Assignment 2: Dropbox Assignment Current Trends and Issues in Managed Care Compe
ID: 460303 • Letter: A
Question
Assignment 2: Dropbox Assignment Current Trends and Issues in Managed Care Compensation and reimbursement models are another method of controlling access, cost, and quality in a managed care environment. An MCO doesn't have direct control over physicians or hospitals but through contractual agreements that set incentives for meeting agreed-upon standards, it can exert influence.
This week, you are required to write an essay on the following topics:
•Managed care hospital reimbursement
•Managed care provider reimbursement Using South University Online library (e.g. CINAHL) or the Internet, review at least two articles for each topic and write a review for each source of information. Use the following guidelines for developing your essay:
•Write a summary for each topic tying together the information learned about that topic.
•Analyze the market forces that would favor using one reimbursement method over another.
•Evaluate the key differences between different types of payment methodologies from the provider and hospital point of view.
•Evaluate the advantages and disadvantages of the payment methodologies reviewed from the provider and hospital point of view.
•Evaluate new payment methodologies resulting from the Patient Protection and Affordable Care Act (PPACA) and discuss future changes in reimbursement methodologies. •Compare and contrast each article to the information discussed in the course textbook.
Based on your understanding, create a 3- to 4-page Microsoft Word document that includes the answers to the questions for the above topics. Support your responses with examples.
Explanation / Answer
Today, consumers are busy with a host of choices for checkup insurance. Traditional protection, managed insurance, Preferred Provider Organization (PPO), Point-of Service (POS) plan, and staff-model, IPA-model, and person provider-model Health Maintenance Organizations (HMO), are all insurance products accessible or order by a host of payors including employers, trusts, insurance companies, HMOs, and TPAs. At the equivalent time, providers are being come near by these organizations wanting to convention for their multiple products. The result can be a morass of not easy to be aware of terms and agreements, which is too often missing for billing and collections to figure out. This editorial will explore the various payer-provider relations, and offer a quantity of contracting guidelines to hopefully diminish the perplexity.
Let's begin by set up the list of participants, and their incentive for contracting. On the spender side, there are 3 basic groups: HMOs (including POS), PPOs (generally counting self-funded employers), and IPAs (counting PHOs and large multispecialty groups). These groups have unreliable degrees of risk for checkup costs for a collection of enrollees, and are seeking to reduce those medical costs. This can be done either by transitory on a portion of their risk to one more party, or by taking the risk but effort to limit the amount of services used and the prices paid, and thus the cost. A fairly characteristic example is an HMO contracting for specialized services to an IPA through a capitation accord, after which the IPA attempts to confer favorable rates with its individual PCP and professional members. Here, the HMO has effectively accepted much of its risk to the IPA, while the IPA has minimize its price risk during contracting and will attempt to manage its exploitation risk.
On the supplier side, there are also 3 basic groups: hospitals, IPAs, and person practitioners (including ancillary service companies). These collection are willing to agreement with payors at discounted rates to get a flow of patients they would not or else receive. This implies that there is small if any motivation for a provider to contract with a person paying at discounted rates if the payer is reluctant or unable to "steer" patients from end to end financial or other incentives. This reason holds not only for traditional protection payors, but also for PPOs, employers, and workman's reward firms that do not offer their members an enticement for using an in-network source.
The Transactions
Based on product structure and member characteristics, there are 6 basic payer-provider dealings to be examined:
HMO
PPO
IPA/PHO
Hospital
1
2
3
IPA/PHO
4
5
N/A
Individual Practitioner
6
5
6
1. HMO-Hospital Transactions:
In these agreements, the HMO is characteristically seeking an hostile contracted rate (either per diems or a steep proportion discount), but is offering aggressive enduring steerage (limited benefits for out-of-network operation). On the surface, this is a moderately equal trade, and if the HMO has major membership and a limited network, it may in fact be that. If however, the HMO has partial membership, or is including every sanatorium in a market, then belligerent steerage does not really exist. Hospitals should offer per diems and discount relative to the level the HMO brings in the door. It is not the hospital's duty to make a start-up or small HMO price spirited for employers. As long as a hospital is a strong market being there in its service area, an HMO will call for that hospital in its provider net to draw employers and enrollees.
