CEBS GBA Exam 1

Name three features associated with a (CDHP) Consumer Driven Health Plan (Mod 4.1)

-High Deductible -Personal Spending Account -Availability of information tools for enrollees Goal is to encourage enrollees to be wise consumers of health care services by exposing to financial consequences of their choices. They emerged as backlash against managed care plans - intended to control costs and promote greater value in health care spending by shifting responsibility from insurers to consumers. Also they are a way to accommodate diverse consumer preferences.

What design options available for pharmacy plans? (Mod 6.1)

-Manage the benefit and adjudicate claims internally -Outsource benefit management to a health plan, PBM or TPA -Contract directly with pharmacies and adjudicate claims interally. In general, ER's with less than 15,000 members to not retain in house.

What factors influence cost for prescription drug benefits? (Mod 6.3)

1 = Demographics (Disease mix based on age/gender), 2 = Benefits, Copays, Formulary Design influence what is covered 3 = Drug cost/mix of branded coverage 4 = Utilization 5 = Costs charged by PBM 6 = Fraud 7 = Ability to manage costs Drug Mix = factor of preferred drug list; rebates may mitigate some cost if 100% of rebates returned to plan Preferred drugs initially may cost more, but should net out less than nonpreferred due to rebates and incentives Formulary = List of generic/brand drugs for optimum value

Common techniques to control pharmacy costs (Mod 6.3)

1 = Review design of benefits to see if they fit overall medical program (flat copays/no incr) 2 = Analyze experience to identify areas that need better management 3 = Reduce pharmacy network to smallest size w/o compromising access 4 = Offer mail service 5 = Promote generics 6 = Use/develop cost effective formulary 7 = Practice utilization management 8 = Physician profiling 9 = Educate and communicate to members the plan 10 = Anticipate financial impact of new drugs

Reasons why standalone prescription drug plan is popular (Mod 6.3)

1 = Under traditional medical plan, no discounts for prescription drugs - could pay as much as 10% above AWP - more expensive 2 = Detailed receipts not required for prescriptions - could not review condition effectively as done with PBMs 3 = Limited data for trend analysis prior 4 = No rebates or cost-savings programs

What are the factors contributing to rising cost of PDP? (Mod 6.2)

10-25% of ER's overall health costs -Increased Volume, mix and availability of products, cost increases by pharm industry. Direct to consumer advertising has increased the demand. -Demographics are aging -Targeting "Young old" for prevention -Substitute for other forms of healthcare Note: Biotechnology drug spending expected to account for 50% of future growth in drug prices (inflammatory, mult. sclerosis, cancer) - drugs made from living cells that treat disease

What aspects of cost sharing are relevant to CDHPs (Mod 4.1)

1: Annual Deductible is the amount paid out of pocket before services are covered by plan 2: After deductible is met, services are subject to plan's cost-sharing requirements (typ 20%) 3: Most plans have an Out of Pocket Maximum - max amount an enrollee must pay for covered services during a plan year before plan kicks in 100%.

Summarize Methods for Handling Risk (Mod 2.2)

1: Avoidance - does not take on risk/gets rid of 2: Control - attempts to prevent or reduce the probability/severity of a loss taking place 3: Retention - risk is assumed and paid for by the person suffering the loss 4: Transfer - one shifts the financial burden of risk to another party 5: Insurance - form of transfer which the financial burden is transferred to insurance company

Identify Steps in Applying Functional Approach (Mod 1.4)

1: Classify EE/Dep Needs & Objectives (in logical/functional categories) 2: Classify Categories of EE's to be protected 3: Analyze present benefits in terms of functional categories of needs/objectives, persons to benefit, and regulatory requirements 4: Determine any gaps or overlap in benefits from all sources in terms of functional categories of needs & the persons to be protected 5: Consider recommendations for changes 6: Estimate costs/savings from each recommendation 7: Evaluate alternative methods of financing for those recommended benefits (and existing ben) 8: Consider other cost-saving techniques 9: Decide upon appropriate benefits and methods of financing as a result of analysis 10: Implement Changes 11: Communication Changes to Employees 12: Periodically re-evaluate EBP

Describe concerns made by critics of CDHPs (Mod 4.1)

1: Consumers uneducated - unable to differentiate effectively between care 2: Potential for greater risk segmentation if CDHPs attract disproportionally favorable risks due to their lower premiums/higher cost sharing 3: Doubts exist whether CDHPs will actually reduce healthcare spending

Identify the ten professional treatment categories (Mod 5.1)

