GBA 1 - Study Guide Questions and Answers Rated A+

GBA 1 - Study Guide Questions and Answers Rated A+ What was the purpose of the Health Maintenance Organization Act of 1973? The health maintenance organization action of 1973 provided federal initiatives - consisted of federal grants and loans to organizations wishing to investigate the feasibility of "federally qualified HMO" How did the passage of the Health Maintenance Organization Act of 1973 affect the growth of HMOs? The government began to withdraw its funding during the Reagan administration. Smaller plans did not survive. Briefly explain why the preferred provider organization (PPO) concept was developed? PPO was sponsored by national insurance companies, third party administrators, BCBS plans, and hotel organizations. PPO gained quick popularity with employers that wanted cost savings but were unwilling to reduce provider choice as much that required HMOs Why didnt many employers realize long-term costs savings with PPO? Because they were primarily discounted fee-for-service arrangements with little focus on utilization control. What steps did PPO companies take to correct this problem? Increase the monitoring of utilization, implementing quality control and surveying member satisfaction. What do opponents of the PPO approach argue is the reason they are more expensive than HMOs? They argue that PPOs are weak form of managed care with rich benefits, making them more expensive than HMOs. Is there a universally accepted and used definition of managed care? There is no specific and uniformly accepted definition of the term "managed care" What is the definition of managed care provided in the text to include the broad range of managed indemnity plans, HMOs, PPOs, and PO plans? Managed care includes those programs intended to influence and direct the delivery of health care through: 1) plan design failure 2) Restricted access to a specified group of preselected providers 3) Utilization management programs Define the concept of steerage Is the managed care company's way of directing members to in-network providers. Commonly accomplished through setting benefit differentials between in-and out-of-network care between 10%-30%. It is critical to maximize financial results of managed care. Utilization Management (UM) prgrams 1) Precertification of inpatient admissions 2)Concurrent review of ongoing confinements for medical necessity 3)Discharge planning 4)Precertification for selected outpatient services 5)Second surgical opinion 6)Case management for high-dollar cases Incentive design of PPO plan Primary objective was to introduce a managed care plan with the least amount of employee disruption. It offered members richer preferred benefit while maintaining existing benefit levels for nonpreferred benefits. Ex.: 100% for preferred expenses, 80% for standard comprehensive medical plans Disincentive design of PPO Plan The primary objective was cost savings with preferred benefits equal to the prior plan and nonpreferred benefits being significantly reduced. Ex.: 80% preferred expenses. 60% higher deductible. Combination approach of PPO Plan Some improvement in benefits while at the same time saving money. Preferred benefits were set at a slightly higher level, for example 90%, and the non preferred benefits at a lower level, 70%. What is the key component of the point-of-service plan concept? The primary care physicians (pcp) is the key component of the POS concept, and preferred benefits are available only for care rendered by or coordinated through the member PCPs. The PCP acts like a gatekeeper to specialist care. The primary care generally is family practitioner, general practitioner, internist or pediatrician. What plan features are often included in POS plan to encourage care within the network through the PCP? 1) No deductible and 100% coverage after a small copay. 2)Preventive services when obtained through the member's PCP 3) One routine gynecological exam per year 4) No member claim submission when the PCP renders care or coordinates care within the network 5) The PCP directs medical care and obtains necessary precertifications for hospital confinements and referral care. What key distinction in level of coverage between HMOs and the PPO and POS plans? HMO - members receive no coverage for medical care or treatment outside of the network. PPO/POS - members can still obtain care out of network and receive benefits, though at a reduced rate. Basic features of an HMO HMO provide members with comprehensive benefits through an established provider network Members receive rich benefits (100% coverage) to exclusively use HMO 1)No annual deductibles and relatively small office visit copayments 2)Comprehensive coverage with minimal copayments 3) No claims forms or other paperwork to file 4) Preventive care, including well-baby care, immunizations and routine exams. Explain various models into which HMOs have evolved 1) Group model HMO - contracted with physicians/ link the group with various forms of financial risk sharing 2) Staff model HMO - Same as group model/Physcicians are paid salary rather per service to covered members. 