Nikki Study Guide

• A premium is the amount the patient pays their health plan (fixed, regularly paid monthly bill).
• A deductible is the amount a patient pays for services before insurance kicks in. This may not apply for all services. Deductibles apply towards OOP expenses.
• Coinsurance is the percentage/share of the cost that the patient pays for visits, medications, and services. Coinsurance kicks in after the deductible is met (e.g. a 20% coinsurance fee). Coinsurance applies towards OOP expenses.
• A copayment (copay) is a fixed amount you pay for a health care service. The amount can vary by the type of service received. You only pay the price of the copay for a visit. It’s applied before the deductible is even reached (think: always applied) (e.g. you pay $50 for an urgent care visit, year-round. Different copays apply for different kinds of visits. Copays apply towards OOP expenses.
• The out of pocket limit is the most you pay for a period before your health insurance pays 100% of the allowed amount. RARE.
• In-network and out-of-network refer to the relationship between health care providers and health insurance plans. In-network providers have a contract with the plan to offer services at a pre- negotiated or discounted rate. Out-of-network providers do not have a contract with the plan and can charge full price or a higher rate than in-network providers.
• Capitation is where providers are paid a set amount of money per patient per month. Physicians are paid on a salary instead of a fee for service basis. Think: pre-paid practice, e.g. Kaiser Permanente. The benefit of capitation is that it is LOWER COST compared to fee for service plans.
• Explain the structure of a prepaid group practice insurance model

  1. The patient or employer pays a fixed monthly fee to Kaiser (capitation fee).
  2. Kaiser has its own hospitals and its own Kaiser Medical Group providers that provide thecare. Kaiser physicians are paid via a salary rather than fee-for-service.
• Differentiate between an HMO and a PPO type of plan

  HMO: PCP is the gatekeeper. Must stay in network. Less costly. Smaller networkPPO: do not need to see a PCP to get a referral and can also see providers out of network. More expensive. Larger network.
• Staff model: the insurance plan hires its OWN physicians (NOT contracted) and owns its OWN facilities (e.g. Kaiser). Patient cannot go out of network.
• Group model: contracts a single group of physicians that provides all medical services to their HMO subscribers. Physicians are paid monthly per patient enrolled. Patient cannot go out of network.
• Independent practice organization: services are provided through a large panel of physicians throughout the community. The HMO pays the IPA (independent practice association) a fixed monthly fee. A little like private practice.
• Network model: contracts several physician groups and hospitals in a local area market. A group of physicians may see patients from other insurers in addition to the network’s HMO patients. This is the MOST COMMON model.
• An FSA is employer-owned and less flexible; withdrawals are not allowed and contributions cannot be rolled over to the next year.
• An HSA is controlled by an individual and is more flexible; withdrawals are allowed with a penalty and contributions can be rolled over to the next year.
• A monopsony is a system where you have a single payer for a service or resource and

  many buyers.
• Socialized healthcare involves a single buyer/payer, but that buyer also dictates how healthcare should be delivered and to whom. Canada govt does not dictate how services should be administered.
• Monopsony: Canada (govt is payer -> insurance company -> reimburses providers)

  Socialized healthcare: VA (govt pays for medical services but also owns operates and hires staff for VA hospitals.
• State the five organizing principles of US Healthcare

  1. Healthcare is a market commodity that is distributed according to how much $ you have
  2. Healthcare is not a right unless you over 65
  3. The way that medicine should be admin to pts should be in the power of the medicalprofession and not the govt
  4. Govt historically has a small role in healthcare
  5. Healthcare is not equitable – its accessible only if you can afford it
• Describe the Law of Declining Marginal Returns

  The more services you get, the more money you will spend but the less value you will get over time.
• Define the “technological imperative” and relate it to why the US does not adhere to the Law of Declining Marginal Returns in healthcare.

  Phenomenon where we put a lot of faith in technology and in things that are new bc we think new is better than what is existing. This makes us illogical to the law of diminishing returns. Example: PSA blood test (new – we thought it was better – but it wasn’t)
• State how the technological imperative in US healthcare can lead to worse outcomes for patients.

