CHFP MODULE 1 CERTIFICATION TEST
isooaoopre-
determinedooamountoothatootheoopatientoopaysoobeforeootheooinsureroobeginsootooopayoofo
rooservicesoo-ooans--deductible
aoopercentageooofootheooinsuranceoopaymentooamountoothatooisoopaidoobyootheoopatient,oo
alongoowithootheooamountoopaidoobyootheooinsurer.oo-ooans--coinsurance
aooflatooamountoothatootheoopatientoopaysooatooeachootimeooofooserviceoo-ooans--
copayment
paymentooalsoooincludesooamountsooforooservicesoothatooareoonotooincludedooinootheoopati
ent'soobenefitoodesignooandooamountsooforooservicesoobalanceoobilledoobyooout-of-
networkooproviders.ooPaymentsootypicallyoodoesoonotooincludeoopremiumoosharingoobyoot
heoopatient.oo-ooans--Out-of-pocketoopayment
Theooamountoopayableoooutooofoopocketooforoohealthcareooservices,oowhichoomayooinclud
esoodeductibles,oocopayments,oocoinsurance,ooamountsoopayableoobyootheoopatientooforo
oservicesoothatooareoonotooincludedooinootheoopatient'soobenefitoodesign,ooandooamountsoo
"balanceoobilled"oobyooout-of-
networkooproviders.ooHealthooinsuranceoopremiumsooconstituteooaooseparateoocategoryoo
ofoohealthcareoocostsooforoopatients,ooindependentooofoohealthcareooutilization.oo-ooans--
Costoo(toootheoopatient)
Theooexpenseoo(directooandooindirect)ooincurredootooodeliveroohealthcareooservicesootooop
atients.oo-ooans--Costsoo(toootheooprovider)
Theooamountoopayableootoootheooprovideroo(orooreimbursableootoootheoopatient)ooforooserv
icesoorendered.oo-ooans--Costoo(toootheoohealthooplan/insurer)
Theooexpenseoorelatedootoooprovidedoohealthoobenefitsoo(premiumsooorooclaimsoopaid)oo-
ooans--Costoo(toootheooemployer)
Theoodollarooamountooaooprovideroosetsooforooservicesoorenderedoobeforeoonegotiatingooa
nyoodiscounts.ooTheoochargeoocanoobeoodifferentoofromootheooamountoopaid.oo-ooans--
Charge
,Theoototalooamountooaooproviderooexpectsootooobeoopaidoobyoohealthooplans/
payersooandoopatientsooforoohealthcareooservices.oo-ooans--Price
Anooorganizationoothatoonegotiatesoooroosetsooratesooforooproviderooservices,oocollectsoor
evenueoothroughoopremiumoopaymentsooorootaxoodollars,ooprocessesooproviderooclaimsoo
forooservice,ooandoopaysooproviderooclaimsoousingoocollectedoopremiumooorootaxoorevenu
es.oo-ooans--HealthooPlan/Payer
Anooentity,ooorganization,ooorooindividualoothatoofurnishesooaoohealthcareooservice.oo-
ooans--Provider
Occursoowhenooaoohealthcareooprovideroobillsooaoopatientooforoochargesoo(otheroothanooco
payments,oocoinsuranceooorooanyooamountsoothatoomayooremainooonootheoopatient'sooann
ualoodeductible)oothatooexceedootheoohealthooplan'soopaymentooforooaoocoveredooservice.o
oIn-
networkooprovidersooareoocontractuallyooprohibitedoofromoobalanceoobillingoohealthooplano
omembers,oobutoobalanceoobillingoobyooout-of-networkooprovidersooisoocommon.oo-ooans--
BalanceooBilling
Inoohealthcare,ooreadilyooavailableooinformationooonootheoopriceooofoohealthcareooservices
oothat,ootogetheroowithoootherooinformation,oohelpsoodefineootheoovalueooofoothoseooservic
