GBA 1 - Study Guide
Why didnt many employers realize long-term costs savings with PPO? - CORRECT
ANSWER-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? - CORRECT ANSWER-
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? - CORRECT ANSWER-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? - CORRECT
ANSWER-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? - CORRECT ANSWER-
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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 was the purpose of the Health Maintenance Organization Act of 1973? -
CORRECT ANSWER-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? - CORRECT ANSWER-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? -
CORRECT ANSWER-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
What is the key component of the point-of-service plan concept? - CORRECT
ANSWER-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? - CORRECT ANSWER-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?
- CORRECT ANSWER-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.
Why didnt many employers realize long-term costs savings with PPO? - CORRECT
ANSWER-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? - CORRECT ANSWER-
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? - CORRECT ANSWER-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? - CORRECT
ANSWER-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? - CORRECT ANSWER-
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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 - CORRECT ANSWER-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 was the purpose of the Health Maintenance Organization Act of 1973? -
CORRECT ANSWER-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? - CORRECT ANSWER-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? -
CORRECT ANSWER-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
What is the key component of the point-of-service plan concept? - CORRECT
ANSWER-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? - CORRECT ANSWER-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?
- CORRECT ANSWER-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.
