U.S. Health Care System Latest Exam
2024
(Prospective) APCs - ANSWER Ambulatory Payment Classifications: 300 groups based on
procedure, outpatient services at hospitals/clinics, and bundled payment
(Prospective) DRGs - ANSWER Diagnosis Related Groups: 500 categories of diagnoses,
hospital inpatient services, bundled payment, and hospitals get to keep any leftover $
(Prospective) HHRGs - ANSWER Home Health Resource Groups: 153 groups based on pt
severity, functioning rehab needs, home health care, bundled payment for each 60 day episode of
care, and can be reassessed during the 60 day episode
(Prospective) RUGs - ANSWER Resource Utilization Groups: 44 categories based on intensity
of care needed, skilled nursing facilities, and per diem amount based on case mix
Basic Cost Formula - ANSWER Total Expenditure=Payment amount X Quantity Demanded
Capitation - ANSWER fixed monthly sum per enrollee
Concurrent - ANSWER Monitoring care while it is being provided; esp. inpatient care
Conventional (Indemnity) Insurance - ANSWER -Fee for service payment -Visit any
provider/hospital you want whenever you want (no referrals) -Usually responsible for premiums,
deductibles, and co-insurance (80/20)
Delivers Service - ANSWER Contract with physicians, hospitals, and other clinical services
Employers promote employees use of managed care organizations by... - ANSWER Paying
more towards the cost of employee
Fee for Service (FFS) - ANSWER -Services can be broken down into individual parts (x-ray) -
Each service is billed and paid for separately -Originally:fees were set by providers, insurers began to
limit reimbursements, providers began to request that patients pay the difference between the
insurance payment and the amount charged (balance bill) RISK: incentive for providers-induced
demand (rarely used, still used by providers [dentist])
Financing - ANSWER "Any mechanism that gives people the ability to pay for health care
services" - Negotiates premiums with employers
Gatekeeping - ANSWER Primary care physician coordinates/ refers care
HMO Act of 1973 - ANSWER -Reaction to escalating health care costs/expenditures -Provide
companies with federal funds to start new HMOs (employers who offered health insurance required
to offer and HMO option)
HMO Group Model - ANSWER -Contract with multispecialty group practice/hospitals -
Providers employed by practice (not HMO) -HMO pays capitation fee -High degree of control over
practice patterns
HMO Independent Practice Association (IPA) Model - ANSWER -IPA is a separate legal entity
from the HMO -IPA contracts with providers and group practices -HMO contracts with the IPA -IPA
pay physicians through a separate mechanism -HMO generally pays capitation fees to IPA
2024
(Prospective) APCs - ANSWER Ambulatory Payment Classifications: 300 groups based on
procedure, outpatient services at hospitals/clinics, and bundled payment
(Prospective) DRGs - ANSWER Diagnosis Related Groups: 500 categories of diagnoses,
hospital inpatient services, bundled payment, and hospitals get to keep any leftover $
(Prospective) HHRGs - ANSWER Home Health Resource Groups: 153 groups based on pt
severity, functioning rehab needs, home health care, bundled payment for each 60 day episode of
care, and can be reassessed during the 60 day episode
(Prospective) RUGs - ANSWER Resource Utilization Groups: 44 categories based on intensity
of care needed, skilled nursing facilities, and per diem amount based on case mix
Basic Cost Formula - ANSWER Total Expenditure=Payment amount X Quantity Demanded
Capitation - ANSWER fixed monthly sum per enrollee
Concurrent - ANSWER Monitoring care while it is being provided; esp. inpatient care
Conventional (Indemnity) Insurance - ANSWER -Fee for service payment -Visit any
provider/hospital you want whenever you want (no referrals) -Usually responsible for premiums,
deductibles, and co-insurance (80/20)
Delivers Service - ANSWER Contract with physicians, hospitals, and other clinical services
Employers promote employees use of managed care organizations by... - ANSWER Paying
more towards the cost of employee
Fee for Service (FFS) - ANSWER -Services can be broken down into individual parts (x-ray) -
Each service is billed and paid for separately -Originally:fees were set by providers, insurers began to
limit reimbursements, providers began to request that patients pay the difference between the
insurance payment and the amount charged (balance bill) RISK: incentive for providers-induced
demand (rarely used, still used by providers [dentist])
Financing - ANSWER "Any mechanism that gives people the ability to pay for health care
services" - Negotiates premiums with employers
Gatekeeping - ANSWER Primary care physician coordinates/ refers care
HMO Act of 1973 - ANSWER -Reaction to escalating health care costs/expenditures -Provide
companies with federal funds to start new HMOs (employers who offered health insurance required
to offer and HMO option)
HMO Group Model - ANSWER -Contract with multispecialty group practice/hospitals -
Providers employed by practice (not HMO) -HMO pays capitation fee -High degree of control over
practice patterns
HMO Independent Practice Association (IPA) Model - ANSWER -IPA is a separate legal entity
from the HMO -IPA contracts with providers and group practices -HMO contracts with the IPA -IPA
pay physicians through a separate mechanism -HMO generally pays capitation fees to IPA
