of hospital affiliation
Independent
Multi-unit chains
Teaching and non-teaching
98
Hospitals 1960-1980
Expanded
```
Advances in medicine
Specialized technology
Medical education
Professional nursing
Health insurance
Govt (hill burton and Medicare/Medicaid)
```
99
Hill-burton Act
1946
Federal construction and repair grants to states for new community hospitals
In return for funds hospitals must provide free care
100
Hospitals 1980s to present
Downsizing
```
Reimbursement (retro to prospective)
Economic constraints
Technology
Utilization controls
Social factors
Shift to outpatient services
```
101
ALOS
Average length of stay
Indicator of illness severity
Highest in federal hospitals
Declined because of payment type, technology and alternative settings
102
EMTALA
Emergency medical treatment and active labor act
1986
Forbids Medicare hospitals from dumping patients out of EDs - patients need to be at no risk
$50000 fine for non-compliance
Must try to communicate with non-English speaking patients
103
Sherman anti-trust act
Physicians and admitting rights
