CEBS GBA Exam 2

What is the provision in Part D Medicare law that gives a significant benefit to pharmaceutical companies? (Mod 1.4)

Part D Medicare Law prohibits the government from using its purchasing power to negotiate widespread discounts with drug plans.

Explain the variations within the three generic compensation arrangements under managed care plans (Mod 4.3)

Physician or medical group may be paid fee for services up to a withhold - under this sort of contract, physician or medical group is paid (ex 80%) of the fee for services amount at the time the bill is submitted. The other 20% is paid if the managed care plan is able to cover its overall claims costs. Within the capitation model, physician or medical group may be responsible for all care, only ambulatory care or only ambulatory primary care. There may also be substantial differences between the nature of the contracts the managed care plan and the medical group negotiate and the compensation arrangements between the medical group & individual physicians.

If the pure premium is $1,000 and the loading percentage is 40%, what is gross premium? (Mod 2.1)

Pure premium = expected claim experience Gross premium = Pure premium / (1 - Loading %) Ex: $1,000 / (1 - 0.40) = $1,000 / 0.60 = $1,666.67 Stated differently, 60% ($1,667 x 0.6 = $1,000) of gross premium would be allocated for losses (loss ratio) and 40% ($1,667 x 0.4 = $667) would be allocated for loading (expense ratio).

In general terms, describe how the annual Medicare Advantage payment under the CMS-HCC model is determined (Mod 3.2)

The base rate (average annual Medicare cost) for a particular county is multiplied by factors associated with the member's demographics and also with the member's medical diagnosis (HCCs). This figure is the local benchmark number with which the bids of Medicare Advantage plans are compared.

What is value-based care? (Mod 1.7)

Value Based Care is a transformational change designed to shift from a predominantly FFS reimbursement environment, wrought with problems of waste and access, where providers work independently from one another to care for individuals, to compensation models that align incentives for teams of care providers to take ownership of managing health, cost and outcomes of specific populations.

Has selective contracting had an adverse impact on the quality of healthcare? (Mod 4.2)

Extensively researched; public view is that managed care results in lower quality. However little evidence exists on this issue in part because general measures of quality are difficult to obtain and apply consistently. In fact, one study concluded when quality is measured along dimensions of effectiveness, satisfaction and access to care, no significant differences existed between managed care and care provided through indemnity plans. Other findings do suggest that vulnerable populations may be more at risk in managed care plans.

What are the disadvantages of GTL as an EE Benefit? (Mod 12.6)

-EE usually has no assurance the ER will continue the group policy IF from 1 year to next -Another limitation exists when EE's change ER's, bc group insurance is rarely portable. -GTL provides pure protection only, while some EE's may have needs for savings or cash-value feature. -With salary related plans, coverage may be lowest when it is most needed.

What factors affect adequacy of a provider network? (Mod 5.4)

-Geography -Provider type -Absolute number of providers -Amount of provider competition -Insurer policies, including reimbursement

Describe the two basic benefits available to plan participants that PLTDI policies provide (Mod 10.5)

-Income replacement -Services to assist staying at or getting back to work Questions exist as to whether stay/return to work services provided to educated, skilled, highly paid workers will be effective for the low-skilled, lower wage EEs in blue collar jobs, who are more likely to apply for and receive SSDI. Available data does not answer those q's - also unclear the extent medical improvement plays in returning EE's to work rather than provision of services offered by PLTDI carriers.

Describe the tax incentives that HIPAA extended to LTC insurance plans (Mod 11.6)

-Not requiring LTC insurance providers to pay taxes on reserves -Allowing for LTC benefits to be paid out tax free to claimants -Enabling Taxpayers who paid private LTC premiums to count these as deductible medical expenses if their total medical expenses exceeded 7.5% of AGI. HIPAA also set forth tax treatment of ER-EE paid LTC insurance premiums; qualified LTC plans will be treated as accident and health insurance plans.

Identify and describe the most common types of disability provisions that are used in GTL policies (Mod 12.5)

-Waiver of premium is the approach most commonly used. Under this provision, the disabled person's life insurance remains IF w/o further premium payment if disability, as defined in the provision, commences while the person is covered under the group life plan. Coverage continues until the date of recovery or death, whichever is earlier, if proof of total and continuous disability is presented at least once every 12 months. -The extended death benefit approach continues GTL for 1 yr while the EE remains totally and continually disabled. Although it is the second most common type of disability provision, it is found only in a few # of contracts.

Discuss the potential negative consequences of small firms self-insuring their health care exposures (Mod 7.4)

1) EE's of small firms with self-insured plans may receive less generous benefits package bc such plans are bound by ACA min standards for benefits. 2) Small self-funded firms may face cost spikes that could lead to financial instability; being new to self-funding, small ER's lack claims experience of larger firms. This creates high likelihood stop loss policies may be canceled or revised to charge higher premiums. SL is not protected by GI and renewal provisions of ACA (only applies to FI). Bc SL issued on annual basis w/o guaranteed renewal, rise in healthcare cost w/i ER group can lead to much higher premiums the next year or outright cancellation of policy. In either case, small ER will become liable for subsequent increases in costs, unless and until small ER can find another SL insurer or buy FI. 3) Critical mass shift to self insurance may lead to adverse selection in the FI market for small groups. Such result would weaken the entire FI product market for small groups bc those seeking FI coverage would largely be older and less healthy - this trend would be damaging to SHOP exchanges bc their effectiveness depends on consolidating small group market into unified risk pool. Without enough healthy individuals in the pool, the cost of SHOP could rise sharply.

What is major advantage of private exchanges for EEs? (Mod 8.4)

According to recent study, 1/2 of all workers w/access to ER coverage have only a single plan option. For many workers and ERs, one of main advantages of exchanges is that they enable more health insurance options. In addition, exchanges can be used to also offer ancillary benefits, such as life insurance. Exchanges also relieve the ER of having to choose one or two plans for entire workforce.

What dual concerns regarding healthcare are shared by both private and governmental purchasers of healthcare? (Mod 6.1)

After great national debate about US healthcare reform that focused mainly on covering most of the uninsured, there is even greater concern about unsustainable increases in healthcare costs and about how to improve quality of both care/patient experience - shared by both private and gov't. Private purchasers of all types are desperate for relief and government, which has just become the main purchaser/payer of care, is worried that healthcare costs are consuming a steadily larger portion of the budget, forcing out other kinds of services. At the same time, both overall quality of care and disparities in quality among difference populations are cause for concern.

What is the typical duration of a stop loss contract and why is this significant? (Mod 7.3)

Almost always limited to 1 year; there is no guarantee that the contract will be renewed. In fact, 10-15% of small ER groups face re-underwriting w/i a few years, with significant premium increases b/c of changes in health status. There are no regulations that specify how far in advance stop-loss insurers have to notify ER's that they are materially changing or cancelling their stop loss contract, however standard practice is 60 days before renewal.

What is carve-out coverage? Give an example (Mod 2.2)

Coverage that may have been provided in a particular plan but now is provided separately: -Prescription Drugs -Mental Health Benefits

Describe the basic design of workers' compensation system (Mod 10.6)

Designed to provide cash benefits (compensation for lost wages) and medical care when the EEs suffer work related injuries or illness and survivor benefits to the dependents of workers whose deaths result from a work related accident. In exchange for receiving benefits, workers are generally not allowed to bring a tort suit against the ER for damages of any kind.

What challenges are faced by private exchanges looking to control adverse selection and avoid premiums rising to unsustainable levels, a condition known as death spiral? (Mod 8.1)

Early studies found that healthier EE's often gravitated to low-cost, less generous plans....leaving sicker, more expensive EEs in plans with richer benefits, which tended to cause death spirals among the more generous plans. To counter arising problems of adverse selection, risk adjustment methods can be used to transfer funds from plans w/below average costs to plans w/above average costs. Several reports argue that risk adjustment is needed in multicarrier exchanges, but there is no evidence for whether or how risk adjustment is being carried out. Private exchange operators would only need to conduct risk adjustment for large ERs, which are not subject to ACA rating regulations. These require a single risk pool with risk adjustment among all FI plans offered by ERs with 100 or fewer workers. States or fed gov't will conduct risk adjustment for small business risk pool.

Discuss the "paradox of choice" problem within the context of health plan choices and the old-fashioned method of addressing it (Mod 8.3)

Even w/advances of technology, health insurance decisions are difficult for EEs - info is complex, so choices are hard and many Americans still have trouble understanding key terms (copay, deduct). Unclear how decision-tool software is helping EE's w/factors other than premiums - can influence poor decision making. # of choices can be overwhelming, bias towards no choice, inertia with current plan. Some studies have shown EEs may find it hard to make a selection when # of options are large - when facing choices, EEs may resort to decision making shortcuts (brand name, single attribute). Inertia can occur when costs are associated with changing plans...also unexpected out of pocket costs if EEs are selected low actuarial value plans, in which they are expected to pay higher share of costs out of pocket on average. Given uncertainty around whether EEs can make choices suitable for their health risk, argued that telephone hotlines and face to face service are still valuable to EEs and ERs.

Describe impact of cost shifting to EEs as part of ERs transition to private exchanges (Mod 8.4)

Exchange arrangements can lead to increased cost sharing from the EE. Occurs if the ER limits or reduces premium contribution when moving to exchange (w/defined contrib approach) or if EE's select less generous plans on exchanges. These mechanisms both affect the amount an EE pays in premium and the amount they pay at POS. Has been an implied/unspoken perspective that defined contribution would help ERs reduce costs, but there is less of a discussion how that works - if EE's do not understand plan they are purchasing, they can open themselves up to substantial out of pocket costs.

In general terms, describe the implications of private exchanges offering standardized benefit designs (Mod 8.2)

Exchange operators prefer offering standardized benefit designs for all products (Ex: may stipulate all plans offered adhere to 1 of 5 designs, which vary based on deductible, coinsurance, out of pocket max, pharm benefits and network participation). Operators of such plans note the standard plans, which in some cases use metal tiers comparable to ACA, are part of the strength of their exchange offerings bc they make consumer experience easy. Otherwise, online decision support tools would be difficult to construct w/o standard designs and training benefit counselors would also be difficult; if carriers cannot differentiate and compete on cost sharing designs, they have to compete on networks & customer experience. Potential downside is a loss of control over plan benefit design; while some promote standardized plans as a way to achieve savings and help EEs make decisions, others say they tailor the exchange offerings to each ER.

Which rating methods are federally qualified HMOs allowed to use?

Federally qualified HMOs are allowed to use only adjusted community rating or community rating by class if they do not use community rating.

What is a salary continuation plan? (Mod 10.1)

Informal program that allows ERs to manage short term absences for pregnancies and nonwork related illnesses or injuries without contracting with an insurance carrier.

Identify the conditions that avoid the lapse of a universal life contract (Mod 12.3)

Most universal life policies have a no-lapse guarantee - policy will remain IF for a certain # of yrs (15 or 20), if at least min payment is paid. The min premium is specified in the policy and depending on the insurer, may be less than or equal to the target premium (suggested level of premium that will keep the policy IF for specified number of years).

Do health plans offering a choice between in-network and out-of-network services typically allow out-of-network cost sharing to count toward an individual's out of pocket maximum under the plan? (Mod 5.3)

Ordinarily, no - plans do not allow out of network cost sharing/balance billing to count towards an individual's annual out of pocket max.

How do the plans marketed by SHOP exchanges differ, if at all, from the plans sold in the small group market? (Mod 7.1)

Plans marketed on the SHOP exchange (like those sold in the small group market outside exchanges), must comply with federal requirements for insurers. However, other elements of SHOP exchanges are determined by individual states. Most states have established minimum participation requirements, specifying the % of EE's within any small group that must enroll. States also have set minimum contribution requirements, which specify ERs must contribute at least 50-75% of EE premium costs.

How has ACA affected number of uninsured Americans? (Mod 1.2)

Prior to ACA, 16.3% or 49.9 million Americans were uninsured. By 2014, this number reduced to 13% and by the first quarter of 2016 to 8.6%.

Describe the strengths and drawbacks of private exchange technology aimed at assisting Employees with making health plan choices (Mod 8.3)

Private exchanges typically provide extensive software to aid consumers in decision support; some provide all or most services, while others partner w/technology companies to run specific functions (such as web design/decision support). Operators state that advanced decision support is one of strengths of exchanges for both ERs and EEs - exchange vendor can be relied upon to help explain changes to each and every EE rather than ER doing it on their own. In exchange environment in which the EE is responsible for understanding and selecting health insurance, decision support tools are critical in helping EEs avoid poor choices. The software allows consumers to compare choices side by side and filters different products based on different variables. Technology often includes personality tests model that is like an online dating tool - asks q's and applied algorithms to generate a response. One potential problem with this model is that people find many questions invasive and quit the tool before selecting a plan. Filtering tools can be a challenge if a respondent wishes to change one of the options (sorting by deductibles rather than premiums), they may need to start at beginning of process. More advanced models allow side by side comparisons as the EE adjusts certain criteria. Websites can include info pop-ups to explain facets of benefits, such as drug coverage in a health plan.

What is most commonly cited as the approach to achieving cost savings associated with private exchanges vs what is in practice as biggest source of cost savings? (Mod 8.3)

Private exchanges: -defined contribution model - ERs set contribution levels for healthcare at particular level. However, found in practice that biggest source of cost savings actually from EEs choosing less generous plans than what ER had been offering/paying for before. Happens regardless of contribution method (defined vs %) In addition, another factor for lower costs in exchanges might be cost savings from standardized benefit plans, particularly from smaller companies.

List several (ADLs) activities of daily living (Mod 11.1)

Relatively high presence of dementia (and Alzheimer's) may serve as greatest example of need for LTC. Majority of cost is custodial in nature, that is providing assistance with ADLs. Examples include eating, bathing, dressing, toileting, inside mobility and getting in/out of bed.

