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Flashcards in Payment Methodologies Deck (31)
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1
Q

Types of financial risk:

A

demand risk

volume (utilization) risk

2
Q

Demand risk:

A

Number of people who seek out the service

The more people that seek (demand) the service, the more the insurer (patients) will have to pay

3
Q

Volume (utilization) risk:

A

Type services are performed
Quantity of services performed
Length of time services are performed

4
Q

Procedure-based Payment methods:

A

Fee-for service (FFS)
Discounted fee-for-service
Fee schedule

5
Q

Risk profile for FFS?

A

Insurer bears it all: demand & volume

Provider has none

6
Q

Risk Profile for discounted fee for service?

A

Insurer still bears all demand and volume risk

Provider still bears almost none

7
Q

Fee schedule:

A

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

8
Q

Incentives of fee schedule:

A

Do more of certain codes, less for others
Still no incentive for quality
Some incentive for cost containment depending on fee schedule amounts

9
Q

Risk profile for fee schedule:

A

Insurer still bears all demand and volume risk
Provider begins to bear some volume risk if the fee schedule amounts are low such they do not cover the per visit costs of providing care

10
Q

Episodic payment methods

A

Per diem/per visit
Case rate
Diagnosis related group (DRG)
Capitation

11
Q

Per diem

A

Pays for ALL services provided in a given day

12
Q

Per diem risk profile:

A

No provider risk for demand (i.e., admissions)

Strong provider risk for volume of services provided each day/visit

13
Q

Case rate:

A

One payment from the insurer pays for the ENTIRE length of stay (LOS)
Not sensitive to patient acuity (illness)
Not sensitive to LOS

14
Q

Incentive for case rate:

A

Very efficient care: reduce LOS
If LOS is too long then will lose money
If do unnecessary procedures then will lose money

15
Q

Risk profile for case rate:

A

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

16
Q

Who bears the risk in care rate?

A
provider 
Is on the hook for:
Type of services provided
Quantity of services provided
Duration (LOS) that services are provided
17
Q

Diagnostic related group:

A

one payment for entire LOS

is sensitive to diagnostic group that patient falls into

18
Q

Difference between case rates and DRGs

A

DRGs provide some sensitivity to patient acuity

Allows higher payment for more complex patients

19
Q

Risk profile for DRGs:

A

same as case rate

20
Q

Capitation:

A

Payment is based on “per member per month” (PMPM)

Insurer pays PCP a flat rate per member per month

21
Q

Key concept of capitation:

A

Doesn’t matter if all 8,000 people seek care or none seek care, still receive $40,000

22
Q

Incentives for capitation:

A

Don’t see the patient!
Want to keep the patient OUT of your office
Prevention

23
Q

Risk profile for capitation:

A

Insurer bears essentially none for PCP services
Premiums must cover PMPM payments + profit target
Provider has essentially become the insurer
Bears demand and volume risk for those services

24
Q

Global capitation:

A

the primary care practice is paid one annual rate

25
Q

Incentives for global capitation:

A

Prevention: manage health of members
monitor chronic issues
cost effectively manage acute problems

26
Q

Risk profile for global capitation:

A

Practice is essentially the insurer
Insurer is simply is a premium pass-through
Bears ALL demand and volume risk (for ALL services)

27
Q

Global capitation and patient centered medical home:

A

Interdisciplinary management of the health of a patient population
Global capitation could be used as primary PCMH payment methodology

28
Q

Bundled payments (1)

A

1 provider (hospital) is paid for the care provided by multiple (PAC) providers

29
Q

Bundled payment (2)

A

1 provider (hospital) is put at financial risk for the care provided by multiple (PAC) providers

30
Q

Incentives for bundled payments:

A
Reduce discharges to PACs
If must discharge to a PAC, discharge to:
SNF vs. IRF
Home Health vs. SNF
Outpatient rehab vs. Home Health
Hospital to exert control over PACs
31
Q

Risk for bundled payments:

A

Insurer bears demand risk

Providers now share volume risk across different settings and over extended period of time