esooandooenablesoopatientsooandoootheroocareoopurchasersootoooidentify,oocompareooando
ochooseooprovidersoothatooofferootheoodesiredoolevelooofoovalueoo-ooans--
PriceooTransparency
Theooqualityooofooaoohealthcareooserviceooinoorelationootoootheoototaloopriceoopaidooforooth
eooserviceoobyoocareoopurchasers.oo-ooans--Value
theooflowooofoomoneyoobetweenootheoopatient,ootheooinsurer,ooandootheooproviderooofoohe
althcareooservicesoo-ooans--RevenueooCycle
functionoobetweenooaoohealthcareoofacilityoooroophysicianooandooanooinsurerooisoooneooofo
otheoomostooimportantooresourceoomanagementoochallengesooinootoday'soohealthcareooin
dustry.oo-ooans--BillingooandooCollection
Anooolderootermoousedootooodescribeoopaymentoobyooanooinsurerootoooaoohealthcareoofacil
ityoooroophysician.ooThisootermooisoousedoobecauseooaoophysicianoooroohealthcareoofacility
ooprovideroorenderooservicesootoooaoopatientooandoothenoosubmitsooclaimsooaooclaimootooo
anooinsurer.ooTheoohealthcareoofacilityoooroophysicianoowaitsooforooprocessingooofoothatooc
laimoobyootheooinsurer,ooandooultimatelyoorecievesoopayment,ooaoodeterminationooofoopay
mentooorooaoodenialoobyootheooinsurer.ooTodayooitooisoomoreoocommonootooouseootheooter
moopayment.oo-ooans--Reimbursement
Theoopriceoosetoobyooaoohealthcareoofacilityoooroophysicianooforootheirooservicesooisooreferr
edootoooasoo-ooans--ChargesooorooBilledooCharges
,Theoochargesoobyooaoohealthcareoofacilityoooroophysicianoorepresentootheooretailoopriceooa
ndooareoousuallyoocompiledooinooaoopriceoolistingooknownooasoo-ooans--Chargemaster
aoocharge-
basedoopaymentoomechanismooinoowhichooaooproviderooisoopaidooeitheroolistoopriceoo(fulloo
charges)ooorooaoopercentageooofoochargesoo(fulloochargesoolessooaoodiscount)ooforootheoo
specificooservicesoorendered.oo-ooans--Fee-for-service
Whatoodoesoofeeooforooserviceoopaymentooprovides?oo-ooans--
moreoounitsooofooserviceooinooorderootoooreceiveoomoreoopayments.
WhyoodoooHealthcareooFacilitiesoosetooRetailoopricesoosignificantlyooaboveooratesooactuall
yoopaidoobyoocommercialooinsurersooorootheoogovernment?oo-ooans--
1.ooAccessootoooContractedooPaymentooRates.
-
Rareoonotooallooinsurersooparticipateooinooprovideroonetworksoothatoogiveoothemooaccessoo
tooocontractedoopaymentoorates.ooSomeooautoooinsurers,ooliabilityooinsurersoooroocompani
esooprovidingootravelooinsuranceootooovisitorsoofromooabroadoostilloopayooaooprovider'sooful
loocharges.
2.ooPercent-of-ChargeooContracts
-Inoomarketsoowithoolittleoocompetition,oopercent-of-
chargeoocontractsooareoostilloocommon.ooTheoohigherootheooprice,ootheoohigherootheooperc
ent-of-
chargeoopayment,oounlessootheoocontractoolimitsooaooprovider'sooannualoopriceooincrease
s.
3.ooOutlierooProvisions
-
Someooinsuranceoocontactsoocontainooanoooutlierooprovisionoothatooentitlesooprovidersooto
ooanooadditionaloopaymentoo(aoolump-
sumoopaymentooorooaoopercentageooofooactualoochargesooaboveooaoothreshold)ooforooparti
cularlyoosickooandoohigh-costoopatients.
