Managed Care Concepts and Risk Management

Questions and Answers

What does MCO stand for?

Managed Care Organization

Health Maintenance Organization (correct)

Medical Care Organization

Health Care Organization

What does HMO stand for?

Health Maintenance Organization

Preferred Provider Organization (correct)

Personal Health Organization

Health Management Organization

What does POS stand for?

Point of Service

What is a CDHP?

Consumer Direct Health Plan Signup and view all the answers

What does IDS stand for?

Integrated Health Care Delivery System Signup and view all the answers

What is the fundamental concept used to spread risk in health insurance?

Pooling people's dollars into a single risk pool Signup and view all the answers

What are the three types of board risk bearing?

Government programs, Insurance, Self-funded programs Signup and view all the answers

What percentage of healthcare is paid for by government programs?

40% Signup and view all the answers

Government programs can be considered entitlement programs.

True Signup and view all the answers

What does CMS stand for?

Centers for Medicaid and Medicare Signup and view all the answers

What are wraparound policies?

Policies that pay for what Medicare does not cover Signup and view all the answers

What is the FEHB?

Federal Employee Health Benefit Program Signup and view all the answers

What is individual health insurance?

Health insurance purchased directly from commercial companies Signup and view all the answers

What is the COBRA Act?

Allows individuals who have lost their job to maintain their participation in group health insurance Signup and view all the answers

What is self-funded insurance?

Insurance where large companies assume the risks of medical costs directly Signup and view all the answers

What are the two types of indemnity insurance?

Indemnity and Service Plan Signup and view all the answers

What does PPO stand for?

Preferred Provider Organization Signup and view all the answers

What is a point of service plan?

Plans that combine features of HMO and traditional insurance plans Signup and view all the answers

Study Notes

Managed Care Key Terms and Concepts

MCO (Managed Care Organization): A type of health maintenance organization aimed at managing cost, utilization, and quality of care.
HMO (Health Maintenance Organization): A managed care plan that typically requires members to use a network of doctors and hospitals.
POS (Point of Service): A hybrid insurance plan where members can choose between HMO and traditional insurance options at the time of service.
CDHP (Consumer Direct Health Plan): A health plan model that empowers consumers to make informed health care decisions.
IDS (Integrated Health Care Delivery System): Organized groups of providers that deliver a continuum of care.

Risk Management in Healthcare

Risk pooling is a fundamental concept that combines individuals' funds to distribute financial risk associated with medical costs.
Types of Risk Bearing:
- Government programs
- Insurance
- Self-funded programs

Government Programs

Government Funding Sources: Account for 40% of healthcare costs through programs like Medicare and Medicaid.
Entitlement Programs: Programs like Medicaid and Medicare, providing necessary benefits to eligible individuals.
CMS (Centers for Medicare and Medicaid Services): Federal agency overseeing Medicare and Medicaid programs.

Insurance Types and Structures

Insurance: Provides coverage for medical expenses with premium rates, co-payments, and limits on certain treatments.
Group Health Plans: Often offer better pricing due to tax advantages; include other benefits like life insurance.
Defined Benefit Insurance: Employer-sponsored insurance covering a significant share of costs with employee contributions.

Coverage and Policies

Wraparound Policies: Supplemental coverage for expenses not covered by Medicare, addressing high deductibles and limits.
Individual Health Insurance: Typically more expensive than group plans with less coverage; options available for young, healthy adults.
Insurer of Last Resort: Non-profit health plans offering guaranteed policies to applicants, often at higher costs.

Legislative Framework

COBRA Act: Allows recently unemployed individuals to retain health insurance from previous employers with a cost increase for up to 18 months.
HIPAA (Health Insurance Portability and Accountability Act): Mandates protections for health insurance coverage and privacy.

Risk Management and Financing

Self-funded Programs: Large employers can self-fund health plans, avoiding state premium taxes and mandated benefits by ERISA.
Third-party Administrators: Companies such as Blue Cross manage health plan activities at a reduced rate.

Managed Care Models

Payer-based Managed Care: Includes indemnity health insurance, providing coverage without network restrictions.
PPO (Preferred Provider Organization): Balances provider availability and cost, with credentialing processes for network inclusion.
POS Plans: Combine HMO and traditional insurance options, allowing member flexibility at varying costs.

Traditional vs. Managed Care

Traditional Health Insurance: Comprises indemnity and service plans, historically dominant but costlier since the 1970s.
Indemnity Insurance: Protects against medical expenses under outlined benefits, reimbursing subscribers directly.
Service Plans: Typically offered by Blue Cross, with few restrictions and direct provider reimbursement.

Current Trends and Changes

Managed Care Continuum: Incorporates various models reflecting shifts in healthcare administration and reimbursement strategies.
Risk Bearing: Differentiates between risk-bearing models (where insurance functions are included) and non-risk-bearing networks (focused solely on management).

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Description

Explore key terms related to managed care organizations and risk management in healthcare. This quiz covers important concepts such as HMOs, POS, and various risk-bearing programs. Test your understanding of how these elements work together in the healthcare system.