2. PPO-Hospital Transactions:
In these agreements, a PPO is naturally seeking a 15%-30% discount from charges in switch for placing a hospital in its chosen complex. Unfortunately for the hospital, it is habitually unclear as to exactly what person in that preferred network means. Unless the PPO offers enrollees a unambiguous incentive (e.g. a lower copay or deductible) to choose an in-network provider, there is no actual steerage of volume, and thus no motive for the hospital to offer a discount. A "true" PPO will not have a trouble agreeing to contract words to that effect, and in those cases the infirmary is making a logical trade. In addition, there should not be a trouble with contractual guarantee that patients will identify themselves as a constituent of that PPO at the time of permission through identification on their cover card. This will help prevent later ill-treatment of the hospital by so-called "silent PPOs."
3. IPA-Hospital Transactions:
Contracts flanked by an IPA and a hospital often take into explanation special conditions and considerations that may survive between a hospital and its checkup staff. Typically, the IPA has in use financial responsibility for a set of military that the hospital provides, and it is now in search of a discounted rate for those services. The hospital needs to be aware of that the physicians may control not only the IPA patient number, but also volume from non-managed mind patients. At the same time, the physicians must appreciate that an IPA is not inexpensively viable in the nonappearance of a hospital contract. IPAs classically seek steep discounts for outpatient services, and may also wish for the hospital to tender steep discounts to HMOs. As the IPAs turn out to be larger and more experienced, they frequently look to capitate the sanatorium, and thereby pass on some of the price and utilization risk before mentioned. When executing these agreements, the next items should be kept in mind:
4. HMO-IPA/PHO Transactions:
In these agreements the HMO is normally seeking to pass on risk to a group of physicians or a PHO during capitation. This may include risk for proficient services, (sometimes called a Part-B cap) or risk for nigh on all services (often called a full-risk contract). The type of deal is usually a function of the qualified strength of the HMO and the medical doctor group. The greater the relative might of the IPA/PHO, the more risk they can command, and the higher percentage of top they can receive.
5. PPO-IPA and Individual Practitioner Transactions:
For these agreements, IPAs and person Practitioners are grouped jointly because the IPA is classically just executing the agreement for its associate, and is not concerned in the claims submission and payment procedure (there are exceptions where an IPA may become caught up in claims repricing.) As in the PPO-Hospital conformity, the PPO is typically seeking either a 15%-30% discount, or contribution general practitioner a set fee schedule. Most fee schedules are a plagiaristic of either Medicare's RBRVS organization or the McGraw Hill system. For an person practitioner, these are usually "take-it or leave-it" type discussions. If the fee agenda is appropriate, there is an constituent of patient steerage, and the PPO has a burly local presence, then the contract is most likely acceptable. Physicians should have questions, but, about groups that "broker" their supplier lists or about the value of being in a "national" PPO. After all, how lots of enrollees living in California are look for a doctor in North Carolina?
6. HMO and IPA-Individual Practitioner Transactions:
These agreements are habitually either discounted fee-for-service or capitation arrangements. Primary care physicians (PCPs) are usually presented a capitation payment to offer all of a members essential care, and for management of their field care. Capitation rates are age/sex adjusted, and may also be familiar for copayments. When dealing straight with an HMO, a PCP can expect to be given an average cap payment of about $12-13 per member per month (PMPM) for a profitable member, and slightly over $20 PMPM for a Medicare associate. In most IPAs the PCPs have a stronger voice over reimbursement, and thus capitation rates tend to be $1-2 PMPM senior. Capitation "works" for a PCP when their board size approaches 100 members. Many HMOs and IPAs will offer a PCP with a fee-for-service equivalency pledge if their panel is slighter than that. In addition, because the PCP is taking operation risk, they should be adequate for a utilization extra at the end of the year.
HMO
PPO
IPA/PHO
Hospital
1
2
3
IPA/PHO
4
5
N/A
Individual Practitioner
6
5
6