Term
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Definition
| the greater the number of exposures the more likely actual results will approach probably results |
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Term
| How Employee Benefit Plans handle possibility of catastrophic loss |
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Definition
| policy limitations; reinsurance; restrictions on insured groups |
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Term
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Definition
| Individuals who have higher than average risks join a group or comprise a larger % of a group than expected |
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Term
| How Underwriters handle adverse selection |
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Definition
| Spread of risks--include some higher risks with some lower risks; provisions such as pre-ex limits, suicide clauses, max coverage, OE period restrictions |
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Term
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Definition
| the method insurers use to select and classify applicants for insurance |
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Term
| Group technique for minimizing adverse selection |
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Definition
| Only certain groups eligible; steady flow of lives; minimum participants; eligibility requirements; max benefit limits; auto determination of benefits |
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Term
| Differences between self funding and insurance |
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Definition
SF: ER retains the risk
SF is based on law of large numbers |
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Term
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Definition
provide a set allowance for hospital and medical services; paid directly to provider; not for profit orgs; community rated; open to all seekers
BCBS is an example |
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Term
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Definition
| reimbursed set dollar amount to the Subscriber; for profit; not community rated; not open to all seekers |
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Term
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Definition
| Pay benefits from first dollar of incurred expenses; sub pays nothing; used in early hospital/med plans; not used much today |
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Term
| Hospital bills covered in health plans |
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Definition
| all services, supplies, and procedures provided and billed through a hospital |
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Term
| Early cost-sharing techniques |
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Definition
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Term
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Definition
| amount of covered medical expense to be paid by EE before the plan pays |
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Term
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Definition
| a % of total charges the EE pays once the deductible has been met |
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Term
| Arguments FOR deductibles and cost sharing |
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Definition
| lower utilization; reduction in costs; reduced premiums; create equity because amounts are based on personal usage |
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Term
| Arguments AGAINST deductibles and cost sharing |
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Definition
| may not reduce utilization because Drs make decisions, not EE; may discourage preventive care; can be a financial barrier |
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Term
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Definition
| often combined with first dollar plans; paid 2nd level of reimbursement when hosp/med benefits were exceeded or no covered; used deductibles and coinsurance; written as "all except" rather than "named Peril" |
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Term
| Comprehensive Medical Plans |
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Definition
| upfront deductibles and coinsurance applied to hosp/med services; an adaptation of major medical |
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Term
| Cost Control techniques in Comprehensive Medical Plans |
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Definition
| 2nd surgical opinions; full coverage for diagnostic; preadmin certification; utilization review; incentives for using outpatient facilities |
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Term
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Definition
1. Deductibles
2. Coinsurance
3. Copayments
4. EE contributions to premiums |
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Term
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Definition
| when a dependent child is covered by both parents' plans, the primary plan is the parent whose birthday occurs earlier in the year |
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Term
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Definition
| provides certain rights to ER or insurer in respect to claims that covered EEs may have against a negligent 3rd party |
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Term
| Advantage of Preadmin Testing |
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Definition
| Reduces number of in-hospital stays |
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Term
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Definition
| provides a lower level of care than acute care during latter days of hospital confinement |
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Term
| 5 Prevalent errors in hospital billing |
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Definition
| Pharmacy; Labs; Radiology; Inhalation Therapy; Occupational Therapy |
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Term
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Definition
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Term
| Differences between Managed Care Plans and Traditional Plans |
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Definition
| MC includes: routine physicals; preventive screenings; diagnostic test; prenatal and well baby; immunizations; vision and dental; health club membership allowances |
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Term
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Definition
1. Individual Practice (IPA)
2. Group Model
3. Network Model
4. Staff Model |
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Term
| Individual Model HMO (IPA) |
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Definition
| HMO contracts with individual doctors or associations |
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Term
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Definition
| HMO purchases services from independent multispecialty groups of doctors |
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Term
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Definition
| Group Model that includes more than one multispecialty practice |
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Term
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Definition
| Doctors are employed and paid a salary by the HMO (i.e. Kaiser) |
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Term
| Consumer Drive Health Plans (CDHPs) |
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Definition
| link to HD major medical plans; ER funded HRA; ER or EE funded HSA |
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Term
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Definition
| Offer rewards; offer discounts; offer incentives for behavior change |
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Term
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Definition
| All insureds in a geographical area pay a uniform rate; still used for individuals and smaller groups |
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Term
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Definition
| Baseline claims data used to establish rates in the community at large, but can received more favorable rates based on ERs past claims data |
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Term
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Definition
| based on past claims and utilization experience of the ER |
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Term
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Definition
| Used with cost-plus/self-insured; ER buys insurance that makes the payment if claims exceed certain predetermined amounts; can be aggregate or individual |
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Term
| Accountable Care Organizations (ACOs) |
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Definition
| Created by PPACA; a local healthcare org that is accountable for all aspects of care for a defined population of patients |
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Term
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Definition
| Provided federal initiatives to encourage creation of HMOs; DHS provided funding to startup HMOs; government began withdrawing funding under Reagan. |
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Term
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Definition
| As alternatives to compete with HMOs; were popular with ERs that wanted cost savings but were unwilling to reduce provider choice such as found in HMOs |
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Term
| Why did PPOs not realize cost savings for ERs? |
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Definition
| they were mostly discounted fee-for-service arrangements with little utilization control |
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Term