1: Diagnostic (Routine Oral Exams/X-Rays) 2: Preventative (Cleanings) 3: Restorative (Filings) 4: Endodontics (Root Canal) 5: Periodontics (Gums) 6: Oral Surgery (Wisdom Teeth Extraction) 7: Prosthodontics (Crowns, Bridges, Dentures) 8: Orthodontics (Braces) 9: Pedodontics (Children w/o all perm teeth) 10: Impantology (Impants) -In addition, typical plan includes provisions for palliative treatment (minimize pain w/anesthesia), emergency care, consultation

Why is the Functional Approach appropriate when planning, designing and administering Employee Benefits? (Mod 1.4)

1: EE Benefits Significant Element of EE Comp and are a Tax-Effective Way to Compensate 2: EE Benefit Represent Large Labor Cost, so ER's should effectively plan/cost-control 3: In the past, EE Benefits were adopted on piece-meal basis; helps to now fill gaps/overlap 4: Systematic Approach to planning helps to keep the EBP current, competitive and in compliance with updated requirements (ACA) 5: Benefits to be integrated properly together

3 Examples of Tax Advantages of Employee Benefit Plans (Mod 1.2)

1: Employer Contributions are Tax Deductible 2: Employer Contributions are not considered income to Employees 3: Certain Retirement Benefits Accumulate Tax-Free until distributed.

List the insurance reforms enacted by (ACA) the Affordable Care Act (Mod 3.5)

1: Expansion of eligibility of medical benefits under the federal gov't for low income individuals 2: Prohibition of denial of insurance benefits for physical or mental illness present before coverage began (pre-existing conditions) 3: Restrictions on variations in premium rates by insurers and tax credits/subsidies for low-income individuals purchasing individual coverage 4: Establishment of marketplace exchanges to standardize health care plans 5: Group health insurance mandates having direct/indirect impact on employer-sponsored.

What are the 3 types of savings options coupled with HDHP's? (Mod 3.2)

1: FSA's (Flexible Spending Accounts) - before plan year, elect a certain amount to be deducted on a pre-tax basis from check (not to exceed IRS limit of $2,650). Available throughout the year for qualified expenses - cannot be refunded for unused amount at end of plan year. 2: HRA's (Health Reimbursement Arrangements) - Employer Funded accounts established to pay health care expenses - not required by law to roll over unused contributions over plan year. 3: HSA's (Health Savings Accounts) - coupled with HDHP's. Owned by the EE and funded with tax-free contributions made by EE, ER or both. Unused contributions can be rolled over year to year. Penalties for money used for nonmedical expenses before Age 65.

Define common types of Employer Sponsored Health Plans (Mod 3.1)

1: HMO (Health Maintenance Organization) 2: PPO (Preferred Provider Organization) 3: POS (Point of Service Plan) 4: HDHP (High Deductible Health Plan) - linked to Tax-Advantaged Savings Account

Who covers dental? (Mod 5.1)

1: Insurance Companies (MetLife 12%) 2: BlueCross/BlueShield (11%) 3: Others, like State Dental Associations (Delta Dental: 31%), Self-Admin, etc

Define Needs/Exposures covered under EBP (Mod 1.4)

1: Medical Expenses (EE/Dep) 2: Losses due to Disability (Short/Long Term) 3: Death (EE/Dep/Retirees) 4: Retirement Needs 5: Capital Accumulation Needs/Goals 6: Needs for Unemployment/Layoff/Termination 7: Needs for Financial/Retirement Counseling 8: Losses from property/liability exposures 9: Needs for Dependent Care Assistance 10: Needs for Educational Assistance (EE/Dep) 11: Needs for Custodial-Care Expenses (LTC) 12: Other Needs/Goals (Stock Purchase Plan)

Describe characteristics of ideal insurable risk (Mod 2.3)

1: Must be large number of similar risks (law of large numbers) 2: Loss should be verifiable and measurable 3: Loss should not be catastrophic in nature 4: Chance of loss subject to calculation (avg frequency/severity) - adequate premium 5: Premium should be economically feasible - insured should afford premium/less than face value or amount of policy coverage 6: Loss should be accidental and unintentional from the insured's standpoint/control (moral)

Describe characteristics of group technique that enable life/health to be written as EBP by minimizing adverse selection (Mod 2.5)

1: Only certain groups are eligible 2: Steady flow of lives through the group 3: Minimum number of covered lives 4: Minimum portion must participate 5: Eligibility Requirements 6: Maximum Limits Imposed (prevent excess cov) 7: Conservative Guarantee Issue Amounts

