Healthcare domain PPT
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Transcript of Healthcare domain PPT
EVOLUTION OF HEALTHCARE DELIVERY AND FINANCING
IN THE UNITED STATES
HMO ACT OF 1973Federal qualification requirementsDual choice provisionFederal development grants and loansExemption from state laws
INCREASE IN HEALTHCARE COSTS
Inflation
Rapidly expanding technology
Increase in medical malpractice lawsuits
Consumer expectations
Unnecessary treatment or defensive medicine
Lack of incentives to control medical costs
Technological factors
Maturing population
Access to services
COST SHIFTING
Practice of charging more for services provided to paying patients or third-party payers to compensate for lost revenue resulting from services provided free or at a significantly reduced cost to other patients is known as cost
shifting
BASIC CONCEPTS OF THE HEALTH PLAN INDUSTRYLoss rate- number and timing of losses that will occur in a given group of insured's while the coverage is in force
Antiselection
The tendency of people who have a greater-than-average likelihood of loss to apply for or continue insurance protection to a greater extent than people who have an average or less-than-average likelihood of the same loss.
Deductible
Annual minimum out-of-pocket expenses that member has to incur before he can claim
Coinsurance
Fixed percentage of costs that member has to incur
Co-payment - Small fixed fee for every visit
Pre-existing condition
A condition for which the individual received medical care during the three months immediately prior to the effective date of coverage Group policies usually also specify that a condition will no longer be considered pre-existing—and thus, will be eligible for coverage—if (1) the insured group member has not received treatment for that condition for three consecutive months or (2) the group member has been covered under the group plan for 12 consecutive months.
MANAGED CARE Traditional IndemnityComplete coverage, freedom-of-choiceCost varies by level of out-of-pocket payments (deductibles, coinsurance)No negotiated discounts with providersInsurer or purchaser at risk
HMO (Health Maintenance Organization)Care coordinated through Primary Care PhysicianLimited access to providersLow member out-of-pocket costsShift of risk to providers through alternative payment mechanisms (target budgets, capitation)
PPO (Preferred Provider Organization)Similar to indemnity programsTwo levels of benefits:Network (preferred) providers agree to provide services to covered individuals at a discounted fee in return for increased volume
Members pay more out-of-pocket to use non-preferred providers
Increasing risk to network providers due to discounted payments if increase in volume does not materialize
POS (Point-of-Service)Hybrid of HMO and PPO productsLike a PPO, two benefit levels:Enrollees select PCP who manages all in-network utilization, as in HMO
Members pay more for access to non-network providers, no PCP referral required
Constraint Indemnity HMO PPO POS
PCP Not required Required Not required Required
Deductible Required Not required (In-network) not required(Out-of-network) required
Same as PPO
Out Of Network Coverage
Available Not available Available Available
Referral for specialist visit
Not required Required Not required Required
Cost (1-5) 5 is max
5 1 4 3
Freedom (1-5) 5 is max.
5 1 4 3
Key Players in Managed Care Providers
Payers
Purchasers
Members
Utilization Management
Utilization management (UM) is a mechanism that involves managing the use of medical services so that a patient receives necessary, appropriate, high-quality care in a cost-effective manner.
UM Techniques
Demand Management
A series strategies designed to reduce the overall demand for and use of healthcare services by providing plan members with the information they need to make informed healthcare decisions
Utilization Review
An evaluation of medical necessity, efficiency, and appropriateness of healthcare services and treatment plans for a given patient
Case management
A system of identifying plan members with special healthcare needs, developing a strategy that meets those needs and coordinating and monitoring the delivery of necessary healthcare services
Disease management
A coordinated system of preventive diagnostic and therapeutic measures that focuses on management of specific chronic illnesses or medical conditions
Financing the managed care
FFS SALARYCapitation PER DIEMGlobal, Partial, Carve out WITH HOLDS
Discounted fee for service DRG
Fees schedule or capped fee RELATIVE VALUE SCALE
Health Plans and Products The Health Maintenance
Organization (HMO)
A health maintenance organization (HMO) is a healthcare system that assumes or shares both the financial risks and the delivery risks associated with providing comprehensive medical services to a voluntarily enrolled population in a particular geographic area, usually in return for a fixed, prepaid fee
Federal QualificationPreempted- State LawsCannot exclude pre-existing conditionsHad to offer certain services
In 1995, Fed Law eliminated the dual choice requirement for employer sponsored healthcare and exhausted federal grants
COA
Membership Membership-> Individually or Group Under group plan -> no contractual relationship with HP Open Enrollment period Delivery of Healthcare is primarily local
Comprehensive Care Basic medical Services + offer extensive preventive care programs. Prenatal care, well-baby care, routine physical examinations, 24-hour telephone line access to a nurse, and childhood immunizations
Networks Parameters in building a networkAccessCredentialingContractual relationship
Factors to determine no of primary care and specialist in a given areasize and location of the geographic service area network adequacy medical needs of its members employer or other purchaser requirements, including provider education, board certification, and work history
Before an HMO contracts with a physician, the HMO first verifies the physician’s credentials. Upon becoming part of the HMO’s organized system of healthcare, the physician is subject to recredentialing and ongoing peer review.