How is firm size related to the likelihood that ERs will self-fund their health care insurance? (Mod 7.1)

Self-funding is not common among small firms; only 8% of ERs with fewer than 50 FT EEs self fund. However, the percentage who self fund increases along with the # of EE's - 58% of firms w/200-299 self fund, rises to 79% between 3,000-4,999 and 94% above 5,000 EE's.

How did hospitals compete in the pre-managed care era? (Mod 4.1)

Since price did not matter much, hospitals competed along dimensions that did matter in that period. This attracted physicians and their patients by providing more services, amenities and quality - skewed the theory of competition. Standard economics argues that more suppliers in a market should lead to prices being driven down to marginal cost. Instead, a greater number of hospitals in a market led to higher, not lower, prices.

Explain the reasons the level of insurance coverage through employers has declined over the years. (Mod 5.2)

Since the late 1990s, decline has been linked to 3 potential sources: -fewer firms are offering coverage -fewer workers are eligible for coverage -fewer eligible workers take coverage offered In past decade, much of decline attributed to reduced proportion of ERs offering coverage - believed to be largely small-ER phenomenon.

What are "SHOP exchanges" and what is their purpose? (Mod 7.1)

Small Business Health Options Program (SHOP) exchanges are marketplaces that are essentially online portals enabling small ERs to select from a range of fully insured plans and contribution arrangements for their EE's. ACA established these exchanges to allow small ERs better access to healthcare insurance plans.

Explain the difference between specific stop loss and aggregate stop loss reinsurance coverage and the significance of the attachment point (Mod 7.3)

Specific stop loss coverage limits the dollar amount on each EE's healthcare costs. Aggregate coverage limits the dollar amount on healthcare costs of an entire EE population over a period of time. As in traditional health insurance, ERs are responsible for costs until a deductible is met - beyond that point, they have no payment responsibility - known as attachment point. Thus, the attachment point = deductible; lower attachment points reduce ER's financial risk.

While there are proposals at the federal level to protect patients from unforeseen, ruinous medical bills, it has been suggested that statutory solutions at state level would be superior. Explain. (Mod 5.6)

State level has considerable benefits: -State level experimentation is invaluable in determining the proper regulatory solution to a problem for which the best remedies have yet to be identified. -Also a means of ensuring that patients, who are dispersed and unorganized, have the strongest chance to represent their interests against those of organized doctors and lawyers. -State level action allows citizen preferences to have a more direct role in policy and allows the effectiveness of those policy preferences to be compared among states with different regimes. -States also have an incentive to invest in policy reform because individuals can vote with their feet by leaving the state, thereby creating competition between state governments. In balancing functional federalism and state sovereignty interests surrounding regulation of unforeseen medical bills from out of network care, it can be argued that factors such as experimentation, competition and increase political participation all cut strongly in favor of state level regulation than a fully preemptive federal statute.

What have studies concluded regarding the presence of HMOs and the role of hospital competition on managed care pricing? (Mod 4.2)

Studies after 1988 indicate the presence of HMOs results in lower hospital costs and more recent studies show role of hospital competition continues to be a key in determining prices paid by managed care firms. A study using data from Fed EEs Health Plan found hospital prices were 18% higher in markets with least competition, compared with those with most competition.

Discuss a recommendation for engaging TPAs in their work with small firms self-funding their health benefits (Mod 7.5)

TPAs could help small firms not only to enroll EEs and administer plan benefits, but also to reduce costs in order to attract lower priced bids from SL insurers. TPAs could work more closely with brokers to present well-designed plans with effective cost controls to SL insurers as part of the bidding process for annual premiums and attachment points.

Explain how Stop Loss coverage is used with retrospective rating plans (Mod 2.3)

The ER agrees to bear the underwriting risk in a retrospective plan. ERs losses virtually could be unlimited in absence of some protection. To put a limit on possible losses, plan can involve aggregate stop loss coverage by an insurer assuming all losses over a certain $ amount. Primarily associated with Self-Insured Plans.

How do NCQA requirements for PCMH align with the criteria for PCMH as specified in Sec 3502 of ACA? (Mod 9.2)

The NCQA recognition criteria for status as a PCMH are aligned with the PCMH definition in ACA. In Sec 3502 of ACA, a PCMH is defined as a model of care with six core features, including the use of personal physicians, "a whole person orientation; coordinated and integrated care; safe and high-quality care through evidence-informed medicine; appropriate use of health information technology and continuous quality improvements; expanded access to care; and payment that recognizes added value from additional components of patient-centered care.

Describe the financing of TDIs (Mod 10.4)

Under each of the laws, EEs may be required to contribute to the cost of TDI; in 4 jurisdictions (all but CA and RI), ERs are also required to contribute. In general, the gov't doesn't contribute.

From a generic viewpoint, in what two classifications can life insurance policies be placed? (Mod 12.2)

Classified as either term insurance or cash-value insurance. Term = temporary protection Cash-Value = savings component and builds cash value.

Explain the historical lack of integration within most medical groups and why this situation has required the large evolving organizations to address (QI) quality improvement (Mod 6.2)

(Even applies to large multispecialty groups); created a situation where larger evolving organizations had to address QI. Formed primarily for economic or cross-coverage reasons, physicians in early medical groups tended to maintain separate medical practices with individual autonomy in approach to care. This meant that unless an individual physician was unusually interested in organizing care patterns, there was little consistency, coordination or outreach involved in patient care. Each patient/each visit was unique, and any care actions had to be recalled or created anew. Over time, the practice tended to decline as it became clearer that both efficiency and effectiveness could be improved by systems that crossed individual physician/specialty boundaries/nonphysician clinicians. Nevertheless, integration continued to vary enormously among different medical groups and sometimes even at different sites within an individual group,

List several key requirements in ACA, ERISA and state regulations from which self-funded healthcare insurance plans are exempt (Mod 7.2)

-ACA exempts self-funded plans from EHB and community rating requirements that apply to insurers selling to small groups (although exempt from EHBs, they are required to meet min value to be deemed qualified by ACA, just like large ER groups) -Self-funded plans are not subject to medical loss ratio requirements that apply to FI -Self-funded plans escape health insurance tax mandated by ACA Self-funded plans are also exempt from certain state regulations; ERs that adopt these plans avoid state premium taxes, which cost roughly 1.75% of premiums annually. ERISA effectively exempts self-funded healthcare plans from state insurance laws, including mandated benefits, reserve requirements and consumer protections.

What are some of the limitations of the human life value approach to estimating life insurance amounts? (Mod 12.1)

-All the sources of income after a person's death, such as SS survivor benefits, income from 401K and private pension death benefits, are not considered. -In its simplest form, work earnings and expenses are assumed to remain consistent and EE benefits are ignored. -The amount of income allocated to the family is a critical factor in determining the human life value, and this amount can quickly change depending on several factors, such as divorce, birth/death in family. -Merely assuming a lower discount rate can substantially increase the human life value. -The effects of inflation on earnings and expenses are ignored.

What are the major demographic and societal reasons that US citizens should save for (LTC) long term care? (Mod 11.1)

-As baby boomer generation is aging out, there is a growing demand for services that provide care for the elderly. -Numerous improvements in both science and medicine have contributed to increased life expectancies; however much of this increase is spent in disabled years. -Other reasons include: birth rates falling, avg family sizes are decreasing, geographic distances among family members increasing and proportion of women in labor force is increasing. These trends suggest there is less availability of informal, family based support to provide in home healthcare to elderly. With rising incidence of dementia, LTC service needs will increase dramatically.

What kinds of services do private exchange operators offer? (Mod 8.3)

-Benefit Admin Services (eligibility determination, reporting enrollment to carriers and managing payroll deductions) Processes are complex; Ex: large ERs may have different eligibility rules for diff EE populations in different states and private exchanges can assist w/determinations. Smaller ERs may particularly value admin services - for many, technology assistance is key consideration in moving from paper based to electronic, where the concept of online shopping, enrollment and engagement w/their EEs is simple and valuable to ERs. Private exchanges also offer services to assist w/compliance (ACA requirements), such as tracking EE hours worked. This enables ER to ensure all FT workers are offered health insurance as required by ACA.

Explain the three main advantages of self funding for a small employer (Mod 7.4)

-Cost -Flexibility -Freedom from potentially adverse effects of regulation First two existed before CA, whereas final advantage resulted inadvertently from CA and its effects on small group market. -Cost: Total costs are lower relative to FI product options in large part bc traditional insurance premiums include carrier marketing costs and profit margins - factors that aren't applicable to self funded. Can save 10-25% in nonclaims cost relative to FI plans. -Flexibility: Better flexibility in benefit package design and reimbursement contracting with providers. A small ER can personalize benefit package to reflect needs of workers (Ex: Large smoker workforce, could include rigorous smoking cessation program in benefit package that would otherwise not be included in FI plan. Self-insured also have freedom to strike unique payment arrangements with providers that align incentives and control costs. -Escape ACA regulation: perhaps most important as it adversely affects some small groups. In particular, those with young and healthy populations may have financial incentive to self-insurer rather than purchase FI plan. Because of ACA community rating requirements, a FI plan can be much more costly than a self-funded plan for a healthy population.

Discuss the two important ACA provisions that deal with essential health benefits and community rating (Mod 7.2)

-FI plans sold to ER groups <50 lives (either on SHOP or otherwise) are required to meet EHB (essential health benefits) requirements...these are stipulated in 10 categories. -FI plans sold to ER groups <50 lives are also subject to community rating requirements. These restrict how much insurers can use health factors like age and smoking status w/i an ER population to vary total premiums charged (although all will pay same premium). Community rating system applies to both positive and negative price variation - an insurer may not write a markedly cheap policy for a younger group or an expensive policy for an older group. Note: Protecting Affordable Coverage for Employees (PACE) Act of 2015 amended definition of small ER in ACA so it would continue to apply to ERs with 1-50 EEs, rather than changing it to 1-100 EE's as of 2016 as provided in original ACA, however PACE allows states to opt for alternative def if they choose

While primary care medicine has been the focus of redesign and improvement efforts, why has that area of care continued to deteriorate? (Mod 6.1)

-Fewer young doctors are going into primary care -Most primary care practices financially insecure -Primary care doctors are being forced to focus primarily on productivity Widely believe other developed countries other than US spend a much lower portion of gross domestic product on health care and enjoy better quality that we do is because their care systems are built on a strong primary care basis - various studies.

What are the basic characteristics of term life insurance? (Mod 12.2)

-Insurance protection is provided for a temporary period of time, such as 1, 5, 10, 15, 20, 25 or 30 years. If an insured is still alive after the period expires and the policy is not renewed, the contract expires. If the insured dies w/i the term period, the face amount of the policy is paid to the beneficiary. To protect the insurability of the insured, most term policies are renewable - that is, policy can be renewed for additional periods w/o EOI. Term insurance has no cash value or savings element and the insurance consists of pure protection.

List the major ACA provisions that uniformly impact insurers selling to all ER groups regardless of size (Mod 7.2)

-Insurers may no longer exclude members based on pre-ex -Insurers may not place annual or lifetime caps on coverage -All FI products must comply with Medical Loss Ratio (MLR) requirement....this mandates health insurance issuers in the individual, small & large group markets spend at least 80 and 85% on premiums on health care activities (as opposed to admin functions) -Coverage must be available to dep until Age 26 -Benefits that discriminate in favor of highly compensated EEs are prohibited

Identify the two forms of universal life insurance (Mod 12.3)

-One form pays a level death benefit during the early years of the policy. Under this form, as the cash value increases the net amount of risk declines. However, the death benefit is designed to increase automatically if the cash value exceeds certain corridor limits established by the IRC. -Second form provides a death benefit equal to a constant net amount at risk plus accumulated cash value. As cash value fluctuates over time, the death benefit will also fluctuate by an identical amount. This option, although can provide an increasing death benefit, does not guarantee it.

Why is it difficult to provide an exact definition of a private health exchange? (Mod 8.2)

-One reason: term private health exchange has been liberally used. Some insurers offer exchanges with their own products and there are consulting groups that might run their own exchanges with multiple insurers, while some broker/agent firms also run exchanges with multiple definitions. In general, private exchanges involve web portals through which EEs shop for health insurance, usually with more options that are typically available through traditional ER coverage. Websites often include advanced decision making tools, such as benefit calculators and web shopping features, such as ability to sort and filter options. At their core, private exchanges are a shopping experience (new phenomenon in health insurance). Online enrollment, decision support software and customer engagement add additional value for ERs. Nevertheless, lack of consensus on defining features of private exchanges...noted that they are really just a rebranding of benefit administration.

List the factors that medical groups of a study cited as most important for attaining QI within the health organization (Mod 6.3)

-Presence of organized systems in the clinic -Commitment to change leadership -Voluntary leadership by enthusiastic volunteers -Internal clinician champions for the guidelines -Priorities for quality vs finance by the group -Resources avail for guideline implementation -Continuous QI understanding & skills in org -Collaborative psych working environment -Clinician cohesiveness to share mission -Relative advantage of new care process -Importance of guideline topic to clinicians -Standardized org process for making changes -Change management infrastructure developed -Internal clinician interest in making changes -Internal turmoil present from internal changes -Leadership support for steps to fulfill vision -Management auth of resources for guidelines -Strategic plan inclusion of imp. in annual goals -Resource agreement process at all org levels -Active leadership involvement in change -Org culture supportive of planned change

Describe the conclusions drawn from the DIAMOND Project and their implications for large-scale transformational QI initiatives (Mod 6.5)

-Project shows the critical importance of aligning payment with desired care. -Shows great value of local QIC, especially on that has credibility/trust among medical groups and payers -Illustrates the importance and relevance of the conceptual framework for improvement: DIAMOND implementation benefited from widespread high prioritization for improving depression, from medical groups/clinics w/high levels of capability to manage change and from identification of a feasible new care process that had proven potential to greatly improve patient outcomes. Large scale transformational QI has become essential for the survival of primary care (PC) - thriving PC system is essential for any nation's medical care system to meet the triple aims of health improvement, reducing costs and enhancing patient care experiences. It will no longer suffice for few physicians/clinics to undertake small QI projects that may not affect the care of many patients or will not be sustained w/o the continued attention of a few champions. All of the components of a care system must learn to collaborate, undertake complementary fundamental changes and to do so in such a way to be sustainable for patients, staff, clinicians and entire countries.