Discuss the eight basic payment structures for all healthcare providers (Mod 3.6)

1: Per Time Period (Budget/Salary) - Salaried Physicians and Government Hospitals 2: Per Beneficiary (Capitation) - Managed Care Org payment non-EE physician 3: Per Recipient (Contract Capitation) - physician specialist services 4: Per Episode (Case Rates, Payment Per Stay, Bundled Payments) - Medicare's diagnosis related groups (DRGs) & resource based relative value scale (RBRVS) 5: Per Day (Per Diem, Per Visit) - payments for nursing facilities 6: Per Service (Fee for Service) - payments for physician services, dentists, medical equipment. Separate payments are often made for multiple services per day. 7: Per Dollar of Cost (Cost Reimbursement) - payments for critical access hospitals, gov't owned providers and nursing facilities. Payers typically pay a percentage of cost. 8: Per Dollar of Charges (Percentage of Charges) - method can be used by any provider type. Based on billed charges. -All correspond to division of financial risk b/w payer and provider. Financial risk gradually shifts from primarily being on providers when payment is per time period to primarily on payers when payment is per dollar of charges.

Describe differences between medicine and dentistry (Mod 5.1)

1: Physicians practice in groups while dentists are solo. 2: Dental care is preventative and routine (2+ times a year); many people don't visit doctor for years (only when symptoms present). 3: Dental treatment is elective and is sometimes is postponed. 4: Dental treatment never life threatening, charges can be discussed in advance. 5: Dental care often cosmetic. 6: Dentistry often offers variety of alternative treatments that are equally effective but vary in cost. 7: Dental expenses generally lower, budgetable 8: Greater emphasis on prevention in dentistry than in general medicine. Under ACA, dentist coverage is not essential benefit for adults.

Summarize impact of group health plans due to ACA (Mod 3.5)

1: Play or pay rules requiring medium/large ER's to offer health insurance to ACA-defined FT EE's or pay a penalty (must be affordable**) 2: Establishment of a list of essential health benefits 3: Elimination of lifetime maximums and the capping of out of pocket maximums. 4: Expansion of coverage for preventative services 5: Temporary tax subsidies to small employers who offer group health 6: New administrative/reporting requirements

Identify groupings of the ten dental procedures (Mod 5.1)

1: Preventative & Diagnostic 2: Minor restorative 3: Often combined with (2), includes major restorative work (prosthodontics), endodontics, periodontics and oral surgery 4: Orthodontic 5: Impantantology (typically excluded) -Pedodontic is in first two groupings

How does a PPO operate? (Mod 3.1)

52% of Covered Workers Enrolled; Designed in response to HMO criticism, allows limited benefits for care received out of the preferred network and requires no referral to see a specialist. If specialist is in-network, coverage may be similarly structured with copays under HMO. Outside network, cost is significantly higher.

Explain Concept of Replacement Ratio in terms of creating Retirement/Disability Plans (Mod 1.5)

A Replacement Ratio is a person's gross income after retirement, divided by his or her gross income before retirement. Should include SS, capital accumulation benefits as well as retirement plans.

Evaluate the impact of ACA on CDHPs (Mod 4.1)

ACA created uncertainty on CDHPs because of concern they would not meet minimum actuarial requirements of the act (package of min essential benefits w/act value of 60%) - 1/2 enrolled didn't meet min benefits. ACA also made regulatory changes - penalty HSA risen from 10 to 20% & over the counter meds cannot be used for reimbursement on flexible spending accounts. CDHPs still remain strong in post-ACA.

Define AWP, WAC and MAC (Mod 6.1)

AWP = Average Wholesale Price - assigned by drug manufacturer, reference price for all discounts paid to pharmacies and PBMs. WAC = Wholesale acquisition cost (average manufacturers price) - price at which wholesalers buy pharmaceuticals from manufacturers. MAC = Maximum Allowable Cost - of generic places a ceiling on reimbursement for generic medicine. Concept of Medicaid/Medicare by Centers for Medicaid/Medicare Services (CMS). PBMs and TPAs developed their own MAC to cover all generics - due to variety, may be average cost of all manufacturers AWPs, lowest AWP, or some derived formula.