Requirements for a Hospital Accreditation from JCAHOState license
Ancillary Services
Financing in HMO Prepaid Care Negotiated provider compensation Stop loss provision- capitation- FFS beyond a certain point Capitation -> discrete ancillary services
Types of HMO Models Closed panel HMO X Closed access
Open panel HMO X Open access
Four models of HMOIPAStaffGroupNetworkDistinguishing factor is nature of contact relationship and reimbursement
Mixed Model-> characteristics of two or more
IPA
An independent practice association, or individual practice association, is a separate legal entity established primarily to give member physicians a negotiating vehicle for contracting purposes
Member physicians, who agree to adhere to the IPA/HMO contractual requirements, remain independent practitioners who manage their own offices and medical records and usually see other patients besides HMO members
Variation-> direct contract model HMO -> contracts directly with physicians
Closed panel IPA
Open panel IPA- non exclusive
Compensation->FFS, Capitation
Staff Model Closed panel Ambulatory care facility->” one stop shopping” Compensation->Salary
Group Model Contracts ->multi specialty group of physicians who are employees of grp practice Captive grp model Independent grp model Capitation
Network Model Contracts with more than one grp or physicians or specialty grps
PPO’s, POS Managed Indemnity PPO Specialty PPO EPO-> regulated by insurance companies POS Managed indemnity-? Pre authorization, Utilization management
Health Plans for Specialty Services
Specialty Services
Specialty services are healthcare services that are generally considered outside standard medical-surgical services because of the specialized knowledge required for service delivery and management.
Workers’ compensation Chiropractic care and other forms of complementary and alternative medicine Rehabilitation services Home healthcare Cardiac surgery Oncology services Care for patients with chronic diseases Diagnostic services, such as radiology and magnetic resonance imaging
Carve Outs Health plans often carve out specialty services that have one or more of the following characteristics: An easily defined benefit A defined patient population High or rising costs Inappropriate utilization
Specialty HMO DHMO DPPO DPOS
BEHAVIORAL HEALTHCARE Factors that fueled growth for behavioral healthcareGreater awareness and acceptance of behavioral healthcare issuesIncreased stress on individuals and families Increasing availability of services
MBHO is an organization that provides behavioral healthcare services by implementing health plan techniques MBHO’s use four different strategies to mange delivery of servicesalternative treatment levelsalternative treatment settings alternative treatment methods-> drug therapy, psycho therapy, counseling
crisis intervention Directing patients to appropriate carePCPCentralized Referral SystemEmployee Assistance Programs
Pharmacy Benefits plan Type of managed care specialty service that seeks to contain the costs of prescription drugs or pharmaceuticals while promoting more efficient and safer drug use
1. Services offered by PBMS
2. Physician Profiling
3. Drug Utilization Review
Formulary management:-is a listing of drugs, classified by therapeutic category or disease class
1. Open Formulary
2. Closed Formulary
Therapeutic substitution is the dispensing of a different chemical entity within the same drug class.
Generic substitution is the dispensing of a generic equivalent
Generic substitution can be performed without physician approval in most cases, but therapeutic substitution always requires physician approval.