Besides ACA affordability requirement, what other legal considerations must operators of private exchanges along with ERs be cognizant of when setting premium contribution levels? (Mod 8.2)

-Small group plans that uses a defined contribution approach could violate Age Discrimination Employment Act. ACA rating regulations set very specific requirements for how issuers set premiums in small group market; one of these rules requires that oldest adult enrolled in policy cannot be charged >3X youngest enrolled adult. Depending on specific product and state law, issuer may set a composite premium for the ER that reflects the age distribution of workers enrolled at start of year; it is unlikely composite premiums set across multiple carriers offering plans on exchange. As alternative to composite premiums, some states may allow exchanges to charge each participant a separate premium that varies by age and plan - if the ER were then to offer a fixed-dollar defined premium contribution, older EEs could be required to pay significantly more than younger for equivalent coverage. It is much harder on older worker to have defined contribution if it is same across whole workforce. Such a practice could run counter to ADEA, which states that while the absolute value of the worker's premium contribution may rise with age proportion of paid premium cannot increase with age. In addition, ERs using defined contribution approach could violate new ACA requirement which states ER benefit plans cannot discriminate in favor of high-income workers. Rules previously applied only to self-insured plans and precluded highly comped workers (execs) from receiving more generous health plans that lower comped workers w/o paying taxes on "extra" benefits. ACA now applies this to FI plans (but has been delayed).

Elaborate on the types of services that PLTDI carriers offer individuals to remain at their jobs or go back to their own/another job (Mod 10.5)

-purchasing ergonomic desks -coordinating with/supplementing commercial healthcare insurance -negotiating w/ERs for flexible schedules -working w/ER to move EE to PT -eliminating duties requiring lifting -placing EE in another job in same company The flexibility an ER has to offer these types of equipment and job accommodations is in no small part determined by nature of ERs business, their size and the types of jobs available.

Discuss two recommendations for improving the regulatory environment of self funded plans for small firms (Mod 7.5)

1) Instead of relying on informal industry practice, state regulators should explicitly require SL insurers to provide advance notice of at least 90 days before cancellation or making material changes (increasing premiums or attachment pts by more than 10%). Given small firms have limited claims data, likely to face significant annual changes on SL premiums and attachment points; 90 days would allow a small firm (w/help of broker) to find a better SL policy or FI health plan. 2) Federal reporting requirements for firms with self-funded plans should be expanded to include prominent disclosures to EE's about premium subsidies available at individual exchanges. Currently, at ER with a self funded plan must provide EEs with copies of some reports to IRS, but they mainly concern eligibility and compliance with ACA; they do not tell EEs that if they turn down coverage from a self funded plan, they may be able to buy FI policy on individual exchange with premium subsidy.

The National Association of Insurance Commissioners (NAIC) has developed set of minimum standards and practices that insurance organizations should abide by w/regard to LTC Insurance. What are some additional standards NAIC released to address various concerns and unfair practices present within the LTC insurance market? (Mod 11.2)

1) Prohibition of postclaim underwriting practices to promote clarity for consumers during the policy issuance process and to prevent insurers from unjustifiably cancelling policies upon identification of a claim. 2) Disclosure requirements to consumers and insurance companies during the policy replacement process, to mitigate the frequency of agents replacing existing policies with new ones simply for additional commission. 3) Suitability requirements, to ensure customer understanding of product details in order to identify the most appropriate policy type to suit their needs. 4) Standards for the use of benefit triggers within a LTC policy.

What has been focus of demonstration projects involving PCMHs since passage of ACA? (Mod 9.5)

3 major state and fed initiatives run by Centers for Medicare/Medicaid Services (CMS) to encourage practices that are covering millions of patients and thousands of providers to adopt PCMH model. The Federally Qualified Health Center (FQHC) PCMH demonstration includes 500 practices; there is the Multi-Payer Advanced Primary Care Practice (MAPCP) demonstration at present in 5 states; Comprehensive Primary Care (CPC) initiative is run by the Center for Medicare & Medicaid Innovation. The CPC initiative demonstration is broader than MAPCP and offers potential for significant impact. It is a multipayer initiative in 7 states encompassing 500 practices. Of key importance is that given a successful pilot demonstration for any of these programs under ACA statue for the Innovation Center enables projects to be scaled up w/o Congressional Approval. MAPCP = Establishing, funding and evaluating medical home pilots. Currently investigating whether the medical home can truly achieve coordinated, higher quality care at lower cost in order to meet goals of ACA. Demonstrations encompass pilots of various sizes/diff patient populations. Generated approx $4.2M in savings at its initial interim checkpoint by using primary care initiatives designed to promote PCMH principles (access to care, coordination, favorable patient experience) CPC = Take place over 4 yrs across 7 states with 500 practices, which will provide care for 313K Medicare beneficiaries. In 1st yr, hospital admissions decreased by 2% and E.R. visits decreased by 3% - early findings suggest program has generated enough savings in Medicare healthcare expenditures to offset care management fees paid by CMS. FQHC = Since 7/2011, number of FQHCs partnered w/Health Resources & Services Administration to transform practices to medical home pilots. Like CPC, program will reach 500 FQHC in US, which amounts to 195K Medicare beneficiaries. Practices will follow criteria for recognition and receive $6/mo per patient enrolled to help offset costs of transformation; like CPC and MAPCP, if successful pilot demonstration, program expanded to wider implementation w/o Congress approval.

What categories of workers are covered by PSTDI? (Mod 10.4)

39% of all workers employed in private industries; as with LTD, coverage levels vary based on worker and industry characteristics...higher coverage for FT, higher earners and workers employed with larger employers or in skilled occupations.

Describe the services a broker might provide to small firms seeking health care insurance (Mod 7.3)

A broker consults with an ER to determine what approach to insurance is best (self-funded, FI, or combination). If ER decides to self-fund, broker works as an agent on behalf of the ER to secure contracts with a TPA (3rd party admin) and stop-loss insurers. After an ER establishes a self-funded plan, broker may perform other services for the ER, such as enrolling EEs and resolving customer claims.

What approach does ACA take to the problem of involuntary out of network emergency care? (Mod 5.5)

ACA acknowledges that consumers may be unable to find an in network provider in an emergency; the law takes the approach of regulating the insurers and requires that the plans may not impose higher copayments or coinsurance for out of network E.R. providers. Insurers must reimburse at a minimum of the greatest of 3 possible amounts: 1) the amount negotiated with in-network providers for E.R. services 2) the amount for E.R. services calculated using the same method the plan generally uses to determine payments for out of networks services (UCR) but substituting the in network cost sharing provisions for the out of network 3) the amount that would be paid under Medicare for emergency service Notably, balance billing is still allowed, although the rules on minimum insurer reimbursement may reduce that amounts that providers will balance bill; these provisions don't apply to grandfathered plans or other cost sharing requirements for out of network (deductibles, max limits). While ACA continues to allow balance billing for out of network E.R. services, some state level laws prohibit this practice.

Explain how ACA treats firms with fewer than 50 FT EE's differently from those with more (Mod 7.1)

ACA requires companies with more than 50 EE's to offer healthcare policies that meet specific criteria or they must pay a penalty. Although ACA does not impose this requirement on firms below 50 EE's, it does establish minimum conditions for policies sold by health insurers to firms under 50 EE's - also ERs under 50 lives are not required to contribute to EE healthcare costs.

What are ACA requirements for self-funded healthcare plans? (Mod 7.2)

ACA treats self-funded just like it does FI in many respects. The bans on pre-ex denials as well as annual/lifetime caps apply to both. Also, both plans must comply with nondiscrimination policies for highly comped EE's and offer coverage extension to age 26. These all apply regardless of ER size.

Where are long-term care needs generally met? (Mod 11.5)

About 80% are met by family members on an unpaid basis. Services are also provided by adult care centers, nursing homes and assisted living facilities.

Discuss the advantages and disadvantages of a salary continuation plan (Mod 10.1)

Advantage = encourage EEs to conserve their sick days for extended disability protection; not deemed an ERISA plan and is not subject to ERISA reporting and disclosure requirements/fiduciary standards. Disadvantage = Without insurance carrier, ER has the burden of making determinations regarding disability criteria and the duration of disability; also, ERs subject to Statement 112 of the Financial Accounting Standards Board (FAS 112) need to annual estimate the accrued liability for these benefits, put aside reserve funds for it and report it on their annual financial statements; ERs that purchase STD policies have no such obligations since their financial obligation is limited to monthly premiums of the plan.

Discuss three recommendations for reducing adverse selection on SHOP exchanges (Mod 7.5)

Adverse selection on SHOP exchanges can be reduced by making them more attractive in following three ways: -1) Premium subsidies that have been made available to firms that purchase SHOP plans should be bolstered; at minimum, duration of tax credits offered to low wage ER's should be extended. 2 years of tax credits is simply too short a duration to create meaningful financial incentive. More dramatically (if feasible), federal premium subsidies to EEs should be available for policies bought on SHOP exchanges as well as on individual exchanges. -2) SHOP exchanges should invest in technology and operations to make the process of buying a plan as simple as possible; small firms have limited time and resources to focus on securing healthcare benefits and consider simplicity to be a top priority. -3) SHOP exchanges should build partnerships with traditional brokers; they represent an established channel that has developed meaningful relationships w/small firms.

Discuss what is meant by benefit offsets in context of PLTDI (Mod 10.3)

All PLTDI policies include provisions that reduce the amount of the benefit if a claimant receives income support based on his or her disability from another source, and some reduce benefits from any income, disability related or not. Almost all PLTDI plans include a required offset for SSDI benefits and require a claimant to apply if the company believes the PLTDI beneficiary is eligible for SSDI. Other income benefits include workers comp, pension payments, SSDI dependent benefits, rollovers of lump sum payments from defined benefit or defined contribution plans and veterans plans.

What is the special tax treatment given to qualified LTC insurance contracts, and what are the major requirements of a qualified LTC policy? (Mod 11.2)

All qualified LTC contracts receive the same special tax treatment provided to accident and health insurance contracts and ER provided accident and health plans under the Internal Revenue Code (IRC). Favorable tax treatment includes the exclusion from gross income of amounts received as benefits under the contract, the exclusion from gross income of premiums paid by an ER on behalf of an EE for LTC and the deduction of eligible LTD insurance premiums paid on tax returns of self employed. Major requirements: -policy must only provide coverage for qualified LTC services. -policy cannot provide coverage for amounts reimbursable under a specified section of the Social Security Act. -policy must be guaranteed renewable. -policy must not provide a cash surrender value or other money that can be paid, assigned or pledged as collateral for a loan or borrowed. -policy must provide that all policyholder dividends and premium refunds be applied against future premiums or to increase benefits. -policy must provide certain consumer protection provisions.

How are WC programs financed? (Mod 10.6)

Almost exclusively by ERs and are based on the principle that the cost of work related accidents is a business expense. Depending on state laws, ERs can purchase insurance from a private carrier or state fund, or they can self-insure. No program relies on general taxing power to finance workers comp.

Explain the concern about meeting LTC needs with Medicaid benefits (Mod 11.1)

Although Medicaid does provide some LTC services for individuals who meet needs-based eligibility requirements, Medicaid benefits may be scaled back (or eligibility tightened) in coming yrs due to severity of fiscal constraints at both state and fed gov't levels.

Compare and contrast private health insurance exchanges with SHOPs (Mod 8.1)

Although insurers and consulting groups (not states or fed gov't), run private exchanges, they are structured similarly to public SHOP exchanges, created for small businesses by ACA. Choices available on private exchanges may differ than those on SHOP and could vary significantly by geographic region. ER's may find private exchanges as viable alternatives if they manage to reduce cost of health benefits over time or if the simplify admin aspects of health insurance. From EE's point of view, private exchanges may provide more choice than typical ER coverage or SHOPs.

What issues make it difficult for individuals to manage access to out of network services? (Mod 5.3)

Among issues that make it difficult to understand/predict out of network coverage: -inadequate or outdated directories to determine provider participation -failure by most providers to publish list prices for their services -difficulty understanding insurer's out of network reimbursement schedules (EE's who underestimate out of pocket costs for out of network care may overestimate value of the plans that offer this option)

Explain how variability in the definition of the PCMH model presents both benefits and challenges to further adoption and widespread implementation of this patient care delivery model (Mod 9.5)

Among medical homes , wide range of variability in practice setup. Requirements for funding through PCMH pilots are purposely vague in order to encourage provider adoption and innovation, but model inconsistency could be a major setback for long term adoption. PCMHs can vary significantly in their clinical focus, transformation processes and payment arrangements, making it difficult to compare best practices across successful pilots. Standards and principles used to guide medical home development allow for a wide range of models. While this flexibility is considered important to avoid stifling innovation, it makes it difficult to generalize about results. At national level there is even higher degree of variation in methods used to evaluate practices and many of existing evaluations are not rigorous enough to provide reliable results. Bc of such variations, there is a lack of standards to assess, compare and benchmark performance of different PCMHs. There is delicate balance b/w standardization and innovation. If goal of national pilots to establish standard model for widespread adoption, transformation requirements should be defined more uniformly and more rigorous evaluation plans need to be developed and implemented.