State advantages/disadvantages of using insurance to fund an EBP (Mod 2.3)

Advantages: -Known Premiums (Budgeting) -Outside Administration (Handled by Insurance) -Financial Backing -Cost Management (Design Plans to limit cost) -Economy (Insurance more efficient/lower cost) Disadvantages: -Possible Additional Costs (Admin, Comm, Overhead, Premium Taxes) -Employee Satisfaction (Slow, Claim Denials)

What are advantages/disadvantages to lifetime deductibles in dental care (Mod 5.4)

Advantages: Avoiding the cost to the plan of accumulated dental neglect; must invest in own dental health as a condition of adequate coverage Disadvantages: Promotes early overutilization; once satisfied, no further value; introduces employee turnover as cost consideration; may result in adverse reaction if costs/premiums rise

How do payment methods affect delivery of healthcare? (Mod 3.6)

Affect whether, how and how much care is provided. Ex: Hospital Length of Stay, diagnostic imaging in phys offices, home health care visits, coordination among phys/hosp, etc.

Narrow view of Employee Benefits (Mod 1.1)

Any type of plan sponsored or initiated by Employees and Employers and engaged in providing benefits that result from the employment relationship and that are not underwritten or paid directly by the government; (Ex: Benefits excluded include those legally mandated - WC, SS).

What is the Functional Approach to Employee Benefit Planning? (Mod 1.4)

Application of a systematic method of analysis to an Employer's Total Employee Benefits Program. It analyzes the organization's EBP as a whole in terms of its ability to meet various employee's needs and to manage loss exposures within the overall compensation goals and parameters.

Describe arguments of flexibility in designing employee benefit plans as it relates to functional approach (Mod 1.5)

Argument 1: More flexibility EE has, more likely he or she will select a benefit that best meets needs/goals - thus, flexibility in plan design/options facilitates functional approach. Argument 2: Works against functional approach because some EE's may not recognize all their needs and leave some uncovered.

Which risk handling technique is mutually exclusive (Mod 2.3)

Avoidance - when you avoid a risk, you have no losses so there is no need for other techniques

Contrast PPO's vs POS' (Mod 3.1)

Both overlap significantly. Differences do include primary care provider requirement by POS but not PPO; lower copay amounts for preferred care in POS than in PPO; smaller network in a POS than PPO.

How do CDHP premiums compare to those of other plans? (Mod 4.2)

CDHP premiums generally lower due to 3 main factors: 1: Extent to which services are financed by out of pocket payments 2: Differences in health status among enrollees 3: Prices of services used by enrollees, conditional on health status.

Identify the affects CDHPs have on preventative and healthcare services (Mod 4.4)

CDHPs generate few/no reductions when use of preventative services are not subject to the deductible (Ex: Colonoscopy subj to ded, alternative option used). Reduce use of less clinically appropriate care - RAND's Health Insurance Experiment (HIE) conducted btw '71-'82 (analyzed effects of cost sharing on service us/quality of care/health), one study shows CDHP enrollment led to reductions in physician visits for acute and chronic conditions and high/low priority.

To what extent have tools been provided to CDHP enrollees? (Mod 4.5)

CDHPs intended to control costs by shifting responsibility of health decisions to consumer. Most disappointing area of movement, tools have been lacking. Few allow enrollees to compare cost and quality across hospitals - even less with physicians. Costs are based on averages and estimates are procedure based rather than episode based. Enrollees with chronic illness more likely to use tools.

Describe how CDHPs impact spending and describe the resulting reductions (Mod 4.4)

CDHPs reduce healthcare spending substantially beyond the first year - primarily in low and medium risks (healthier enrollees). This is primarily driven by reductions in pharmaceutical and outpatient expenditures. In drug utilization, concentrated on drugs with asymptomatic (carrier, no symptoms) conditions - hypertension, high cholesterol - only modest reductions w/chronic conditions. Outpatient utilization declined in med to high risks.

Define a combination dental plan (Mod 5.2)

Certain procedures on a scheduled basis while some are on a non-scheduled basis.

Summarize plan design dental care costs (Mod 5.4)

Change in deductible has the most significant impact on cost - as much as a 12% reduction can be had by increasing deductible from $50 to $100. Change in coinsurance has an affect as well, especially to restoration, replacement and orthodontic (represents 80-85% of claim cost). Inclusion of ortho is expensive as well.

Compare Compensation/Service Oriented Benefit Philosophy with the Needs-Oriented (Mod 1.4)

Compensation/Service: EBP comprised of primarily compensation, service or both. Level of benefits tied to salary or pay levels/years of service Needs Orientated: Focuses on Needs of EE's and their dependents

Describe concern of CDHP risk segmentation and summarize two ways in which it may occur (Mod 4.3)

Concern is development of CDHP's will generate greater risk selection since this product is more attractive to low-risk (healthier) enrollees - early experience did reflect this. Two ways it may occur: (Asymmetric info b/w insurer & enrollees) - insurers have incentives to design policies that will cause consumers to self-select into coverage based on their risk. (Low and High Risk Participants have different preferences for coverage).