  Back to the PSA example, the false positives resulted in people being diagnosed and treated for cancer when they didn’t have it. This is harmful to the patient.
• which populations are eligible for Medicare coverage.

  1. Age 65 or older who have worked at least 10 years
  2. Younger adults with disabilities
  3. End stage renal disease/permanent kidney failure requiring dialysis or transplant
• Medicare part A is required and covers inpatient/hospital care.
• State the maximum days of care Part A provides for: hospital stays, skilled nursing facilities, and psychiatric hospitals.

  H: 1-90 per spell of illness + 60d lifetime reserve SNF: 100d per spell of illness after H stayPH: 150d lifetime maximum
• Define a “spell of illness”, and state when a spell of illness ends

  A spell of illness is a hospitalization for any reason. It ends when a patient is discharged or in a skilled nursing facility for 60 days.
• Part A has no premium but it does have a deductible

  Day 1-60: patient pays full deductible of up to $1,556 after which Medicare will pay for the rest. Day 61-90: patient will now pay $389/d for the 29 days.Day 91-150: the patient now dips into the lifetime reserve (no reset) and pays $778/d
• State under what criteria Medicare Part A will pay for Skilled Nursing Facility use:

  
  

  SNF: 100 days per spell of illness after hospital stay is covered.

  Day 1-20: patient has no co-insurance and Medicare pays for everything (0 cost to patient) Day 21-100: patient now pays up to 194/d and Medicare pays the rest.Day 101+: patient pays 100% & Medicare pays $0
• What criteria will Medicare Part A not pay for:

  Medicare will not cover long term care.

  Part A will pay for SNF if the care is required for healing or rehabilitation purposes. Patients must have spent a minimum of 3 days in the hospital for a related illness to be eligible. If a patient is in a SNF because they cannot care for themselves, Medicare will NOT cover. This is considered custodial care/nursing home.
• Terminally ill means that a physician has certified that the patient will not survive past 6 months AND the patient agrees to forego aggressive treatment measures.
• Medicare part A is financed through payroll taxes (paychecks)Medicare part B is financed through income taxes (income tax at the end of the year)
• How does the government make payments for patient services?

  The funds are sent from the Medicare trust fund to a third-party private company, which then pays your patient bills.

  Part A and B are very similar, but part B includes the “accepting assignments” portion
• State the services covered by Medicare Part B

  Medicare part B covers outpatient expenses

  Part B has a premium, copay, coinsurance unlike part A, and also deductible, like part A.
• Part B has a premium, deductibles, and copay much like regular insurance, but the costs for all are very low.
• Accepting Assignment: Medicare decides how much to pay providers for covered services. Most doctors accept the Medicare-approved amount for services Medicare covers, even if it’s less than they usually charge. If the doctor agrees to the approved amount, he or she is accepting assignment. A doctor who accepts assignment agrees to charge you no more than the amount Medicare has approved for that service. A doctor who participates in Medicare but doesn’t accept assignment can potentially charge you up to 15 percent more than the Medicare- approved amount.
• Not Accepting Assignment aka Balance Billing: A doctor who takes Medicare but doesn’t accept assignment can still treat Medicare patients but won’t always accept the Medicare-approved amount as payment in full. This means he or she can charge you up to a maximum of 15 percent more than Medicare pays for the service you receive. In this case, you’re responsible for the additional charge, plus the regular 20 percent coinsurance, as your share of the cost.
• Describe which of the two payment methods are more prevalent for physicians, and why.

  96% accept assignment. Medicare payment rates are 5% higher for those accepting assignment and its easier for physicians to bill Medicare directly to collect payment bs billing patients.
• Medicap is supplemental insurance. Patient elect to pay for it if they have trouble paying for all out of pocket costs from Parts A and B. Medigap also MUST cover 365d of lifetime hospital care if the patient uses all of Medicare’s Part A lifetime reserve. Medigap give them one more year of lifetime reserve.
• Adverse Selection: When patients know they are going to use more healthcare due to begin high risk, they will most likely buy Medigap, but the risk is unknown to the insurance company.
• Professional Standard Review Organization (PSRO’s): Denied payments for extra treatments that weren’t proven to be medically necessary