What restrictions are present in group term life insurance regarding the designation of a beneficiary? Explain. (Mod 12.5)

An EE may name and change his or her beneficiary as desired under group term life insurance. The only restriction is that the insurance must benefit someone other than the ER. If, at the death of the EE, no beneficiary is named or a beneficiary is named but does not survive the EE, the proceeds may be payable at the insurer's option to 1 or more surviving relatives of the deceased EE or to the executor/administrator of the estate of deceased. Also, if any beneficiary is a minor or otherwise incapable of giving a valid release, the insurer is able to pay the proceeds under a facility of payment clause, subject to certain limits.

Which categories of US workers are likely to be covered by PLTDI? (Mod 10.3)

Approx 33% of workers in private industries have PLTDI. The percentage of workers covered, however, depends on the type of work, earnings and FT or PT status. Coverage is much higher for skilled, white collar occupations. The top quartile of earners have coverage at rates 10x higher than the bottom and the top 10% have coverage at rates more than 30x higher than the bottom 10%. Only 5% of PT workers has coverage, compared to 40% FT. Only 5% in leisure and hospitality has coverage, while more than 40% in manufacturing and professional/biz services do.

What reasons have been put forth for insurers and consultant groups to want to operate private exchanges? (Mod 8.1)

Argued that offering a private exchange may be necessary for insurers to gain or even maintain market share in rapidly changing market. In some cases, private exchanges may define value proposition by contracting with highly regarded providers, working with accountable care orgs and offering care coordination programs/wellness programs. These innovations might lower costs and therefore, keep premiums lowers, particularly for ERs participating in multipayer exchanges.

Despite the issues and limitations discussed, why do PCMHs or a variation on their conceptualization, appear to hold promise for patient care going forward? (Mod 9.6)

Aside from frustrations w/time constraints, comparability and limited support, clear benefits of PCMH model (highlights goals of ACA as well as those of Institute for Healthcare Improvement's Triple Aim): -effectively integrates IT w/a focus on primary care. -initial projects have illustrated cost containment and improved quality of healthcare delivery through fewer E.R. visits, lower hospital spending and improved access to care. Large scale pilots, such as MAPCP, CPC and FQHC may continually improve and narrow the variation among PCMHs and eventually set the stage for national rollout. ACA and the meaningful use initiative have created a favorable environment for the PCMH model to be tested; while process is resource intensive & requires collab for many parties involved in healthcare delivery, in may ways model represents future vision of American healthcare outline in ACA and triple aim. With prelim evidence of cost reduction, improved care coordination and more timely patient access, its potential for national expansion should continue to be evaluated. Financial and instructional support for demonstration projects should be provided to offset challenges of transformation, variation in medical home setups needs to be carefully managed and rigorous, constant evaluation methods should be developed and implemented. With patient as focal point, medical home could be a promising future direction for American healthcare.

Given the desire for primary care practices to transform themselves, are they likely to be able to handle such a transformation on their own or are they likely to need assistance from some kind of external group or consultant? (Mod 6.4)

Assuming some kind of external pressure leads primary care practices to want to transform themselves, the question becomes whether they can do it on their own using the best available concepts, techniques and tools, or whether they will need external consulting assistance. Widely believed that assistance will be needed, at least for small practices that still characterize primary care in most of US.

What impedes the ability of primary care practices to marshal consultative assistance to achieve QI? (Mod 6.4)

Assumption seems to have been made that if results of a QI effort involving external consultative assistance were positive, then this type of external help could be applied in large scale way. However, assumption has so far not been realized b/c few primary care practices have resources to pay for such consultative help and no external organizations have been willing to support it for more than a few sites. Increasing interest in gov't supported resource similar to agricultural extension agent program that played such a large part in transformation of American agriculture.

What controversy has swirled around the payment of emergency care? (Mod 5.5)

Balance billing for emergency services has long been a controversial topic; physician groups argue for preservation, arguing it is necessary to make up for routine underpayment by insurers. In addition, since physicians are required by law to treat patients in the E.R., the argue that repayment at their listed prices is necessary. Insurers counter that charges bill by out of network providers are often unreasonable and thus they should not be required to pay inordinately high payments for services.

Define balance billed and its potential infinitude when a healthcare provider's chargemaster rate is used (Mod 5.6)

Balanced billing is a term used to describe a situation where a healthcare provider wants to be reimbursed from a managed care plan enrollee the difference between the provider's billed charges for a service and the amount the managed care plan paid on that claim. (For example, if the provider's charge is $100 and the allowed amount is $70, the provider may bill you for the remaining $30.) The charge billed by the provider is the chargemaster rate, which refers to a comprehensive list of billable services that are set unreasonably high so that they can be discounted following negotiations with insurers. Thus, for non-emergency care, individuals who voluntarily or involuntarily obtain care from out of network providers are often balanced billed the large difference b/w what the health plan allowed and the chargemaster rate. Although most states have policies to protect managed care enrollees from in network balance billing, very few states extend protection to enrollees from out of network providers (ACA provides some protection for out of network E.R. care).

What are the benefits of purchasing a group contract for STD? (Mod 10.1)

Benefits provided through contract b/w the ER and insurance company: ensures that experienced professionals are managing claims, giving access to RTW support and fraud-prevention services; locks in fixed amount of monthly financial obligation (premiums) regardless of the disability benefits being paid. Some drawbacks are less control designing and administering plan and the exposure to additional costs from premium charges related to taxes, commissions and insurance profits. The tax charges are avoided when the plan is self-funded; typically large ER's self-fund STD.

How is ACA impacting out of network coverage? (Mod 5.5)

Broad implications: -insurers are now required to provide details on their plans using plain language and a standardized form called a Summary of Benefits & Coverage (SBC), which may help consumers navigate the complex jargon of out of network coverage. -Provision on transparency requires plans to disclose information on cost sharing and payments to any out of network coverage.

List the types of services covered by LTD insurance (Mod 11.1)

Custodial care, home healthcare, hospice care, assisted living care, adult daycare, and skilled nursing care (although not short term hospital stays). Many of these are not covered by Medicare despite the assumption by the elderly that they are.

What is the waiting period for SSDI benefits? (Mod 10.2)

Consists of five consecutive full-calendar months beginning with the earliest full-calendar month, throughout which the worker satisfied both the disability insured requirements and the definition of disability. Benefits are not payable during the waiting period.

Describe how a PLTDI elimination period is likely to pose a hardship for some workers (Mod 10.5)

Coverage requires EE unable to work for certain period of time - usually 6 months but sometimes more - as such, would pose financial hardship for those w/o paid leave. 39% of all workers have no paid sick leave and nearly 25% don't have paid vacation. For PT workers, 75% have no paid sick leave and 66% have no paid vacation. Among lowest 25% of earners, more than 66% lack paid sick leave and more than 50% vacation. An eligible worker who works for a covered ER is entitled up to 12 weeks of job protected leave under FMLA, but it is unpaid. Approx 40% of workers are not even entitled to take unpaid FMLA because they don't work for covered ERs (that is, the ER has less than 50 EE's) or they are not eligible EE's (that is, they worked for ER for less than a year or less than avg 24 hr/week).

Which groups are the target of SHOP exchanges? (Mod 8.5)

Created for ERs with less than or equal to 100 EE's. -In 2014/15, states had option to restrict to 50 or less lives, but by 2016, had to expand market to 100 or less. In most states, small biz exchanges have run alongside individual exchanges. Like PE, SHOP have the ability to offer small ERs a number of choices and ERs can control what plan choices are offered to EEs. As an additional incentive, SHOP exchanges offer a tax credit for small ERs w/fewer than 25 EE's w/avg salaries below $50,000/year.

How is healthcare stop-loss insurance for small employers regulated? (Mod 7.3)

Currently no explicit regulation of stop loss at federal level...most regulation exists at state level. Approx 20 states regulate stop loss for small ER's either by banning it altogether or by subjecting to specific regulations. Many of these 20 states based legislation on National Association of Insurance Commissioners (NAIC) Model Act, which sets minimum specific and aggregate attachment points for stop loss.

Why has the DIAMOND Project (text case study) been effective in delivering QI outcomes? (Mod 6.5)

DIAMOND project was built on ICSI's 15 years of experience in developing evidence-based guidelines by consensus among member medical groups and by facilitating the implementation of specific guidelines and more general quality improvements/care redesign. - Member groups also developed considerable expertise in implementing the organizational changes necessary for major QI. This success was also built on high degree of trust/common mission created during that history, both among medical groups and b/w those groups & sponsoring health plans. -Finally, it was built on several years of collectively trying to improve depression care by other means, both internal QI efforts and external incentives, care management programs, and facilitation through the ICSI equivalent of Breakthrough Series like those of IHI nationally.

Describe dependent group life insurance as an ER sponsored death benefit (Mod 12.6)

Dependent GTL may be offered as part of the basic GTL or as optional additional coverage. The growth of dependents' GTL has been relatively slow, partly bc of federal income tax status of amounts greater than $2,000. The death benefit normally is payable automatically in 1 lump sum to the insured's employees or in the event of prior death of the EE, either to the EE's estate or at the option of the insurer, one of the certain specified classes of "order-of-preference" beneficiaries. Much larger amounts of coverage are offered under Supp plans fully paid for by the EE.

Discuss some of the issues associated with the DIAMOND Project that have resulted in less extensive proliferation of this care model (Mod 6.5)

Despite success of DIAMOND project, issues that have led to much less extensive use of the care model than expected. Some participating clinics were only able to activate 10-20% of their depressed patients into the program - there was limited spread of the model into other groups/clinics in participating medical groups. Extensive interactions and site visits with participating clinics suggest limited engagement primarily associated with financial issues. Despite support of all health plans in state, a sizable portion of patients were not eligible for DIAMOND care b/c they had: -Medicare or Medical Assistance fee-for-service insurance that was not participating -Self-insured ERs had not agreed to coverage -HDHPs -Lacked insurance Lack of coverage for many patients compounded with feeling that existing coverage was marginally adequate for clinic costs of new care.

How does the information technology component of medical homes dovetail with the federal meaningful use standards? (Mod 9.4)

Dovetail creates virtuous cycle. Stages of meaningful use require that providers first utilize a certified electronic health record system in a substantive manner, then meet a number of objectives, including e-prescriptions, medication reconciliation, recording of demographic info, and ultimately, exchange of health data along with reporting of quality measures. Practices that undergo transformation to meet medical home criteria should be able to meet meaningful use standards and conversely, those that meet meaningful use criteria will be well equipped for challenges of medical home conversion.

Chronicle the emergence and effectiveness of external facilitators for QI in healthcare (Mod 6.3)

Early in the process, external facilitators were recognized as helpful..founders of HMO concept that later evolved into managed care health plans believed HMOs would have a vested interest in regulating output, performance and costs in the public interest, through better org, integration, and coordination of care. When that belief was only partly realized, newly founded NCQA sought to apply pressure on health plans to push QI by requiring inspection & certification as well as public reporting of performance measures among their members through Healthcare Effectiveness Data & Information Set (HEDIS). As the limited impact this approach had on quality and costs became apparent, purchasers began to get in the act more directly, through pressure by both large companies and coalitions for real improvement in both care/costs. Later more heterogeneous associations such as National Quality Forum & the Leapfrog Group developed and included unions, professional associations, consumer groups and even health plans. Many of these groups (as well as individual health plans) have tried various pay for performance programs, hoping to stimulate improvements. However, incentives have usually not been large and most payers responsible for small portion of patients of any individual practice so this approach has small impact...moreover much concern about unintended consequences, especially for sickest patients. Next step in the evolution of external pressures for improvement was development of performance measures focused on individual medical groups/clinics rather than on aggregated performance at level of health plans. Pioneered in MN through MN Community Measurement, an org sponsored by all health plans, which developed standardized ways of measuring quality at the group or site level and reported info publicly on a website; Other regions have developed similar public accountability measures.

Discuss the reasons for the emergence of increasingly complex medical organizations necessitating a focus on integrating QI championed by organizational leaders (Mod 6.2)

Emergence has required leadership - groups found a need for medical director, chief administrator, committees and boards of directors. As they became larger, multisite groups also created medical and admin leaders for each individual site. As pressure for QI/cost-efficiency increased, groups found it necessary to develop greater integration of various sites/depts to create infrastructure that could develop and maintain common systems to standardize care. To be most effective, the infrastructure needed a specific approach to QI, as well as a coordinator and physician leader who can connect QI efforts to organizational priorities, plans and resources. Recently, more groups have incorporated responsibility for QI into overall leadership structure (more apparent it is impossible to drive improvement/care redesign from a separate dept). Entire team and large resources are needed to support these kinds of changes. There are still many small/solo med groups, esp in rural areas; to survive will need to adapt - either merger/buyout...require leadership.

What are the advantages to ERs and EEs of a GTL insurance program as an EE Benefit? (Mod 12.6)

Employers: -Increased EE morale and productivity -Use of GTL as competitive tool with other ERs -Enhanced public and ER/EE relations -ER relieved of moral obligation when EE's are adequately covered. Employees: -It provides additional layer of low cost protection to personal savings, individual life insurance and SS benefits. -Helps reduce anxiety associated w/consequences of premature death. -ER's contributions generally not reportable as taxable to the insured EE for federal income tax purposes unless the total amount of group insurance from all sources exceeds $50,000. -If EE's are contributing towards cost, their contributions are withheld automatically, increasing convenience. -The conversion privilege enables terminated EEs to convert their coverage to individual permanent insurance w/o EOI (high cost) -Liberal UW standards provide coverage for those who might be uninsurable or only able to get insurance at substandard rates.

In general, federal law does not provide a public insurance system for STD, nor does it require ERs provide any type of nonoccupational disability insurance (FMLA only mandates that covered ERs provide eligible EEs with unpaid leave). What non-federal gov't entities have regulations covering the loss of wages caused by temporary nonoccupational disability or maternity? (Mod 10.4)

Five states (CA, HI, NY, NJ, RI and Puerto Rico) have public social insurance programs that provide temporary partial wage replacement for those EEs unable to perform normal work due to non-occ disability or due to maternity. These programs are known as temporary disability insurance (TDI) bc the duration of payments limited.