What are 3 types of (DUR) drug utilization review programs? (Mod 6.3)

Concurrent = Occurs at Point of Service (Pharmacy); flags overuse based on clinical monitoring criteria programmed into PBM - too soon refills, duplicate claims Retrospective = Pharmacy Case Management - pharmacists review patient profile to determine compliance - can suggest alternative cost-effective therapies - therapeutic switching Prospective = Educating Physicians and patients on drugs/therapy

Broad view of Employee Benefits (Mod 1.1)

Considers Employee Benefits to be virtually any form of compensation other than direct wages paid to Employees (Ex: WC, Unemployment, State DI, SS, Vacation, Holidays, 401K/Retirement, Employer share of Medical, Severance Pay, Child Care, etc..)

Define Protection-Oriented Benefits (Mod 1.5)

Consist of Medical Expense Benefits, Life/STD/LTD Insurance - protect against serious loss exposures that could spell immediate financial disaster. As such, they have a relatively short probationary period due to the need of immediate coverage.

Define Accumulation-Orientated Benefits (Mod 1.5)

Consist of Pension Plans, Profit-Sharing, Savings, 401K, etc...which reward an Employee for long service with an Employer. Involve a longer probationary period since viewed as a reward - not a disadvantage for long-term employees.

How does dental technology affect plan design? (Mod 5.5)

Constantly evolving; Once new techniques officially recognized by the American Dental Association (ADA), generally are covered as any other service under the plan. New procedures are not so fast - must be accepted by ADA and have a proven track record of success - then are approved or tabled for further study. If approved, separate decision applies if procedure will be covered routinely.

Describe pre-determination of dental benefits (Mod 5.5)

Dentist prepares treatment plan that shows work and cost before services begin. Typically for non-emergency care that is over a specified level ($300). Carrier processes info to determine how much they will pay.

Examples of Questions that should be addressed when creating benefit objectives (Mod 1.3)

Ex: What benefits should be provided? Who should be covered? Should Employees have options? How should plan be financed? How should plan be administered? How should plan be communicated to Employees?

Compare premiums, contributions and deductibles of HDHP/HRAs vs HDHP/HSAs (Mod 4.2)

HDHP/HSAs tend to have lower premiums, lower employee contributions and higher deductibles than HDHP/HRAs. EE's own control of HSA, while ER controls HRA.

Distinguish between HRAs and HSAs with regard to the rollover provisions (Mod 4.1)

HRAs - ER's may choose whether to allow funds to accumulate year to year; can also choose to withdraw any unused funds after employment is terminated HSAs - regardless of ER/EE contributions, accumulate over time year over year

Distinguish between HRAs and HSAs with regard to the nonmedical use (Mod 4.1)

HRAs - nonmedical use not allowed HSAs - nonmedical use allowed, but penalized before age 65

Distinguish between HRAs and HSAs with regard to the annual contribution limit (Mod 4.1)

HRAs have no federal limit on contributions HSAs have a maximum allowable annual contribution limit

Distinguish b/w HRAs and HSAs with regard to the account funder (Mod 4.1)

HRAs may be funded only by the employer; HSAs may be funded by the ER, EE or both

Impact of making a plan Contributory on Employee Participation (Mod 1.5)

Impacts group as a whole - not everyone will elect due to cost. If participation is mandatory in a contributory plan, may create employee relations problem.

Describe (MBHO's) managed behavioral health care organizations (Mod 3.4)

In the 1980's, behavioral health was carved out by many insurance plans and contracted out to MBHOs. These are independent organizations - key objective of separation was to control costs through oversight of expenses (case management and early intervention). Future is uncertain given ACA's support of integrated/coordinated care rather than carveout.

Explain how changes in payment methods can have sweeping effects using examples from Medicare reform (Mod 3.6)

In the early 1980s, Medicare payment method was changed from paying according to hospital costs to pay for diagnosis related groups (DRG's). Payment to DRG's led to decreased hospital costs, shorter lengths of stay, reduced growth in medicare payment and even increases in hospital margins (also accelerated growth in outpatient/post-acute care). In the early 1990s, Medicare moved physician payment from per dollar of charges to per service - this change insulated Medicare from charge inflation but did not protect it from growth in service volume (over 8 years, grew more than twice as fast as spending for other services and was driven entirely by growth in volume).