WhatooisootheoouseooandoobenefitsooofooCostooBasedooPayments?oo-ooans--
Theooonlyoouseooofoothisoomethodootodayooisooinooaoolimitedoosetooofoosmall,ooruraloohealth
careoofacilitiesooknownooasoocriticalooaccessoohospitals.ooThisoomechanismoohasoorarelyoo
beenoousedooforoophysicians.ooCost-
basedoopaymentoocallsooforootheooinsurerootooopayootheoohealthcareooprovideroobasedooo
nootheoocostsooofooprovidingooservices,oowithooaoonominalooallowanceooforoomargin.
WhatooisootheooMedicareooprogramoobeganoowithooaoopaymentoomechanismootooohealthc
areoofacilitiesoothatoohasoosinceoobeenoonearlyooeliminatedoofromootheoohealthcareooindus
tryoo—oo-ooans--CostoobasedooPayment
Whichooofootheoofollowingoowouldoobenefitootheoomostoofromooaoocost-
basedoopaymentoomethod?oo-ooans--Theoohealthcareooprovider
, That'sooright!ooLet'soounderstandoohow.
Theoopaymentoomechanismooisooadvantageousooforoohealthcareooproviders,ooasoothereooi
sooaoohigheroolikelihoodoothatooalloocostsoowilloobeoopaid,ooandoothereooisoonoooincentiveoot
ooobeooefficientooinooprovidingoocare,oosinceoocostsoowilloobeooreimbursedoobyootheooinsur
er.ooTheoorapidooescalationooofoohealthcareoocostsooinootheooU.S.ooafterootheoostartooofooc
ost-
basedoopaymentooinooMedicareooandooMedicaidooprogramsooledootoootheooimplementatio
nooofootheooProspectiveooPaymentooSystemoo(PPS)ooofoopayingooacuteoocareoohealthcare
ooprovidersooforooinpatientooservicesooinoo1983ooandoooutpatientooservicesooinoo2000.ooSi
nceoothen,ooCMSoohasoointroducedooprospectiveoopaymentoosystemsooforoomostoootheroo
typesooofooinstitutionaloohealthcareooproviders
Cost-Basedoopaymentoodecreasedooneedooforooprovidersootooobeooefficient.
MountainsideooHealthooPlanooisooevaluatingooitsoopaymentooofoohospitalsooinooitsoocurrent
ooserviceooarea.ooItooisoolookingootoooreduceooitsoocostsooperoopatientooandoostabilizeooitsoo
overalloopaymentsootooohospitals.ooWhichooofootheoofollowingoopaymentoomethodsoowould
oobeooleastooeffectiveooforootheoohealthooplanootooomeetootheseooobjectives?oo-ooans--
Cost-basedoopayment
Youooselectedootheoocorrectooanswer.ooCost-
basedoopaymentooisootheooleastoopredictableoomodelooforooaoohealthooplanooandoohasooth
eoogreatestooriskooofooincreasedoocostoobecauseooitooisoodependentooonootheoohospital'soo
abilityootooomanageoooperatingoocosts.
Theootableoobelowooshowsootheoomethodsoorankedoofromoomostoopredictableootoooleastoo
predictable.
Whatooareootheoo5oomainootypesooofooprospectiveoopaymentsoousedooinootoday'soohealthc
areoomarket?oo-ooans--1.ooDRGoohealthcareooprovider
2.ooPerooProcedure
3.ooCaseoorateoo-oohealthcareooprovideroooroophysician
4.ooPeroodiemoo-oohealthcareooprovider
5.ooBundledoopaymentoo-oohealthcareooprovider,oophysiciansooandoopost-
acuteooproviders
Aoopaymentoobasedooonootheoopatient'soodiagnosisooisooknownooasooaoo-ooans--
(DRG)ooDiagnosisooRelatedooGroup
Whatooisootheoomostoowidelyoousedooinoopaymentsootooohealthcareooproviders.oo-ooans--
(DRG)'s
isooaooclassificationooofooaoodiseaseooorooinjuryoointooooneooofooapproximatelyoo750oodiffer
entoocategories.