PBM Plans Single tier plans Fixed copy for all types of drugs mentioned in the plan.Two tier plans Lower copay for Generic drugs Higher copay for Branded drugs Three tier plans Lowest copay for Generic drugs Medium copay for branded drugs Highest copay for Non formulary drugs
Provider Organizations
IntegrationStructural IntegrationOperational Integration
Structural IntegrationCommon ownership and Control (Mergers. JVs, Acquisition)
Operational IntegrationBusiness Integration – Combine one or more separate business functionClinical Integration – Making a variety of services available from one entity
Advantages of IntegrationGreater operating efficiency and effectiveness Improve providers’ contracting position with health plans
Provider Integration Models Physician Only modelIPAs (Least Integrated) Group Practices without Walls GPWW/ Management Services Org (MSO)Physician Practice Management (PPM) companyConsolidated Medical Group
Physician and Hospital modelPhysician Hospital OrganizationIntegrated Delivery Systems (IDS) /Medical Foundation (Most integrated)
Health Systems Management
Health Plan , StructureBasic ways of organizing a business Sole proprietership Partnership Corporation Separate legal entity Lives beyond the owners
Parent Company
Holding company
For Profit/ Not For profit
Stock/Mutual
Organizational Structure
Inside Director
Outside Director
ResponsibilitiesAuthorization of major financial transactions, including mergers, acquisitions, and capital expenditures
Appointment and evaluation of senior management, including the organization’s chief executive officer
Participation in corporate strategic planning Approval and evaluation of the organization’s operational policies and procedures Oversight of the plan’s quality management (QM) program, including review of the QM plan and feedback to the plan’s medical director and QM committee
Medical DirectorPhysician executive who is responsible for the quality and cost-effectiveness of the medical care delivered by the plan’s providers.
Network management Directordeveloping and managing the health plan’s provider networks authority over such activities as recruiting, credentialing, contracting, service, and performance management for providers
Corporate Compliance Directordedicated to overseeing compliance activities Appointment of a corporate compliance director
Committees Standing Committeelong-term advisory bodies on ongoing issues such as financial management, compliance, quality management, utilization management, strategic planning, and compensation
Ad Hoc Committeesspecial committees, are convened to address specific management concerns. Ad hoc committees are typically disbanded once the issue has been resolved. For example, a special litigation committee may be temporarily established to oversee a legal challenge regarding breach of fiduciary duty.
Network Structure and Management Market AnalysisMarket MaturityProvider CommunityCompetitive LandscapeEconomic Conditions Characteristics of the Service AreaPopulation CharacteristicsHealth Plan Characteristics Regulatory requirements
Network Structure and Management
Network StructureOpen PanelClosed Panel
Network CompositionPCPsSpecialistsHospitalistsHealthcare FacilitiesAncillary Service Providers
Network SizePlan CharacteristicsProvider Access (Staffing ratio, Drive time, Geographic availability)
Population CharacteristicsPurchaser & Consumer Preference (Quality, Access, Cost)
Plan Goals
Network Structure and Management Credentialing In-house/Third Party Credentialing AgenciesProviders have to submit forms along with supporting docsCheck for licensure, professional liability history, medical education and training, disciplinary history
Sources - State Medical Records, Court Records, National Provider Data Bank (NPDB)
Upon successful credentialing contract is negotiated with the provider
Re-credentialing for continuous monitoring once in 2 or 3 years
Contract Provisions - ProviderProvider ServicesAdministrative policiesCredentialing and Re credentialingParticipation in UM and QM programsMaintenance and submission of Medical records
No balance billing Requires providers to accept the amount the plan pays for medical services as payment in full and not bill plan members for additional amounts
Hold Harmless provisionForbids providers from seeking compensation from patients if HP fails to compensate the providers Bcoz of insolvency or for any other reason
Provider Manual
Incorporated by reference
Contract Provisions – Health PlanPaymentRisk Sharing and incentive ProgramsTimely PaymentEligibility Info
Termination provisionWithout cause-either the health plan or the provider may terminate the contract without providing a reason or offering an appeals process. The terminating party is often required to give notice of at least 90 days. With Cause-permitted by all standard provider contracts, occurs when one party does not live up to its contractual obligations, for example the provider fails to provide required services or the health plan fails to compensate the provider
Cure Provisionwhich specifies a time period (usually 60–90 days) for the party that breaches the contract to remedy the problem and avoid termination of the contract. due process clause which gives
providers that are terminated with
cause the right to appeal the
termination.
N/W Maintenance and Provider ServicesOrientationHealth plan give the providers an orientation or introduction to its systems and operations.
Peer ReviewEvaluation of a provider’s performance, usually by other providers who practice within that same medical specialty and within the geographic area.