Describe the history of prescription drug coverage (Mod 3.4)

In the early days, PDC was a small portion of overall health and such expenses were not covered. When coverage eventually became available, it was originally subject to same deductibles/coinsurance as office visits, lab work and other outpatient services. Today, it is traditionally carved out and administered by Pharmacy Benefit Managers (PBM's), these are TPA's contracted to process claims and reimburse pharmacies for dispensing drugs, as well as cost containment/disease management.

Contrast between an In-Network (Preferred) vs an Out-of-Network (Non-Preferred) Provider (Mod 3.3)

In-Network: Contract with individual's health insurance plan to provide services to the member at a discount (for increased volume). Some plans may have a tiered structure with varying out of pocket costs. Out-of-Network: No contract with insurance plan...when available, costs are considerably higher.

Describe Managed Care (Mod 3.1)

Insurance carriers have a role in steering health services/care while prepaying some portion of healthcare services. The managed care model (in the form of Health Maintenance Organizations - HMO's) all but replaced traditional indemnity plans.

Compare insurance mechanism to gambling (Mod 2.3)

Insurance is a mechanism to handling existing risk - gambling creates risk where one did not previously exist. Risk caused by gambling is 100% speculative, while insurance deals with pure risk. Gambling involves a gain for one party while insurance is a mutual sharing of any losses. The loser in the gambling transaction remains in a negative situation while the insured is financially restored in whole or part to prior condition.

How is insurance a mechanism for EBP's? (Mod 2.3)

Insured (EE/ER) pays money (premium) into a fund (insurance company). Upon occurrence of loss, reimbursement is provided to person suffering loss. Thus, risk has been reduced/eliminated and all who paid into the fund share the resulting loss.

Effect of firm size on CDHP / Enrollment trends on group/individual market (Mod 4.2)

Large firms more likely to offer CDHP than small/medium - enrollment has increased in both individual and group, but more rapidly in group.

How well do CDHP enrollees understand their plan features as well as control costs? (Mod 4.5)

Limited understanding, especially between salaried and hourly EE's. Faced barriers in costs, especially when seeking care of urgent problems, reluctance to discuss cost with doctors and inaccurate knowledge about what was covered. After meeting doc, felt had no ability to control costs.

What is a Formulary? (Mod 6.3)

List of preferred drugs by a health plan or PBM. Developed by Pharmacy and Therapeutics Committee (P&T) to treat conditions indigenous with insured population; designed to be cost effective - centers around brand. Effective to move patients to lower cost drugs and maximum rebate potentials. Drawback = constant communication b/w physicians and patients

Describe features of three-tier drug plan (Mod 6.2)

Lowest = Generics Middle = Preferred Highest = Non-Preferred/Non-Formulary

Enrollment trends in HDHPs with HSAs vs HDHPs with HRAs (Mod 4.2)

Many more firms offer HSAs (20%) than HRAs (7%). HRAs still remain attractive as they offer greater flexibility in product design due to less strict regulations (HSA linked to "qualified" HDHP) - accounts also act as savings account if EE switches plans/terminates.

Describe two main types of DSM programs (disease state management) and their criticisms (Mod 6.4)

Medical Model = Call Centers staffed by nurses to triage patients to appropriate levels of care Therapy Directed Model = Administered by PBMs, pharm manuf, health plans and disease management co's - improve compliance with medication therapy, education and testing -Critics say neither model has method to judge success and ROI - argue thinly veiled advertisements from drug manufacturers. Also say targeted diseases are easy to improve

Is risk selection among employer groups an issue for large or small employers? (Mod 4.3)

More an issue for large employers with multiple plans. Small employer likely to offer CDHP on a full-replacement basis.

How does non-scheduled dental plan operate? (Mod 5.2)

Most common, cover percentage of usual (reasonable) charges in the community. Set between 75%-90%, trend towards lower number. Typically include deductible during a plan year, reimburse at different levels - preventative/diagnostic at 100%, then scaled down based on plan for others. -Advantage: Uniform percentage of total cost; built-in adjustment for inflation -Disadvantage: Cost control, opportunities for modest benefit improvements limited, rarely clear in advance what payment of service is.

Describe orthodontics plan benefits (Mod 5.3)

Never written standalone. Properly treated, unlikely to reoccur, so written with lifetime maximums. No deductible - little consequence. Common coinsurance level is 50% - likely to be same level as major restorative. Paid in installments.