Theooamountoopaidooisooaooflatoorateooperoodischargeooandooisooadjustedoobasedooon:
isooaoopre-
determinedooamountoothatootheoopatientoopaysoobeforeootheooinsureroobeginsootooopayoofo
rooservicesoo-ooans--deductible
aoopercentageooofootheooinsuranceoopaymentooamountoothatooisoopaidoobyootheoopatient,oo
alongoowithootheooamountoopaidoobyootheooinsurer.oo-ooans--coinsurance
aooflatooamountoothatootheoopatientoopaysooatooeachootimeooofooserviceoo-ooans--
copayment
paymentooalsoooincludesooamountsooforooservicesoothatooareoonotooincludedooinootheoopati
ent'soobenefitoodesignooandooamountsooforooservicesoobalanceoobilledoobyooout-of-
networkooproviders.ooPaymentsootypicallyoodoesoonotooincludeoopremiumoosharingoobyoot
heoopatient.oo-ooans--Out-of-pocketoopayment
Theooamountoopayableoooutooofoopocketooforoohealthcareooservices,oowhichoomayooinclud
esoodeductibles,oocopayments,oocoinsurance,ooamountsoopayableoobyootheoopatientooforo
oservicesoothatooareoonotooincludedooinootheoopatient'soobenefitoodesign,ooandooamountsoo
"balanceoobilled"oobyooout-of-
networkooproviders.ooHealthooinsuranceoopremiumsooconstituteooaooseparateoocategoryoo
ofoohealthcareoocostsooforoopatients,ooindependentooofoohealthcareooutilization.oo-ooans--
Costoo(toootheoopatient)
Theooexpenseoo(directooandooindirect)ooincurredootooodeliveroohealthcareooservicesootooop
atients.oo-ooans--Costsoo(toootheooprovider)
Theooamountoopayableootoootheooprovideroo(orooreimbursableootoootheoopatient)ooforooserv
icesoorendered.oo-ooans--Costoo(toootheoohealthooplan/insurer)
Theooexpenseoorelatedootoooprovidedoohealthoobenefitsoo(premiumsooorooclaimsoopaid)oo-
ooans--Costoo(toootheooemployer)
Theoodollarooamountooaooprovideroosetsooforooservicesoorenderedoobeforeoonegotiatingooa
nyoodiscounts.ooTheoochargeoocanoobeoodifferentoofromootheooamountoopaid.oo-ooans--
Charge
,Theoototalooamountooaooproviderooexpectsootooobeoopaidoobyoohealthooplans/
payersooandoopatientsooforoohealthcareooservices.oo-ooans--Price
Anooorganizationoothatoonegotiatesoooroosetsooratesooforooproviderooservices,oocollectsoor
evenueoothroughoopremiumoopaymentsooorootaxoodollars,ooprocessesooproviderooclaimsoo
forooservice,ooandoopaysooproviderooclaimsoousingoocollectedoopremiumooorootaxoorevenu
es.oo-ooans--HealthooPlan/Payer
Anooentity,ooorganization,ooorooindividualoothatoofurnishesooaoohealthcareooservice.oo-
ooans--Provider
Occursoowhenooaoohealthcareooprovideroobillsooaoopatientooforoochargesoo(otheroothanooco
payments,oocoinsuranceooorooanyooamountsoothatoomayooremainooonootheoopatient'sooann
ualoodeductible)oothatooexceedootheoohealthooplan'soopaymentooforooaoocoveredooservice.o
oIn-
networkooprovidersooareoocontractuallyooprohibitedoofromoobalanceoobillingoohealthooplano
omembers,oobutoobalanceoobillingoobyooout-of-networkooprovidersooisoocommon.oo-ooans--
BalanceooBilling
Inoohealthcare,ooreadilyooavailableooinformationooonootheoopriceooofoohealthcareooservices
oothat,ootogetheroowithoootherooinformation,oohelpsoodefineootheoovalueooofoothoseooservic