Explain the needs approach for estimating the amount of life insurance to own (Mod 12.1)

Focused on having an amount that is sufficient, along with other sources of income and financial assets, to meet the basic family needs of dependent survivors of the insured. Specific family needs considered: a) An estate clearance fund or cleanup fund for burial expenses, uninsured medical bills, installment debts and estate administration expenses, as well as estate, inheritance and income taxes. b) Income during the readjustment period that follows the death of a family primary wage earner and is typically needed for 1-2yrs c) Income during the dependency period that follows the readjustment period and lasts until the youngest child is 18 years old. d) Life income to the spouse that takes into consideration both the SS benefit blackout period and the income necessary to supplement SS benefits after the blackout period. Blackout period refers to period from the time that SS survivor benefits terminate to the time that the benefits are resumed. e) Special needs such as a mortgage redemption fund, an educational fund and an emergency fund for various unexpected living/medical expenses. f) Retirement needs in the event the family primary wage earner survives to retirement and requires income in addition to SS and private pension benefits.

Following passage of ACA how pervasive has the usage of PCMHs been in the delivery of healthcare services? (Mod 9.1)

Following ACA, intro & usage of PCMHs robust. Half of states have implemented for Medicaid populations. On scale/scope, 2012 report found # had grown to tens of thousands of providers across US, serving millions. Examining those pilots w/payment reform, study found they included approx 15K physicians in 5K practices w/almost 5M patients. Exact # unknown since surveys contain subset, it is clear adoption of PCMH is spreading fast in US - some are housed in large integrated health system such as accountable care organizations (ACOs)

Describe the types of RTW or stay at work services that PLTDI carriers provide to claimants? (Mod 10.3)

For an individual who appears likely to be able to resume working, the insurance company will provide services, such as coordination of healthcare vocational services (note: companies generally do not cover services themselves). They also provide negotiations of job accommodations (ergonomics, PT schedules or job transfers), job placement services, resume development and job skills training.

Discuss the need for a significant amount of time and financial resources in order to transform medical practices from traditional care delivery platforms to PCMHs (Mod 9.5)

For demonstration projects, medical practices need to be aware of true resource needs for transformation; many healthcare providers believe that both meaningful use of fed/state funding is inadequate. There are limited data regarding the direct/indirect costs of PCMH implementation. Therefore, one many look to traditional practice data for integration of health information technology. According to study of implementation in TX-based practices (traditional primary care not PCMH), estimated first year cost of system implementation was $162,000 for 5 physician practice, with $85,000 in maintenance. Maintenance costs are significant financial burden and include hardware replacement, software upgrades, as well as ongoing training and support for end users through external contractors or IT professionals. Given additional challenges in medical home transformation, these figures likely underestimate needs of PCMHs.

What is the definition of disability for SSDI? (Mod 10.2)

For the purposes of determining SSDI, disability is defined as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment. The impairment must be expected to result in death or to last for a continuous period of at least 12 months - called the duration requirement. Specifically, the disability must prevent the claimant from performing previous work or engaging in any other kind of work in which a significant number of jobs exist. It matters not whether such work is available in the claimant's immediate area or if the claimant would be hired upon applying for work.

Many of the benefit admin services cited in Mod 8.3 can be obtain without moving to private exchange. What do exchanges cite as their value added service? (Mod 8.3)

Frequently combine benefit admin services with other functions, such as consumer decision support and increased plan choice. Together, the package for services appears to define the value proposition the private exchanges offer.

Describe how the implementation of an electronic health record serves as critical step in transforming a more traditional medical practice into a PCMH care delivery platform (Mod 9.3)

From PCMHs, electronic health record and other tech components fundamental. Proper utilization of health info tech allows for integration of processes across every aspect of the medical home, from appt to follow-up analysis and evaluation of patient populations. Use of tech is also important to receive recognition from NCQA. Electronic health implementation (critical step) will link together team coordination, care transition, self management processes and patient registries to help with eventual measurement of outcomes for patient populations. Patient registries are lists of patients that share a set of conditions, such as diabetes or asthma, or characteristics, such as specific treatment plan. To help track patients through plan of care, practices achieve continuity through "desktop medicine," a fully integrated approach of information technology that includes outreach, coordination and follow-up protocols. PCMHs also utilize health info technology for secure online communication w/patients, access to records/lab results and appt reminders for preventative screenings. W/proper implementation, electronic health records can be used to monitor specific patient populations for trends that provide a platform to analyze reports, identify changes and target care practices to improve population health.

The doctrine of unconscionability permits courts to void a contract if no sensible person would accept and no honest person would offer such a contract. Describe how hospital admissions contracts can be viewed as unconscionable and therefore, unenforceable (Mod 5.6)

Given how much more expensive medical care is when it is not covered by insurance and is instead billed at chargemaster rates, hospital admissions contracts for those receiving out of network care can be deemed as unconscionable and therefore, unenforceable. However, courts have been quite reluctant to find provider contracts voidable for unconscionability.

Discuss one potential drawback of increased plan choice from private exchanges (Mod 8.4)

Having more choices can make it difficult for the EE to select a plan that is adequate for their health risk. Unintended effect is driven by lack of knowledge that can lead to under or overinsurance and anxiety over the transition from traditional ER coverage to exchanges. Ex: study found 36% of EE's not comfortable choosing own health plans. Also been argued that more plan choice comes with more admin cost, even in context of the exchange, particularly if plan moves to FI. Several publications cite potential increases in admin costs w/a FI model that some of exchanges offer. Still, those observations have been challenged w/separate claims that exchanges on the whole can transfer admin functions from ERs to the plans, thereby reducing costs.

Why are many individual LTC policyholders unable to deduct the premiums paid for their policies? (Mod 11.2)

IRC states that, generally, a taxpayer can only deduct premiums once a taxpayer's medical expenses exceed 10% of adjusted gross income (AGI). If LTC premiums were allowed as a deduction above the AGI line on an individual's tax return, similar to the treatment of contributions to retirement or health insurance for self-employed, more taxpayers would realize the benefits of such a deduction.

Describe the tax treatment of qualified LTC premiums paid by Subchapter C corporations (Mod 11.6)

If a subchapter C corporation pays for qualified LTC premiums for an EE, officer or owner, the amount is 100% deductible to the business as a business expense, and the premium is not considered compensation to the EE, owner or officer. These deductions are not in any way subject to the AGI or age based limits. These premiums are also excluded from payroll taxes. In summary, the company gets a deduction, the EE does not get taxable income and the benefits are tax free. Even more powerful is the fact that these premiums can be paid for retired EEs, eligible dependents and certain dependents after the EE's death.

Describe the nature and operation of a GTL policy conversion provision (Mod 12.5)

If an EE's life insurance ceases bc of termination in employment, termination of class membership, or retirement, they may convert GTL to an individual permanent life insurance policy. This must be done w/i 30 days of termination and the EE must pay the premium for his or her attained age, the type of insurance and the risk class involved. This conversion is made w/o EOI. Under most state laws, ERs must notify EE's of their conversion rights w/i 30 days after they take effect.

Describe the tax treatment of LTC premiums paid by S Corporations, partnerships and limited liability companies (LLCs) (Mod 11.6)

If an S Corp, partnership or LLC pays premiums for an EE who is also an owner of the business, the premium is considered compensation. Such an individual is taxed as self-employed. The amount is fully deductible to the ER and taxable to the owner/employee. However, the owner/employee may deduct the amount of premium paid by the ER up to the age-based limits that apply to individual purchasers of LTC, as long as he or she satisfies the other IRC requirements. The owner-employee will not be subject to the AGI limit.

Describe the tax treatment of qualified LTC premiums paid by individuals who are not self employed (Mod 11.6)

If an individual who is not self employed pays qualified LTC premiums, they are 100% deductible but subject to AGI and age-based limits. Premiums paid on such policies can be treated as medical expenses for purposes of itemized medical deduction.

Identify 3 factors that appear to be essential in achieving health care QI (Mod 6.3)

If any of these 3 are absent or only minimally present, there will not be much improvement: -high priority placed by leaders upon specific improvement that is higher than their need to undertake most other changes in the org -high capability to manage the change process, including knowledge and experience with a particular approach to change as well as adequate resources/leadership to accomplish the proposed change -choice of care process changes that are highly likely to be effective for accomplishing the improvements desired. Other factors, both internal/external that can facilitate or inhibit these three. Ex: group's priority for change is greatly affected by external incentives, competition and key customers, as well as internal competing changes/problems. Both change and care processes can be greatly affected by org culture and existence of other practice systems. Nevertheless, these 3 main factors can simplify the job of practice redesign & help in assessing whether a particular improvement effort is likely to succeed.

How have some states and ACA addressed the issue of network adequacy? (Mod 5.4)

If appropriate in-network care is not available within a reasonable distance of home, individuals are compelled to use out of network providers. State policies address this in many different ways - states may require insurers to report provider to enrollee ratios or stats related to driving distance to providers. California was the 1st state to add wait time to an appt to network adequacy standards; state legal protections may vary by plan type (HMO/PPO) In addition, ACA rules state that qualified plans include essential community providers and maintain a network that is sufficient in number and types of providers, including MH/SA, to assure all services will be accessible without unreasonable delay. With broad guidance, individual state exchanges have flexibility in defining network adequacy - since some states may choose to default into a federally facilitated ACA exchange, HHS will need to create a more specific definition.

What constitutes a patient having a medical home and what are the essential elements of PCMH? (Mod 9.1)

If he or she has personal physician who provides a 1st point of contact, as well as ongoing, comprehensive and coordinated care that moves away from traditional referral-based gatekeeper system. This definition emphasizes the contribution of primary care to a high functioning healthcare system, but does not prescribe all of essential elements of a medical home. Most policy experts suggest a medical home would exist when other elements present: -teams of providers from diverse array of professional backgrounds utilizing health information technology to manage a defined panel of patients for both acute and chronic conditions, in a proactive, patient centered manner.

Describe the tax benefits of paying qualified LTC premiums for the self-employed (Mod 11.6)

If self-employed EE pays qualified LTC premiums, tax treatment the same as non-self employed, except the individual will need to payroll taxes on the premiums paid and the taxpayer will have to meet a variety of other requirements, such as having taxable income. If a self employed or sole proprietor pays for qualified LTC premiums for his or her EEs, the premiums paid will not be included in the EEs compensation and the amounts will be deductible for the business.

What is lasering? (Mod 7.3)

If stop-loss insurers decide to offer a policy, they will quote a premium and deductible that cover the ER's total group. In rare instances, if there are selected group of extremely high cost EEs providers will quote a separate, much higher deductible policy for these individual's claims and this process is known as lasering.

Discuss the unexpected out of pocket expenses that individuals may incur for a hospital stay (Mod 5.5)

Involuntary use of "other hospital-based providers" such as anesthesiologists, radiologists, etc is a growing problem. Typically hospital based providers do not inform patients they are out of network before delivering care. For some specialties, patients may not even come into contact with the out of network provider. While a hospital may be in network, providers treating patients at that hospital may not be in network; this means that, though a patient may check before a routine surgery to ensure a hospital is in network, during surgery they may receive services from an out of network assistant surgeon or anesthesiologist, which would be impossible to refuse. The patient may not discover they are out of network until they are billed for the service.

How does the expected healthcare inflation rate compare to the expected general rate of inflation? (Mod 11.1)

In 2010s, healthcare inflation expected to continue to be significantly larger than general inflation rate due to increased utilization of medical services and new medical technologies that escalate cost of healthcare.

Innovations in LTC insurance market include partnership programs and combo, or linked products. What are these innovations? (Mod 11.3)

In a partnership program, insured individuals who become chronically disabled first draw on their private LTC insurance, albeit with a more limited benefit period than traditional LTC plans. Then when they expire, they are eligible to receive publicly funded Medicaid. Combo, or linked products involve a LTC rider sold jointly with either a life insurance policy (whole life/universal) or an annuity (immediate or deferred).

Why is it that increasing the number of workers covered by private LTD (PLTDI) will not cause a decline in SSDI costs? (Mod 10.2)

It may seem that less stringent def of dis in PLTDI (inability to do own occ vs SSDI of any job that exists in nat'l economy) at least initially will deter workers from applying for SSDI. However, due to the early universal SSDI offsets, PLTDI carriers have strong financial incentives to assist anyone who may be eligible for SSDI to apply. Although the insurance industry argues PDI coverage results in substantial reductions in SSDI expenditures, it is difficult to identify why any worker receiving PDI benefits who might be found eligible for SSDI would delay or avoid SSDI application given these plan requirements and financial incentives. In addition, if the application is delayed but the person eventually applies for SSDI and is approved, there may be no or limited savings to SSDI because benefits are retroactive for up to 12 months after the date of completion of SSDI five month waiting period.

What is the rationale for the 90 day waiting period before benefits begin to be paid by qualified LTC policies? (Mod 11.2)

LTC is for chronically ill. IRC defines chronically ill individual as one who has been certified by a licensed healthcare provider as unable to perform, w/o substantial assistance from another, at least 2 ADLs for a period of at least 90 days due to loss of a functional capacity. This framework established by IRC does not allow PH to receive benefits until period of disablement is expected to last at least 90 days.

What are ADLs and (IADLs) instrumental activities of daily living? (Mod 11.5)

LTC services are intended to assist in coping with and, to the extent practicable, compensate for a functional impairment in carrying out certain activities. ADLs are activities such as bathing, toileting, dressing, transferring and continence that people routinely do in conducting their lives. Long term services may also include assistance with IADLs, such as cooking, cleaning, shopping, taking public transportation, paying bills, maintaining a residence, using telephones and directories, and using a post office.

What is private LTD insurance? (Mod 10.3)

LTD insurance provides income replacement to insured workers whose illness or injury precludes work for an extended period, usually 6 months or more. A typical PLTDI plan provides income replacement of 60% of pre-injury/illness earnings, though approximately 25% of policies provide less than that amount for workers who become disabled.