| How did PPOs respond to lack of cost savings? |
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Definition
| They increased utilization monitoring and implemented quality control |
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Term
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Definition
| Programs that are meant to influence and direct delivery of health care through plan design features, access restriction to specified group of preselected providers; and utilization management |
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Term
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Definition
| a Managed Care company's way of directing members to IN providers; accomplished by setting differentials between IN and OON care |
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Term
| Standalone Utilization Management programs |
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Definition
| Inpatient Precert; concurrent review; discharge planning; outpatient precert; 2nd surgical opinion; case management for high dollar cases |
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Term
| 3 Approaches to PPO Design |
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Definition
1. Incentive
2. Disincentive
3. Combination |
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Term
| Incentive Approach to PPO Design |
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Definition
| primarily to introduce a managed care company with the least EE disruption; richer benefits while maintaining existing benefit levels |
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Term
| Disincentive Approach to PPO Design |
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Definition
| primarily for cost savings; nonpreferred benefits paid at a lower % with a higher deductible |
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Term
| Combination Approach to PPO Design |
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Definition
| primarily to introduce a managed care plan with some improvements to benefits while saving money; preferred benefits set at higher level, nonpreferred set at lower level; deductibles adjusted to match higher and lower coinsurance |
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Term
| Key Components of POS Plans |
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Definition
| Hybrid between HMO and PPO; services only available through or coordinated by PCP (gatekeeper); choice of IN or OON providers, but required to elect PCP |
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Term
| POS Features that encourage care through a PCP |
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Definition
| No deductible; 100% coverage after small copay; preventive services; one gyno exam/yr; no claim submission; PCP directs care and obtains precerts |
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Term
| Key Distinctions between HMOs and PPO/POS Plans |
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Definition
| No coverage for care outside of HMO; benefits at reduced rates available OON in PPO and POS plans |
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Term
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Definition
| Rich benefits in exchange for exclusive use of HMO network and compliance with its reqs; no annual deductible; small office copays; comprehensive coverage; no claims forms; preventive care |
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Term
| Fundamental Components of Managed Care |
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Definition
| Some freedom of choice in providers; some steerage; claims handling; some external UM controls; referral mgtmt; provider reimbursement; balance billing; rating and financial methods |
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Term
| Exclusive Provider Organization (EPO) |
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Definition
| self-funded HMO; HMO can sponsor EPO or sell its network and UM services to a TPA; increasingly common today |
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Term
| Core Design Attributes of CDHPs |
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Definition
| High deductibles; HRA/HSA; info and decision making tools; conveniently accessible health coach/consultant; proactive medical professionals to assist with chronic conditions |
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Term
| How to Achieve Success in HDHP Implementation |
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Definition
| Educate EEs on costs of medical services; increase EE responsibility for decisions; provide clinical and financial info; proactive clinical management and coaching |
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Term
| General Plan Design Structure of HDHPs |
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Definition
| HD with HRA or HSA; 1st dollar coverage thru HRA or HSA funds; EE has full responsibility for difference between funds and deductible; coinsurance and copays apply after deductible |
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Term
| Federally Mandated Features of CDHPs |
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Definition
| No mandated features of the plan itself; federal law defines tax-favored HRA or HSA design; fed law has basic reqs for HSAs if they are to receive certain tax benefits |
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Term
| Funding or Plan Restrictions of CDHPs |
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Definition
| None; fully or self-insured; may be used with any type of underlying plan (PPO, HMO, POS) |
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Term
| Rules for Multiple Funding Accounts |
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Definition
| EE with HRA or FSA cannot make contributions or receive ER contributions to HSA; EE can contribute to HSA with a limited purpose FSA; HRA participant can have general FSA--ER plan doc establishes priority |
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Term
| Characteristics of Cafeteria Plan FSAs |
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Definition
| funded pre-tax by EE or ER; amount must be determined before beginning of plan year; use it or lose it; 2 1/2 month grace period to use balances; $500 roll over allowed if no grace period (doesn't count against max for following year) |
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Term
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Definition
| pre-tax contributions; tax free interest on earnings; tax free distributions for qualified medical expenses |
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Term
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Definition
| fully owned by EE; EE has unfettered access to funds; portability; can only be used with HDHP that meets specific criteria |
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Term
| Funding Contribution Limits |
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Definition
HSA: annual limits differ for ind/family; +$1000/yr for age 55+ and not enrolled in Medicare
HRA: no federal limits, but ER can limit
FSA: $2550 max as of 2016 |
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Term
| Funding Provisions for HRA, HSA, FSA |
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Definition
HSA: EE or ER, no limits
HRA: ER only, subject to ER-defined max, carryover if allowed by ER
FSA:EE or ER, $500 carryover or grace period |
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Term
| Restrictions on HSA Funding Reimbursements |
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Definition
| HSA: qualified medical; premiums while receiving UI; COBRA; Medicare (but not MSPs); ER retiree premiums; LTC premiums; LTC services |
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Term
| Restrictions on HRA Funding Reimbursements |
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Definition
| Qualified medical; premiums; LTC premiums |
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Term
| Restrictions on FSA Funding Reimbursements |
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Definition
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Term
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Definition
| excludable from gross income; not subject to FICA; distribution for medical not taxed; other distributions allowed but taxed (fed tax+20% but waived if medicare eligible, diabled, or die); no tax on distributions of excess contributions; earnings not taxable |
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Term
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Definition
| excludable from gross income; not subject to FICA; not subject to contributory limits; no earnings (ER sponsored notional accounts); distributions for qualified medical only |
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Term
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Definition
| HRAs and FSAs, but not HSAs |
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Term
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Definition
| ER distributions must be comparable for all participating EEs (if made thru cafeteria plan then subject to cafeteria plan nondiscrim rules instead) |
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Term
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Definition
| Subject to nondiscrimination rules if self-insured medical reimbursement plan |
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Term
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Definition
| Subject to nondiscrimination rules if self-insured; subject to cafeteria nondiscrimination rules, too |
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Term
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Definition
| applies to HRAs and FSAs, but not HSAs |
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Term
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Definition
| HSA must be held in a trust or custodial account; HRA and FSA do not |
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