esooandooenablesoopatientsooandoootheroocareoopurchasersootoooidentify,oocompareooando
ochooseooprovidersoothatooofferootheoodesiredoolevelooofoovalueoo-ooans--
PriceooTransparency
Theooqualityooofooaoohealthcareooserviceooinoorelationootoootheoototaloopriceoopaidooforooth
eooserviceoobyoocareoopurchasers.oo-ooans--Value
theooflowooofoomoneyoobetweenootheoopatient,ootheooinsurer,ooandootheooproviderooofoohe
althcareooservicesoo-ooans--RevenueooCycle
functionoobetweenooaoohealthcareoofacilityoooroophysicianooandooanooinsurerooisoooneooofo
otheoomostooimportantooresourceoomanagementoochallengesooinootoday'soohealthcareooin
dustry.oo-ooans--BillingooandooCollection
Anooolderootermoousedootooodescribeoopaymentoobyooanooinsurerootoooaoohealthcareoofacil
ityoooroophysician.ooThisootermooisoousedoobecauseooaoophysicianoooroohealthcareoofacility
ooprovideroorenderooservicesootoooaoopatientooandoothenoosubmitsooclaimsooaooclaimootooo
anooinsurer.ooTheoohealthcareoofacilityoooroophysicianoowaitsooforooprocessingooofoothatooc
laimoobyootheooinsurer,ooandooultimatelyoorecievesoopayment,ooaoodeterminationooofoopay
mentooorooaoodenialoobyootheooinsurer.ooTodayooitooisoomoreoocommonootooouseootheooter
moopayment.oo-ooans--Reimbursement
Theoopriceoosetoobyooaoohealthcareoofacilityoooroophysicianooforootheirooservicesooisooreferr
edootoooasoo-ooans--ChargesooorooBilledooCharges
,Theoochargesoobyooaoohealthcareoofacilityoooroophysicianoorepresentootheooretailoopriceooa
ndooareoousuallyoocompiledooinooaoopriceoolistingooknownooasoo-ooans--Chargemaster
aoocharge-
basedoopaymentoomechanismooinoowhichooaooproviderooisoopaidooeitheroolistoopriceoo(fulloo
charges)ooorooaoopercentageooofoochargesoo(fulloochargesoolessooaoodiscount)ooforootheoo
specificooservicesoorendered.oo-ooans--Fee-for-service
Whatoodoesoofeeooforooserviceoopaymentooprovides?oo-ooans--
moreoounitsooofooserviceooinooorderootoooreceiveoomoreoopayments.
WhyoodoooHealthcareooFacilitiesoosetooRetailoopricesoosignificantlyooaboveooratesooactuall
yoopaidoobyoocommercialooinsurersooorootheoogovernment?oo-ooans--
1.ooAccessootoooContractedooPaymentooRates.
-
Rareoonotooallooinsurersooparticipateooinooprovideroonetworksoothatoogiveoothemooaccessoo
tooocontractedoopaymentoorates.ooSomeooautoooinsurers,ooliabilityooinsurersoooroocompani
esooprovidingootravelooinsuranceootooovisitorsoofromooabroadoostilloopayooaooprovider'sooful
loocharges.
2.ooPercent-of-ChargeooContracts
-Inoomarketsoowithoolittleoocompetition,oopercent-of-
chargeoocontractsooareoostilloocommon.ooTheoohigherootheooprice,ootheoohigherootheooperc
ent-of-
chargeoopayment,oounlessootheoocontractoolimitsooaooprovider'sooannualoopriceooincrease
s.
3.ooOutlierooProvisions
-
Someooinsuranceoocontactsoocontainooanoooutlierooprovisionoothatooentitlesooprovidersooto
ooanooadditionaloopaymentoo(aoolump-
sumoopaymentooorooaoopercentageooofooactualoochargesooaboveooaoothreshold)ooforooparti
cularlyoosickooandoohigh-costoopatients.