At which government level is private LTD insurance regulated? (Mod 10.5)

Like most insurance products, regulated at state level. ER-sponsored (94% of plan participants), is governed by ERISA (set basic requirements for plan documents and disclosures as well as basic requirements for notices and appeals). However, there is significant concern that current ERISA consumer protections in the areas of plan disclosures, claims procedures and remedies as they related to DI are inadequate and should be addressed if coverage is expanded. This is especially true if ERIS preempted state payroll withholding laws prohibiting auto enrollment in EE paid PDI plans. Federal ERISA law does require plan summaries of EE welfare benefit plans (under which DI plans fall), include a statement clearly identifying circumstances which may result in disqualification, ineligibility, or denial, loss, forfeiture, suspension, offset, reduction, or recovery. However, the ERISA Advisory Council (appointed body of EE org reps, ERs, other experts in insurance and ERISA), found the complex nature of many DI contracts and their admin have often resulted in the insured (and sometimes the ER), misunderstanding the details of coverage and true nature of the benefits available when a disability occurs.

Describe a possible solution to some of the problems with legacy LTC products that would eliminate the need for regulatory approval of LTC rate increases (Mod 11.4)

Likely solution is to provide portability with coverage for basic care needs. Legacy LTC products are long term level funded, with no PH options should the market or the company change. Providing a non forfeiture value, which does not need to be cash surrender benefit, would introduce portability into the LTC product. If regulator approves both the form and the actuarially fair non forfeiture benefit, then the regulator no longer needs to approve rate increases since the PH would have the option of taking their accumulated value of the policy to another carrier. Regulators could focus on LTC the same way they focus on life insurance (market conduct, initial form approval, solvency). The private insurance market would govern the mispricing of products instead of regulators. Finally, LTC insurers should be more careful about contract language, benefit triggers and product definitions while ensuring that physician assessing disability is both objective and qualified.

How is long term care defined and how is it distinguishable from other types of healthcare, such as acute care, subacute care, intermediate care or respite care? (Mod 11.5)

Long term care is a set of healthcare, personal care and social services delivered over a sustained period of time to persons who have lost or never acquired some degree of functional capacity. Care provided through health insurance coverage, on the other hand, may include medical and therapeutic services required by an injured or ill individual, but such care generally has durational limits and ceases when the individual's recovery plateaus. Long term care is ongoing chronic care.

What are the advantages and disadvantages of the needs approach? (Mod 12.1)

Major advantage of needs approach is that it is a reasonably accurate method for determining amount of life insurance to own when specific family needs and objectives are recognized. Another advantage is that it considers other sources of income/financial assets. Major disadvantage is that future projections over insured's lifetime require numerous assumptions and can be constructed in many different ways. There is a wide variation in the estimated amount of life insurance needed depending on the calculator/website used.

Explain why some ERs may not want to totally disengage themselves from the business of benefit administration (Mod 8.3)

Many ERs do not want exchanges to create a barrier in working with EEs. ERs (particularly large) consider their benefits to be a big part of overall rewards program for EEs and for that reason, do not want to disconnect themselves from their EEs.

Explain how Medicare does not provide coverage for LTC although many reitrees believe it does (Mod 11.1)

Many erroneously believe Medicare, either through basic or supplemental, provides long term nursing home care. However, Medicare does not cover LTD provided by custodial or noncustodial workers; it only provides medically necessary care in skilled nursing facilities or, if ordered by doctor, rehab care in one's home. Medicare Part A will cover only up to 90 days for hospital inpatient stays (plus limited # of reserve days) but w/large copays. Coverage in skilled nursing facility is subject to coverage limitations, deductibles and coinsurance. Thus, Medicare does not provide a comprehensive care package and, even for services it covers, patient may be subject to significant out of pocket costs in the absence of additional private insurance.

The success of RTW initiatives is often impacted by the nature of the ER's business; in initiative can be ineffective when dealing w/MH disabilities. Why? (Mod 10.5)

Many of the services provided (ergonomics, rehab, reduced hrs, elimination of physical duties), appear to be most effective in assisting individuals w/physical impairments or fatigue/lack of strength. Additional info beyond what is publicly available is needed to understand how current services would benefit MH in staying/RTW. Many policies contain period limitations on MH, so insurers may have less incentive to provide expensive or difficult RTW services to EE's. The most successful approaches for assisting MH EE's that meet SSDI Def of Dis involve ongoing support with no time limits, which is not a model PDI carriers are inclined to follow due to ongoing commitment and cost.

Discuss the redesign of primary care medical practice to a medical home model (Mod 6.2)

Medical Homes = Standardized practice systems that ensure comprehensive, continuous and coordinated care are at the heart of primary care practice redesign. The presence of these systems (built to implement the domains of the chronic care model) also form the core of the assessment being used by NCQA (Ntl Committee Quality Assurance) for recognition of medical homes at 3 levels of competence. Real challenge = how to transform traditional medical care practices into medical homes. AAFP (American Academy of Family Physicians) funded the National Demonstration Project in 2006 as a controlled trial of external facilitation. Early evaluation concluded transformation is a difficult process - one that requires physicians to reconsider their own roles as well as the ways in which they deliver care. It is precisely this process that is reshaping medical care - the crux involves how to best move beyond incremental changes to a whole new design for primary care medicine.

Why are Medigap policies a significant reason for the rising cost of Medicare? (Mod 11.1)

Medicare spending has increased significantly in absolute dollar amounts and as a % of GDP due to the fact many individuals buy Medigap policies to fill in coverage gaps in basic Medicare (Parts A & B) so as to reduce their out of pocket costs - but this may also encourage unnecessary use of healthcare services and thus increase Medicare expenditures overall. Also, Medicare also employs a prospective payment structure whereby a hospital receives a fixed payment for service this is not dependent on actual utilization and thus the hospital may get to pocket the remainder of payment for services not rendered.

What are the main reasons that Medicare and Medicaid provide extremely limited solutions to long term care needs? (Mod 11.5)

Medicare was not designed to support long term care treatment. Medicaid was designed to cover a continuum of long term care service settings, but as the number of individuals requiring extensive care grows, the budget is being strained.

What is the impact on SSDI benefits if the disabled worker is entitled to other benefits? (Mod 10.2)

Monthly benefits for a disabled worker family are reduced when the monthly SSDI cash benefit amount plus state or federal worker's comp benefit amount (or other fed, state, or local disability benefits with some exceptions), exceeds 80% of the worker's average current earnings before the onset of disability. The offset is imposed for any month in which the individual is entitled to both SDI benefits and other applicable benefits.

Compare and contrast the average replacement ratio for PLTDI and SSDI (Mod 10.5)

Most PLTDI plans replace 60% of predisability income, with 25% replacing less than 60%. For high earners, 60% generally exceeds what they would receive if they met SSDI def of dis and applied for/received benefits. SSDI replaces about 45% of lifetime predisability earnings for the avg earner and as little as 29% for workers who consistently earned the taxable maximum, which was $118,500 in 2016. Workers with earnings above the taxable maximum have lower replacement rates. However, low and medium earners often get more than 60% of their predisability earnings replaced by SSDI, especially when dependent benefits are included. A FT worker earning minimum wage, for example, would receive about 67% of predisability earnings if eligible for SSDI, and an even higher percentage if the worker had dependents and received the maximum family benefit (approx 85%).

Identify the frequently referenced strategies that can be combined to effect QI using a multiple strategy approach (Mod 6.3)

Much research on single strategy approach, less on multiple strategy. The cited study's medical group leaders identified 25 strategies and rated 20 of them as needing to be used at east frequently, believing when that when used, they would be extremely/very effective. Top 10: #1 - Using system supports like reminders, registries and task delegation #2 - Focusing on changes that would make physician work easier #3 - Reducing or improving barriers #4 - Measuring for improvement periodically #5 - Providing information or training #6 - Delegating authority to implementation planners #7 - Providing comparative feedback of relevant measurements #8 - Pretesting change through pilots and rapid cycling #9 - Tailoring implementation to each practice setting #10 - Focusing on changes that make system better for patients Widely believe multiple strategies work better than single for QI.

Summarize the three-tier PCMH recognition process as established by the National Committee for Quality Assurance (Mod 9.2)

NCQA recognition process is a 3 tier process (tier 3 is highest), with six "must-pass" elements, including access during office hours, use of data for patient population management, care management supporting the self-care process for patients, referral tracking and follow-up and implementation of continuous quality improvement. Practices can be recognized at any tier at the start of the process and can improve by meeting more of the criteria over time.

Is there any evidence that PE are affecting ER offer of health coverage rates? (Mod 8.5)

No clear evidence; however, if PE cause some ERs to continue offering (or start offering) coverage, this could influence SHOP risk pool by adding more ERs. Since ACA requires entire small group market (including SHOP plans, PE plans to small ERs and other small group plans) to operate as a single risk pool, small ERs that newly offer coverage in PE will affect premiums on SHOP exchanges. Nevertheless, it appears industry participants do not believe PE are likely to influence shop risk pools.

Are EE's who receive an ER offer of healthcare coverage purchased on a SHOP exchange eligible for federal subsidies? (Mod 7.1)

Not eligible for federal subsidy; Even if a plan purchased on SHOP Exchange is not affordable an EE must reject the SHOP plan and purchase on an individual exchange in order to receive a federal premium subsidy.

Is there any evidence that PE are being designed to make it easier for small businesses to self-insure? (Mod 8.5)

Not much evidence; operators offering self-insurance to small ERs in PE could face regulatory challenges. Ex: the pooling of multiple small businesses in a self-insured PE could cause the exchanges to be labeled as multiple welfare groups, which are subject to HIPAA, ERISA and ACA.

Is it possible to ascertain from publicly available data that the same workers have both PSTDI and PLTDI? (Mod 10.4)

Not possible to tell; however, bc the % of workers who have PSTDI is generally similar to or greater than those who have PLTDI, and bc insurers typically integrate the two types of coverage, it is reasonable to assume that most workers who have PLTDI also receive ER paid PSTDI as part of a comprehensive benefits package.

What qualities allow a medical home to achieve impressive cost savings through coordinated preventative care? (Mod 9.6)

Number of qualities that include: -Successful practices conduct an integrated, informed circle of clinicians who constantly assess and engage patients. -When practice operates as envisioned, patients receive timely appts, understand plan of care and take initiative for preventative measures, which is important for chronic illness. In terms of economics, ROI is favorable in some pilots; also evidence of cost containment through lower downstream costs and utilization.

What are the parts of the Social Security Old Age, Survivors and Disability (OASDI) program? (Mod 10.2)

OASDI program makes monthly income available to insured workers and their families at retirement or in the event of death or disability; program consists of 2 parts: -retired workers, their families and survivors of deceased workers receive monthly benefits under OASI program -disabled workers and their families receive monthly benefits under DI program

Describe the eligibility requirement for SSDI benefits (Mod 10.2)

OASDI program provides monthly disability insurance (DI) benefits after the onset of a severe physical or mental impairment. To become entitled, worker must: 1) be insured for disability under Soc Sec Act 2) file a claim for disability insurance benefits 3) meet definition of disability in the act 4) complete 5 month WP 5) not have attained normal retirement age

Discuss a breach of contract strategy for fighting surprise medical bills from out of network physicians while receiving care in an in-network hospital (Mod 5.6)

One could attempt to sue for breach of contract under 2 possible theories (unlikely to succeed on either grounds): 1) A plaintiff could claim that inclusion of the out of network doctor in his treatment was not medically necessary and therefore was outside the scope of admissions contract. By any currently adopted standard, a plaintiff attempting to claim medical care received was not medically necessary (therefore outside scope of contract), will have a high evidentiary burden to surpass - courts are hesitant to overrule physician judgements with their own opinions about what is medically necessary. 2) The plaintiff balance billed at the chargemaster rates could claim that the price term in the signed admissions contract, though vague, does not include chargemaster rates. Price terms in treatment contracts (such as full charges for all services rendered or any and all amounts) are intentionally vague - these vague price terms can be filled in with reasonable value by the courts. It seems logical chargemaster rates are unreasonable b/c they are intended to be negotiated and hospitals very rarely collect them. While some courts have found rates to be unreasonable in context of uninsured, others have not. With conflicting precedents, the viability of arguing that a provider breach contract by billing at chargemaster rates is uncertain.

Distinguish b/w PCMH and its widely practiced precursor, the traditional gatekeeper model (Mod 9.3)

One key difference is PCMHs institute a team approach to patient care. Rather than systematically referring patients to specialist, practices coordinate care efforts through diverse team of PCPs, specialists, nurses, soc workers, PA's, etc.. In many practices, common to have team huddles to preview cases, review lab results and coordinate expertise. Similar to gatekeeper model, there is a principal physician or nurse practitioner in charge of patient's care. In medical homes, coordination of care is implemented through one of these principals, but principal can be generalist, specialist or nurse practitioner who acts as point person for care.

Detail the conclusions regarding various approaches to achieve QI (Mod 6.4)

Performance measures, incentives and penalties that are only focused on or used by health plans are not likely to be successful in bringing about effective and extensive quality improvement. External bodies have limited ability to foster the redesign of care unless there is a change in payment system, and the failure of capitation w/return to fee for service payment to physicians and their org has only reinforced that reality. It is recognized that physicians and care delivery org's must take leading role in any serious improvement in care/costs, and that only happens when payment systems require and reward changes. Continuing to base physician payment on the volume of services provided neither incentivizes significant changes to care approach nor covers the cost of making such changes.

Describe the evolving structure and function of primary care delivery organizations in the US (Mod 6.2)

Organizations that provide primary care have been evolving from largely solo doctor practices to small single-specialty groups and now to ever larger medical groups, many of which have become multi specialty organizations able to provide almost every type of medical service. Some of this evolution has been hastened by the need to create negotiating power with managed care plans, but it was being fostered in any case by technological advances in medicine, cost pressures, changing physician attitudes about work and heightened consumer/purchaser expectations. When doc's first banded together, it was to share after hours calls, billing systems/other infrastructure - usually consisted of 2-10 docs of same specialty, with 3-5 being most efficient. Later (particularly in regions with high penetration and pressure from managed care plans), many of these single site groups merged or were bought out by large care systems or hospitals who wanted to create a captive referral network and/or gain negotiating power with insurance plans. With some of larger aggregations continue to chiefly contain a single primary care specialty, many have become multi specialty as well as multi-site. Larger organizations are referred to as medical groups (some continue to practice at single site but most have multiple or clinics); some establish smaller satellites, particularly in rural.

Describe the basic features of a PCMH that distinguish it from the traditional delivery care model and the process an entity must go through in order to receive recognition as PCMH (Mod 9.2)

PCMH model has few basic features that distinguish it from traditional care delivery model: -integration of health information technology -patient centered engagement in care -team-practice approach If practice has all 3, they can apply for recognition. NCQS is main org involved in PCMH recognition - as a private org, it maintains a unique governance role bc it develops its own standards and accreditation guidelines for many gov't (and private) health care initiatives: medical homes, accountable care orgs, disease management and even health plan evaluations. Practices can also apply to other org's such as Joint Commission and Accreditation Commission for Healthcare, which have also crafted recognition standards for medical homes. Some states (like OR), have standards as well. Given there are a number of bodies setting criteria for medical homes, no single org is responsible for recognizing PCMHs.

Explain the purpose and features of private STD (PSTDI) coverage (Mod 10.4)

PSTDI is designed to provide income replacement when a disabling impairment precludes work for a limited time; STD policies have many of same features as LTD - payments generally begin after claimant uses paid sick leave (if any) and consists of a % of predisability earnings (mostly 60%) when the EE can no longer work or can only work PT due to work-disabling condition. STD pays benefits for between 9 and 52 weeks, w/standard at 26 weeks. EP's generally range from 0 to 30 days; standard is 7 days.

Explain the rationale behind the team approach for PCMHs (Mod 9.3)

Patient may require more resources per visit but will necessitate fewer visits over course of care - using additional resources early will prevent future emergencies. Additionally, through proper pre-visit preparation and post-visit f/u, model allows for patient needs to be met while requiring the same or fewer total medical resources (as result of timely screening/preventative care). Team utilizes clinical decision support and team members review health records to compare evidence-based guidelines/care alternatives.

How does patient engagement in care occur in a PCMH? (Mod 9.3)

Patient-centered focus key element of medical home concept. To build long term patient relationships, practices must adapt to patient needs and focus on access/patient involvement in care, including steps toward self-management of diseases. Many practices allow certain # of same day appts to accommodate patients quickly and prevent lapses in care or preventable E.R. visits - same day appts mandatory in NCQA. Unlike gatekeeper model, PCMHs more generous scheduling. The medical home model emphasizes patient involvement through shared decision making. Goal is to maximize adherence to course of treatment or self-management through education and follow-ups. Patients are encouraged to be more educated about their illness and proactive in maintaining improved health outcomes. Some PCMHs track patient engagement and satisfaction through surveys and monitor health status b/w visits. These surveys play important role in assessments by payers & public. NCQA has standards for how measures should be documented/reported.

Describe the role of variable life insurance values and the common features among these types of policies (Mod 12.3)

Policy in which the death benefit and cash surrender value vary according to the investment experience of a separate account maintained by the insurer. The amount of life insurance and cash surrender value may increase or decrease w/the investment experience of the separate account. Common features: a) Variable life policy is a permanent whole life contract w/fixed premium (level and guaranteed not to increase) b) Entire reserve is held in a separate account and is invested in equities or other investments. The PH generally has the option of investing the cash value in a variety of investments. The minimum death benefit will be at least equal to the original face amount, but can be higher depending on investment experience. c) Cash surrender values are not guaranteed, and there are no minimum guaranteed cash values. Although the risk of excessive mortality and expenses is borne by the insurer, the investment risk is retained by the PH entirely.

State the nature and calculation of the human life value approach in determining the amount of insurance to own (Mod 12.1)

Present value of the family's share of the deceased breadwinner's future earnings. It can be calculated the following way: a) Estimate individual's average annual earnings over his or her productive lifetime. b) Deduct federal and state income taxes, SS Taxes, Life/Health Insurance Premiums, and the cost of self-maintenance. The remaining amount is used to support the family. c) Determine the number of years from the individual's present age to the contemplated age of retirement. d) Using a reasonable discount rate, determine the present value of the family's share of earnings for the period determined in c).

Why is the pricing of LTC insurance often a very public debate? (Mod 11.2)

Prior to 2000, vast majority of insurers based LTC pricing on justification on expected loss ratio. However, given long-tailed nature of the product and lack of product-specific actuarial data, pricing could not rely on past performance to develop an adequate pricing structure. As a result, LTC policies were often rated far too low to cover losses. Large rate increase became necessary and this created a "rate shock" for senior consumers who may have invested years in the product that was sold has having a level premium.

Discuss two forms of private exchanges (Mod 8.1)

Private exchanges can be classified into those run by a single health insurance carrier and those integrating multiple carriers. In the second form, a 3rd party (benefit consultancy), will combine plans from several insurers into 1 platform. Insurance companies can participate in more than 1 exchange and some are both operating their own exchange & participating in other exchanges operated by consultants. Tech firms interface b/w EE's and exchanges, designing websites to compare plans and decision-support tools to help EE's select plans. Some ERs also take on task of ben admin. In addition to offering more health plan choices than workers have under traditional models of ER health insurance, some private exchanges offer other types of insurance, such as life or other related products.

Why is the defined contribution approach to funding healthcare that private exchanges can facilitate not consistent with self-insurance? (Mod 8.2)

Private exchanges can enable ERs to make a defined contribution w/a fixed dollar amount to a workers health insurance benefits, potentially limiting their exposure to unpredictable health care cost inflation. Under a defined contribution model, ER would provide workers with a fixed credit that could be applied toward health coverage in the exchanges; credit could be indexed to rate of gen inflation, which would make ERs health expenses more predictable. Despite interest in offering self-insured health through private exchanges, defined contribution approach not consistent w/self insurance. Although self-insured ERs can offer fixed credit to EEs to enroll in exchange plans, a self insured ER cannot completely cap its financial liabilities bc they are responsible for covering EE's health insurance claims (net of enrollee cost sharing). That is, self insured ER is ultimately responsible for paying EE's claims costs and acts as risk bearing entity for claims that are expensive/unpredictable.

What are the incentives and disincentives for providers to join a network? (Mod 5.4)

Provider competition is a powerful incentive to participate in a managed care network; if providers have an insufficient supply of patients w/o network participation, they will have a strong incentive to contract with an insurer. Lack of competition creates different incentives (ex: if all anesthesiologists in the area are in the same practice, they may have little incentive other than patient satisfaction to accept reduced payment rates offered by an insurer for essential service). Health system consolidation also may have unintended consequences for whether specific providers are included in a network.

A wide variety of term insurance products are available. Describe the yearly renewable term method of providing life insurance protection to individuals (Mod 12.2)

Provides life insurance for 1 year. Insured is permitted to renew the policy for successive 1 year periods with no EOI (showing good health). Under this method, yearly premiums increase as the individual gets older; they increase gradually during the yearly years and then sharply during the later years when they reach substantial amounts. Therefore, if an insured wants lifetime protection, the yearly renewal term method is impractical because the premiums eventually become prohibitive.

Provide examples of practice systems that make for consistent care for the common aspects of many acute, chronic and/or preventable conditions (Mod 6.2)

Real QI requires organizational focus. Continuing medical education has little effect on the medical care behaviors of participants and is clearly incapable of producing the large practice redesign changes that are now required - changes that are at the organization above individual clinicians. In practical terms, it means developing, implementing and maintaining practice systems that make care consistent: -Registries of patients with chronic conditions -Routine identification of risk factors during office visits -Paper/electronic systems to monitor whether patients are up to date on preventative services and whether consistent care is being provided for chronic conditions -Delegation of orders or delivery of many preventative/screening services to nursing staff -Coordination of care transitions between inpatient and outpatient settings and between primary/subspecialty care services -Care managers for patients with stable chronic conditions

What evidence is there that the federal government has tried to shift the burden of funding long term care to the care recipient and his/her family and away from publicly funded programs, like Medicare and Medicaid? (Mod 11.5)

Repealed on 1/1/2013, the Community Living Assistance Services and Supports (CLASS) Act was designed to shift cost of long term care away from gov't sources by providing financial resources to foster independence and to help alleviate the financial burdens of longer term care on family caregivers. This was just one initiative aimed at relaxing the burden placed on public long term care funding programs by encouraging individuals to purchase long term care insurance. As another example, the fed gov't dramatically expanded the availability of the Long Term Care Insurance State Partnership Programs, through which state gov't can promote the purchase of private LTC insurance by offering consumers access to Medicaid under special eligibility rules if additional coverage, beyond what policies provide, is needed. Medicaid, in turn, benefits by having individuals take responsibility for the initial phase of their long term care through the use of private insurance. In addition, the gov't has provided favorable tax benefits, marketing campaigns and Medicaid asset protections. Despite these gov't initiatives, long term care insurance ownership has remained disappointingly low. Only a small % of US population aged 45+ participates in LTC insurance.

Describe the demographics of individuals receiving SSDI payments (Mod 10.2)

SSDI beneficiaries have lower educational attainment than the general public, with somewhere between 50% and 64% having a high school diploma or less, and fewer than 20% having completed a post-secondary degree. In contrast, about 40% of all adults have a high school education or less. People receiving SSDI are also more likely than the average worker to have been in unskilled or low-skilled jobs prior to becoming eligible for benefits (nearly 70% report working in manual labor, retail or service jobs); nearly 50% work in service industries. The majority of SSDi beneficiaries are older - 70% are over the age of 50, 50% over 55 and 30% are over 60.

How is firm size related to the likelihood that employers will offer health care insurance? (Mod 7.1)

Small firms less likely than larger firms to offer healthcare insurance to their EE's. Approx 54% of firms under 200 FT EE's offer some type of healthcare policy to their EE's, while 98% of firms above 100 EE's offer it.

Discuss recommendations about how the compensation structure for brokers servicing self-funded health plans can be improved (Mod 7.5)

Small firms need expert help in evaluating insurance choices w/i the context of changing regulations. Unlike large firms, small firms do not have in house professionals w/expertise, so this presents an opportunity for brokers to expand roles. Brokers can go from simply negotiating price w/multiple insurers for a specific type of healthcare plan to assisting small firms in obtaining a comprehensive review of their healthcare plan, including whether a FI plan or self-funding makes the most sense for them. In the area of self-funding, brokers play an especially important role bc stop loss insurers do not generally want to get involved in revising healthcare plans (Ex: SL insurers will respond to a weak healthcare plan at a small firm by raising premiums and/or attachment points. By contrast, brokers can help design lower cost, higher quality plans that will attract lower bids from other SL insurers). It would make more sense for brokers to receive fees for each of the services they provide - carrying out careful assessments of their clients, making recommendations and acting as agents in securing contracts with third parties.

What are accelerated death benefits? (Mod 12.5)

Some GTL plans provide for the payment of all or part of the death benefit in the event of an insured's terminal illness. These ADB's have become increasingly popular and TPOs (called viatical settlement providers) have emerged to purchase the rights to life insurance benefits covering the terminally ill. HIPAA provides an exclusion from gross income under certain conditions by terminally or chronically ill individuals under a life insurance contract or upon the sale or assignment of such a contract to a qualified viatical settlement provider.

What are the findings of an analysis of a large dataset of STD and workers compensation claim systems and the implications for employers? (Mod 10.6)

Study reveals that claimants w/multiple claims are common and they cross over from one system to the other more often than risk and benefits managers may realize. Implications of these findings for ERs is that coordinated strategies to identify EEs with a high risk of repeat disabilities is necessary; must also cultivate their sustained engagement with remedial and preventative care efforts as they may yield various benefits. Regardless if claim was initially occupational or nonoccupational, remedial and preventative interventions could help mitigate costly medical treatments and lost productivity. Coordinated strategies valuable for management of costly occupational illness and injury claims. Nonetheless, managers of nonoccupational disability benefits stand to gain from the occupational system's depth of experience in RTW strategies. Risk and benefits professionals must recognize their mutual position as stakeholders in workforce health more generally. This will entail developing better info about the types of demographic and health risk factors that indicate a high risk for claims in either system. Encouraging risk and benefit professionals' involvement in their development, implementation and evaluation of preventative and remedial interventions could also help professionals recognize the advantages of a coordinated, organization-wide health and productivity strategy.

Describe the services TPAs might provide to self funded health insurance plans of small employers (Mod 7.3)

TPAs handle a broad range of admin services and scope can vary substantially. In general, most will arrange access to provider (physician/hospital) networks, pharmacy benefits, and review of claims. TPAs may also perform some of the customer services in lieu of brokers, such as enrolling EEs and resolving customer disputes. In many cases, TPAs are owned by large insurance companies that license out their physician network and help administer claims for self funded groups.

What are the major funding sources for LTC? (Mod 11.5)

The federal government, primarily through Medicaid and Medicare, provides the majority of funding for LTC services. Direct out of pocket spending also accounts for an important funding source. LTC insurance accounts for a viable, yet underutilized funding source.

What are disadvantages of an ER using a silo approach in managing occupation and nonoccupational claims? (Mod 10.6)

The silo approach many lead to missed opportunities to identify EEs who are at a high risk for future lost work time and to develop prevention/intervention strategies for costly recurrences of illness/injuries from crossing over from one disability system to the other.