How are POS plans part of a hybrid between HMO/PPO plans? (Mod 3.1)

Offers in-network (preferred) and out of network (nonpreferred) benefits. Individual may need to select PCP to obtain referrals for in-network specialty care. Out of pocket expenses for in-network providers are copays (similar to HMO cost...slightly higher) - no need to file for reimbursement. For out of network, out of pocket expenses are not a flat dollar amount but a percentage (ex: 40% common) of fees.

Define Open, Closed and Preferred Formularies (Mod 6.3)

Open = Allow plan enrollees any covered prescription drug; most phys familiar with drugs they use most often, gives best chance to make better informed choices. List of preferred drugs distributed for informational use only. Preferred = Popular; incentivizes use of preferred or formulary drugs in return for reduced copay. Closed = plan does not cover non-formulary drugs (met with resistance from EE's); typically found in hospital settings and tightly managed HMOs - ERs do not use this type.

Describe the difference between "prior generation" prescription drug plan (PDP) within a group policy and the today's "carved-out" plan (Mod 6.1)

PDP used to be within major medical or sold as a rider to medical policy. Members submitted receipts to a claims administrator/insurance co and were reimbursed for prescription drugs in the same manner as for medical expenses, often subject to annual deductible and 20% coninsurance - EE paid full cost at pharmacy and then filed a claim. Today, carved out and administered by PBMs or TPAs. Offers discounts off pharmacy charges, claims admin and utilization reports. Also reduces costs through mail service and rebates for volume purchases.

How does scheduled dental plan operate? (Mod 5.2)

Pays fixed allowance for each procedure ($50 for cleaning); may include deductibles (small, maybe lifetime) -Advantages: Cost Control, Uniform Pay, Ease in understanding, employee relations -Disadvantages: Levels must examined routinely, plan reimbursement will vary in different locations according to cost in area, dentists may increase cost if scheduled benefits are set near maximum of reasonable.

Define relationship between peril and hazard (Mod 2.1)

Peril: Cause of a loss (fires, floods, theft, death) Hazard: Condition that increases probability that a peril will occur or tends to increase severity of loss when a peril occurs.

Most Important Type of Pure Risk (Mod 2.2)

Personal Risk (Death, Illness, DI, Unemployment)

Define physical hazard, moral hazard, morale hazard (Mod 2.1)

Physical: Physical Condition (Defective Wiring, No Fire Extinguisher), increases chance of loss Moral: Dishonesty increases chance of loss (Arson)...b/c of Moral, premiums are higher to all. Attempt to control by careful UW and provisions such as deductibles, waiting periods, exclusions Morale: Carelessness or Indifference by insureds since they have insurance (protected from loss).

Identify 3 factors that affect cost of dental plan and issues to be addressed in design (Mod 5.4)

Plan design, characteristics of covered group, employer's approach to implementation At design = type of plan, deductibles, max benefit, coinsurance, pre-x, ortho

What is impact of healthcare use dependent on employer contributions in the form of HSA/HRAs (Mod 4.4)

Plans w/higher deductible and less generous HRAs generate large reductions in spending. Cost savings = higher deductibles Long Term Reductions in CDHPs associated with smaller contributions to spending accounts and for plans with higher deductibles offering HSAs as opposed to HRAs.

Define Indemnification (Mod 2.3)

Principle of making the insured whole again after reimbursement for covered loss takes place - similar financial situation than prior to claim.

Explain the prior authorization program and quantity limits provisions in a drug plan (Mod 6.3)

Prior authorization (PA) = restricts coverage under the plan for certain drugs based on patient's condition. Phys calls PBM to answer questions about condition to determine if covered. Quantity Limits (QLs) = Predefined max quantities for specific medications - restrict number of drugs that can be dispensed in a 30, 60, 90 day window - for abuse/overuse. Goal is to obtain higher dose, less frequently

Define an incentive dental plan (Mod 5.2)

Program that incentivizes sound dental hygiene through increasing reimbursement levels - only applies to preventative and maintenance. When deductibles apply, only on lifetime basis.

Describe HDHP's (Mod 3.1)

Provides catastrophic insurance. Trades lower premium cost to higher deductible by paying benefits only after insured has incurred significant out of pocket expenses. Developed so individuals have greater financial stake in healthcare decisions - manage expenses, offers possibility of accumulating health care savings in tax-advantaged account (both ER/EE contrib's)

How does pure risk differ from speculative risk (Mod 2.2)

Pure Risk: Situations where two alternatives are possible - risk will happen (no loss) or it will happen and a financial loss takes place. Many EB Coverages fall into this classification. Nothing positive can result from Pure Risk, but many are insured (Fire, Auto, Illness, Disability) Speculative Risk: Involve a possibility (that is not present in pure risk) of a gain. Three potential outcomes: Loss, No Loss, Gain (Ex: Purchase Stock, Gambling)

How does an HMO operate? (Mod 3.1)

Requires individual to select primary care physician (PCP) from a network of providers. PCP is responsible for managing individual's care and if care is required beyond scope of PCP, they will provide a referral to specialty care. No benefits (except emergency) are available outside the Network. Out of pocket expenses (PCP/Specialty) are routinely a flat dollar amount (copay) - no need to file for reimbursement.

Vision care plans include what benefits (Mod 5.6)

Routine eye exams, certain ocular tests (coordination of eye movements, tonometry, depth perception for children, refraction testing for distance/near vision). Plans also cover lenses, frames, contacts - frequency is every 12 to 24 months. Vision plans may use PPO. Plan pays lesser of charged amount of max dollar limit per benefit (i.e $50 for an exam, $140 for lenses) Adult vision/hearing not covered under ACA however pediatric is essential hb.

What are some examples of medications excluded by prescription drug plan? (Mod 6.2)

Smoking Cessation, Hair Loss, Obesity and Cosmetic Conditions, Lifestyle Drugs (do not cure illness but can improve daily life by boosting psych attitudes - sexual enhancements), OTC Medicines. Biotechnology drugs are included due to nature (administered by HC professional) Included are: Federal Legend, State-Restricted, Compounds of either, Injectible Insulin

Explain whether hearing care is typically covered by medical policies and describe benefits (Mod 5.6)

Surgical procedures affecting the ear are standardly covered under medical policies and are generally included in HMO coverage. Some even include hearing aids. Common package includes 80% reimbursement for services up to a max benefit every 36 months. -Otologic Exams (doctor), audiometric exams (audiologist), hearing instruments -PPO results in discounted cost.

Define terms "Allowed Amount" and "usual, customary or reasonable (UCR) fee" as related to Out-of-Network Benefits (Mod 3.3)

Terms used by health plans to determine the maximum amount the plan will pay for covered health services. Can also be called negotiated rate, payment allowance, etc. If the provider charges more than the allowed amount by the health plan, the provider can charge the member for the difference.

Describe Indemnity Plans (Mod 3.1)

The 1st employment based medical plans covered catastrophic losses (inpatient hospital expenses) - later added outpatient, diagnostic and physician services. Early programs and their successors known as Indemnity Plans (or traditional, fee-for services). They pay a percentage of cost of treatment (100% Emergency/Preventative and 80% all other) and don't require permission to access specialty.

What is the Taft-Hartley Act? (Mod 1.2)

The Labor Management Relations Act of 1947 is a United States federal law that restricts the activities and power of labor unions. This set forth good-faith collective bargaining over wages, hours, terms of employment and benefits.

Discuss how dental plans resemble medical plans (Mod 5.1)

Three basic approaches: 1: Fee for service indemnity 2: PPO (Preferred Provider) 3: Dental Health Maintenance Org -PPO prevailing (fee for service disappearing)

Impact of Labor Unions on Employee Benefits (Mod 1.2)

Through Collective Bargaining, Employee Benefit Plans have been impacted. In 1948 ruling states that the duty to bargain in good faith over wages also included insurance and fringes (pension). In WW Cross & Co, NLRB ruled wages included health and accident plan.

Describe special consideration given to preventative care (Mod 3.3)

Treatments that fall under preventative (shots, mammograms, cholesterol, etc) are covered w/o any deductibles, copays or coinsurance when in-network. Now ACA mandates all preventative services are covered under group health with no charge of ded, copay, coins (Mod 3.5)

What are advantages of mail service program (MSP) that allows a more generous supply (Mod 6.3)

Typically used for chronic conditions that require long duration dosages. MSP saves time and money (10%) MSP offers lower cost of dispensing and allow control through automation. High level of patient satisfaction. Disadvantage = possibility of waste, EE stocking up on medication prior to termination

Define concept of risk (Mod 2.1)

Uncertainty with respect to possible losses. Inability to determine with certainty the actual number and value of claims.

Impact of parity legislation of MH/SA (Mod 3.4)

Until recently, MH/SA had limited coverage compared with medical and surgical care in the form of lower reimbursement rates (ex: 50% for these services vs 80-100% for non MH/SA), fewer allotted visits, lower lifetime/annual dollar out of pocket maximums. This has been aided by ACA and MHPA.