WhatooisootheoouseooandoobenefitsooofooCostooBasedooPayments?oo-ooans--
Theooonlyoouseooofoothisoomethodootodayooisooinooaoolimitedoosetooofoosmall,ooruraloohealth
careoofacilitiesooknownooasoocriticalooaccessoohospitals.ooThisoomechanismoohasoorarelyoo
beenoousedooforoophysicians.ooCost-
basedoopaymentoocallsooforootheooinsurerootooopayootheoohealthcareooprovideroobasedooo
nootheoocostsooofooprovidingooservices,oowithooaoonominalooallowanceooforoomargin.
WhatooisootheooMedicareooprogramoobeganoowithooaoopaymentoomechanismootooohealthc
areoofacilitiesoothatoohasoosinceoobeenoonearlyooeliminatedoofromootheoohealthcareooindus
tryoo—oo-ooans--CostoobasedooPayment
Whichooofootheoofollowingoowouldoobenefitootheoomostoofromooaoocost-
basedoopaymentoomethod?oo-ooans--Theoohealthcareooprovider
, That'sooright!ooLet'soounderstandoohow.
Theoopaymentoomechanismooisooadvantageousooforoohealthcareooproviders,ooasoothereooi
sooaoohigheroolikelihoodoothatooalloocostsoowilloobeoopaid,ooandoothereooisoonoooincentiveoot
ooobeooefficientooinooprovidingoocare,oosinceoocostsoowilloobeooreimbursedoobyootheooinsur
er.ooTheoorapidooescalationooofoohealthcareoocostsooinootheooU.S.ooafterootheoostartooofooc
ost-
basedoopaymentooinooMedicareooandooMedicaidooprogramsooledootoootheooimplementatio
nooofootheooProspectiveooPaymentooSystemoo(PPS)ooofoopayingooacuteoocareoohealthcare
ooprovidersooforooinpatientooservicesooinoo1983ooandoooutpatientooservicesooinoo2000.ooSi
nceoothen,ooCMSoohasoointroducedooprospectiveoopaymentoosystemsooforoomostoootheroo
typesooofooinstitutionaloohealthcareooproviders
Cost-Basedoopaymentoodecreasedooneedooforooprovidersootooobeooefficient.
MountainsideooHealthooPlanooisooevaluatingooitsoopaymentooofoohospitalsooinooitsoocurrent
ooserviceooarea.ooItooisoolookingootoooreduceooitsoocostsooperoopatientooandoostabilizeooitsoo
overalloopaymentsootooohospitals.ooWhichooofootheoofollowingoopaymentoomethodsoowould
oobeooleastooeffectiveooforootheoohealthooplanootooomeetootheseooobjectives?oo-ooans--
Cost-basedoopayment
Youooselectedootheoocorrectooanswer.ooCost-
basedoopaymentooisootheooleastoopredictableoomodelooforooaoohealthooplanooandoohasooth
eoogreatestooriskooofooincreasedoocostoobecauseooitooisoodependentooonootheoohospital'soo
abilityootooomanageoooperatingoocosts.
Theootableoobelowooshowsootheoomethodsoorankedoofromoomostoopredictableootoooleastoo
predictable.
Whatooareootheoo5oomainootypesooofooprospectiveoopaymentsoousedooinootoday'soohealthc
areoomarket?oo-ooans--1.ooDRGoohealthcareooprovider
2.ooPerooProcedure
3.ooCaseoorateoo-oohealthcareooprovideroooroophysician
4.ooPeroodiemoo-oohealthcareooprovider
5.ooBundledoopaymentoo-oohealthcareooprovider,oophysiciansooandoopost-
acuteooproviders
Aoopaymentoobasedooonootheoopatient'soodiagnosisooisooknownooasooaoo-ooans--
(DRG)ooDiagnosisooRelatedooGroup
Whatooisootheoomostoowidelyoousedooinoopaymentsootooohealthcareooproviders.oo-ooans--
(DRG)'s
isooaooclassificationooofooaoodiseaseooorooinjuryoointooooneooofooapproximatelyoo750oodiffer
entoocategories.
Theooamountoopaidooisooaooflatoorateooperoodischargeooandooisooadjustedoobasedooon: