Homework #2

Which of the following are problems that commonly arise in health insurance programs?

Adverse selection and moral hazard

Which of the following statements about adverse selection is most correct?

Adverse selection means those individuals with greater health risk are more likely to purchase health insurance, the adverse selection problem exists because of asymmetric information (applicants have better knowledge of their health status than insurers have), historically, underwriting provisions were used to minimize the adverse selection problem

Which of the following statements about medical coding is incorrect?

Coding is a relatively simple process, so no specialized training is required

Which of the following statements about the financial risk to providers under different reimbursement methods is most correct?

Different payers use different reimbursement methods, so providers face varying levels of risk, prospective payment transfers the cost risk (of each reimbursable episode) from insurers to providers, capitation transfers both cost risk and utilization risk to providers

Which of the following statements about Medicare's payment system for physicians' services is most correct?

Each service performed has a relative value unit (RVU) assigned that reflects the amount of physician work, practice expenses, and liability insurance costs

Which of the following statements about Medicare is most correct?

Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), medicare coverage consists of Parts A, B, C, and D.

Which of the following statements about moral hazard is most correct?

Moral hazard is the overuse of healthcare services or forgoing of prevention because the insured individual does not bear the full costs of the consequences.

Which of the following statements about fee-for-service reimbursement is incorrect?

Payment may be based on the number of covered lives.

Which of the following payment initiatives are included in healthcare reform legislation (the Affordable Care Act)?

Value-based purchasing and new models of bundled payment

Which of the following reimbursement methods creates the greatest incentive for providers to control the cost of delivering health services?

capitation