3)IPA model/open panel model - Contracted with individual practice associations Exclusive provider organization (EPO) Self-funded HMO - HMO directly sponsors the EPO Why are traditional rehabilitation and return-to-work programs not the most effective devices (on their own) in controlling disability costs? Most of the control efforts for long-term disability start 3-6 months after an employee becomes disabled. Additional costs are incurring due to replacements. What techniques are now used by some insurers? Insurers have applied managed care techniques, particular utilization management, first used for health plans, to their disability insurance products. The most successful approaches employ a team approach, coordinate by a nurse consultant, starting from the onset of the disability. Fundamental components of the managed care spectrum that can be used to compare managed care plans with traditional fee-for-service comprehensive medical plans 1)Degree of freedom 2)Degree of steerage 3)Responsibility for claims handling 4)Degree of external utilization management controls 5)Referral management 6)Provider reimbursement methods 7)Whether the patient is responsible for any balance billing if actual charges exceed the amount the provider reimbursement. 8)Rating and financial methods The PPO value to purchasers lies in what it delivers relative to its cost 1)A contracted network with some level of discounts off of full charges and some provider credentialing. 2) Possibly some medical management features within the network, typically for an additional fee. What are PPOs expected to do as a new care models emerge that focus on preventative and primary care? Adapt their offerings to take advantage of market demands. What changes are likely to come to PPOs as a result of quality measurements that are part of the Patient Protection and Affordable Care Act of 2010 (PPACA) -Accountability and value -PPO will need to focus on how to improve quality and safety, decrease costs, keep healthy people in a state of good health, and overall wellness, improve chronic illness care, keep people from needing to use the emergency room (ER) unnecessarily, and provide access to community resources. Broad View of Employee Benefits Any form of compensation other than direct wages paid to employees Narrow View of Employee Benefits The employment relationship that are not underwritten or paid directly by goverment Categories that generally are considered to fall under a broad view of employee benefits -Legally required benefits (Old Age/Disability/Unemployment) -Payments for time not worked (lunch/vacations) -Employers share of medical and medically related benefits -Employers share of retirement and saving plan payments -Misc. Benefits (employee discounts, severance pay, education, child care) Why do firms have established employee benefit plans? -To attract and retain capable employees -Foster corporate efficiency, productivity, and improved employee morale. -Employees' welfare and social objectives Inland Steel Case Study Duty to bargain in good faith over wages also included insurance and fringes such as pension benefits. Event occurred in 1948. Explain the significance of the Taft-Hartley Act? The Labor-Management Relations Act, also called the Taft Hartley Act, sets forth the framework for good-faith collective bargaining over wages, hours, conditions and terms of employment and employee benefits. 3 Major federal tax advantages associated with employee benefits -Most contributions to employee benefit plans by employers are deductible as long as they are reasonable business expenses. -Employer contributions are generally not considered income to employees. -Certain types of retirement and capital accumulation plans, benefits accumulate tax-free to the employee until distributed. Why is the employee benefit mechanism an effective and efficient way of providing insurance coverage? -Convenient for employees -Dont need to search for individual coverage -Less expensive What is the starting point in the design of any employee benefit plans? Setting overall objective List the type of overall questions that should be addressed in setting benefit objectives -What benefits should be provided? -Who should be covered by the benefit plan? -Should employees have benefit options? -How should the benefit plan be financed? -How should the benefit plan be administered? -How should should the benefit plan be communicated? What is the functional approach of employee benefit planning? Application of a systematic method of analysis to an employer's total employee benefit program. Describe the reason why the functional approach is considered to be an appropriate approach for the effective planning, designing and administration of employee benefits Employee benefits are a very significant element of total employee compensation, and generally are very tax-effective way of compensating employees. Large labor costs. Identify and describe 3 types of compensation/benefit policies that employers may adopt -Average compensation/benefit policies - -High compensation/benefit policies - attract higher levels of management, technical and general employee talent. -Low compensation/benefit policies