Describe the likelihood of private exchanges offering self-insured plans (Mod 8.1)

Theoretically, private exchange operators may offer FI plans, TPA services to enable self-insured plans, or both. However, there is little info about how self-insured plans might be integrated into exchanges. Surveys of ERs indicate strong interest in using exchanges to offer self-funded. Most operators allow ERs to customize the suite of plans available, which supports the possibility of allowing both self/FI plans. Some operators may provide TPA services to enable ERs to seamlessly offer a mix of self-insured and FI products through a single exchange.

Describe briefly the steps stop loss insurers go through to UW a healthcare policy for an ER (Mod 7.3)

They begin by attempting to understand the previous healthcare experience of the ER and project a trend going forward. If a small firm has not previously offered coverage, stop loss insurers may rely on anonymized surveys of EEs to obtain data. Other factors for consideration include the geographic location of a company, its preferred physician network and the TPA selected by the ER. Finally, the stop loss insurer will review all the info and decide whether it will offer a policy.

The most appropriate segment of the population to which to market LTC insurance is the middle class. Discuss why the middle class has not yet embraced LTD insurance (Mod 11.1)

They do not understand the risks the LTC insurance would mitigate or they perceive coverage as too expensive. They also may underestimate future costs associated with LTC. Middle class individuals may also still depend on informal care arrangements, or they might put greater precedence on other retirement risks. Additionally, many recently retired baby boomers may be ineligible for private insurance (bc of UW requirements) or may be charged high premiums if they have already suffered a change in health status requiring chronic based care.

What types of death (life insurance) benefits are available through Employee Benefit Programs? (Mod 12.4)

They may come from social insurance benefits, such as workers compensation and SS, or through private pension plans, group life insurance plans, AD&D insurance or travel accident insurance plans. Most ER's provide death benefits, normally through group term life insurance to their covered EE's during their working years. In addition, retirement plans have survivorship benefits, such as payment of lifetime benefit to spouse of career EE who dies before retirement. Life insurance is also provided in some cases for dependent's of EE's and for retired EE's.

How does an individual qualify for SS disability insured status? (Mod 10.2)

To qualify for SS benefits for themselves and dependents, individuals must work in employment covered by SS or be self employed for a certain period of time prior to onset of disability.

How is the definition of disability addressed by PLTDI? (Mod 10.3)

To receive PLTDI, an individual must meet def of dis contained in policy - each policy varies: some require individual may not be able to do his or her own job (own/reg occ), whereas some require an individual be unable to perform any job (any gainful occ). Many policies will pay benefits for being unable to do own job for a certain period of time (ex: 2 yrs) and then require claimant to be unable to do any job to continue to receive benefits. Some pay partial benefits when an individual can work only part time and income has been reduced by certain % as a result of the disability.

Data show ERs have adopted the defined contribution model using private exchanges for what types of individuals? (Mod 8.2)

Today, use of defined contribution model is low. Use is more commonplace in retiree private exchange markets. The rules for reporting future liabilities, such as retiree costs, on company balance sheets in the 90's changed from pay as you go to an accrual basis, which caused many companies to begin offering a defined contribution for health & pension. Incidentally, defined contribution approach can be implemented w/o private exchanges.

What are the 6 goals promulgated (promote/put into law) by the Institute of Medicine (IOM) following the two landmark reports identifying widespread quality problems nationally within the US healthcare system? (Mod 6.1)

Two reports indicated widespread and pervasive cost/quality problems. The first IOM report, To Err is Human, quantified the frequency and severity of errors in hospital care while the second, Crossing the Quality Chasm, put those errors in a broad prospective and set six national goals for improvement: -safety -timeliness -equity -efficiency -patient centeredness -effectiveness (longstanding goal) "Between the healthcare we have and the care we could have lies not just a gap, but a chasm" Studies by RAND showed on average, acute, chronic and preventative care was only received by adults 55% of the time in 12 metro areas of US (similar child results). Subsequent reports only show incremental improvements. *IOM recently renamed Health and Medicine Division (HMD) by Ntl Academy of Sci,Eng,Med

How do PCMHs improve access to and enhance coordination of patient care? (Mod 9.4)

Unlike other developed countries, US patients do not have timely access to primary care. Also lack of communication b/w providers and patients in care delivery. PCMHs alleviate scheduling, communication and care issues through open scheduling, postvisit f/u and 24 hour access to primary care advice. Equipped with electronic health records, PCMHs have capability of mining historical data and implementing advance patient scheduling algorithms to reduce waste & increase efficiency, thus improving access. Entire PCMH model built on patient-centeredness; w/focus on patient needs and outcomes, improved quality of care.

What is the probability of a patient-plaintiff prevailing on a claim for breach of fiduciary duty in an out of network billing situation? (Mod 5.6)

Unlikely they would prevail; state courts have held that nonprofit hospitals have a fiduciary duty to the general public with regard to evaluating applications for staffing privileges and to provide the public with adequate facilities. The duties relate to the provision of care, not to payment. As such, hospitals' fiduciary duties have never been extended to include billing practices.

One study showed that more than half of involuntary inpatient out of network contacts occurred at in network hospitals. Discuss why ambiguous price terms in hospital admissions contracts do not cause the contracts to be unenforceable due to indefiniteness (Mod 5.6)

Upon agreeing to undergo treatment at a hospital, a patient assumes financial obligations toward the hospital and its physicians, as set by the standardized contracts b/w patients and providers. For a contract to be enforceable, an offer must be so definite in its terms that the promises and performances to be rendered by each party are reasonably certain. Unfortunately courts have recognized that the nature of medicine and the doctor-patient relationship require a different standard of definiteness that do more traditional exchanges. As a result, a patient who incurs a surprise medical bill from an out of network physician at an in network hospital is unlikely to escape his or her contractual obligation under a theory of indefiniteness.

What three elements characterize the "triple aim" in healthcare and what is meant by a "quest for value?" (Mod 6.1)

Urgent need to address "triple aim:" -Improving health -Enhancing patient experience of care -Reducing costs In addition, redesigning primary care and readjusting the balance between primary care and more specialized care are also critical. This quest for value entails pursuing higher quality and experience at lower costs. Ideals have clarified the need to change payment system from fee for service to one that pays for value rather than individual services alone - it is clearly necessary to redesign payment structure before or as part of redesign of care

Discuss why avoiding out of network providers may be difficult for employees (Mod 5.3)

Use of out of network provider is quite often not an informed or voluntary choice. Whether or not a provider is in-network, the amount the insurer will reimburse and the amount an out of network provider will require the consumer to pay are often not transparent to consumers. For some med specialties and some geographic areas, access to in-network may be limited, propelling some patients to go out of network; some cases, hospital based providers (anesthesiologists or radiologists) are not chosen by the consumer and may be out of network even when the hospital that is providing care is in network. Furthermore, emergency room care may also be provided by out of network providers (ACA imposes restrictions in event of emergency).

Quality improvement collaboratives (QICs) are considered a possible alternative or supplement to external facilitators in promoting QI. Describe QICs and their workings (Mod 6.4)

Used as an alternative/addition to external facilitators. Most well known QICs are those short term ones that have been run for specific topics by the IHI (Breakthrough Series). This approach grew out of an IHI reappraisal of the lack of demonstrable impact of its previous focus on courses and an annual national forum on quality. In the Breakthrough Series model, IHI hosts collaborative efforts by teams from 20-40 orgs that work together on a topic for 9-12 months through 3 two day learning sessions and a final presentation at a national congress, with work at home in between. Series are popular but expensive - attract mainly large delivery care orgs or those paid by gov't. Wide variety of other QICs have developed on regional basis or w/i large orgs. Oldest and most successful is Institute for Clinical Systems Improvement (ICSI) in MN...now cosponsored by all managed care plans in the state and w/medical group and hospital members consisting of 80% of state's physicians. Founded in 1993, ICSI began as way to develop local by-in for evidence based guidelines and soon moved on to emphasize implementation and improvement of broad quality topics. Evaluation of ISCI suggests that participating medical groups/clinics tned to evolve in their understanding and work on quality through 4 stages: -Implementation of specific guidelines, 1 at time -Implementation of combination of guidelines that use similar systems (preventative services) or relate to a specific condition -Development or remodeling of group's general systems and infrastructure for improvement of care -Redesign of the entire approach of the group takes to providing healthcare as well as culture of the group. Enough separate QICs have been implemented in the US that they now have their own national association (Network for Regional Healthcare Improvement) - efforts being made to identify characteristics that are important for QIC effectiveness. However, this evidence is limited by same problem that has limited all studies of QI medical practice - still inadequate financial advantage for high quality performance, much less for the prodigious effort needed to make substantive organizational changes.

What are the major uses and limitations of term life insurance? (Mod 12.2)

Uses is appropriate in three situations: 1) If PH income is limited and substantial amounts of life insurance are needed. Given relatively low level of term rates, substantial amounts of life insurance can be purchased for a relatively modest annual premium (AP). 2) Term insurance can also be used if the need for protection is temporary. 3) Term insurance can be used to guarantee future insurability if purchased with a conversion option. Two major limitations: 1) Since term insurance premiums increase with age and eventually reach prohibitive levels, term insurance is not suitable for individuals who need large amounts of life insurance beyond the age of 65 or 70. 2) Term insurance is also inappropriate for saving purposes since there is no buildup of policy cash value.

Describe the similarities and differences between variable life insurance and universal life (Mod 12.3)

Variable life is similar to universal life but with two major exceptions: 1) PH has variety of investment options for investment of cash values and can move money from one fund to another 2) There is no minimum guaranteed rate of interest and the cash value is not guaranteed (one exception is that a policy may have a fixed income account, which may guarantee a min interest rate on the account value). Such a policy has high expense charges, which reduce the investment returns and erode favorable tax treatment. Substantial investment risk falls entirely on the PH and investment returns vary widely depending on how they are invested. In a severe stock market decline (08-09'), a PH may have to pay additional premiums to keep policy IF.

What has been hypothesized about how private exchanges may affect ACA SHOP exchanges? (Mod 8.5)

Variety of claims: -Under ACA, all FI small businesses are part of the same risk pool and subject to same rating requirements, which allow premiums to vary only based on age, tobacco use, family size, geography and actuarial value of the plan. Private Exchanges (PE) could affect the STOP exchange risk pool if the encourage more businesses with healthier risk profiles to self insurer, thus leaving less healthy EEs in the FI small market. PE could also affect risk pool if they incentivize small biz to begin offering coverage (or preclude small biz from dropping coverage). Additionally, PE may affect SHOP exchanges if they siphon enrollment from SHOP - with lower participation in SHOP, their exchanges may not be able to collect enough revenue (through admin fees) to be self sustaining.

Describe how ER contributions can be established in private exchanges (Mod 8.2)

Variety of ways: -some ERs structure premium contributions based on richness of health plan (reference pricing): ER will set premium contribution as a % of a benchmark plan. Enrollees who wish to choose a more generous plan would pay full marginal cost of more expensive plan (Ex: small business may set ER contribution @ 70% of premium for lowest cost option. EEs could use this amount toward any plan) -In contrast to true defined contribution model, ERs that use reference pricing must update their contribution each year based on changes to premium for benchmark plan...if inflation is substantial, approach could lead to unpredictable increases in ER contribution over time. Also, choice of how to structure premium contributions may depend on industry and characteristics of workforce. Finally, important to keep in mind if EEs contribution to premium are above ACA affordability threshold, can lead to ER penalties.

Why has the federal government launched several demonstration projects in connection with the creation of PCMHs? (Mod 9.5)

Various reasons: -Still many unanswered q's about medical homes and their value has yet to be definitively tested. -Of particular interest is value for patients and their ROI in the form of cost savings downstream, especially long term. As a more definitive test in this regard, fed gov't has launched several important demonstrations to validate best practices, fill knowledge gaps and guide policy going forward.

What methods are used by various public entities for providing TDI? (Mod 10.4)

Vary from state to state; one state requires coverage is provided through an exclusive, state operated fund into which all contributions are paid and from which all are disbursed. The state does allow coverage ERs to provide supplemental benefits in any manner they choose. In other states, coverage is provided through a state operated fund, but ERs are permitted to contract out of that state fund by purchasing group insurance from commercial insurance companies, by self insuring or negotiating an agreement w/a union or EEs association. In other states, like NY, they require ERs to provide their own disability insurance plans for their workers by setting up an approved self-insurance plan, by reaching an agreement with EEs or union establishing labor management benefit plan or by purchasing group insurance from commercial carrier. In NY, ER may also provide protection through the State Insurance Fund, which is state operated competitive carrier.

Explain how universal life insurance is an important variation of whole life insurance (Mod 12.3)

Viewed conceptually as flexible premium policy that provides lifetime protection under a contract that unbundles the protection and savings components. Except for the 1st premium, the PH determines the amount and frequency of premium payments, which can be monthly, quarterly, semiannually, annually or a single payment. The premiums, less an explicit expense charges, are credited to a cash value account from which monthly mortality charges are deducted and to which monthly interest is credited based on current rates that may change over time. In addition, many universal life policies have a monthly deduction for admin expenses.

The possibility of a small ER in the post ACA environment moving from FI to self-insured has been discussed in early modules. It is possible also that emergence of exchanges might prompt some self-insured ERs to shift to FI. For what reasons would the shift be made and what would the impact be? (Mod 8.2)

While ERs typically maintain their current financing structure, when moving to private exchanges, there are exchange operators that only offer FI products and require ERs move to FI to participate. For ERs that already sponsor self-insured plans, the shift to FI could increase costs because of the risk premium charged by the insurer. Such ERs may also now have to pay state premium taxes on the full premium amounts rather than just on reinsurance premium. Additional drawback moving from self to FI is that they lose access to EE health cost data and therefore, will not be able to analyze health care cost trends in house. Another reason for the shift is that some benefits of exchanges, such as insurance carrier competition and increased plan choices, may not lend to self-insured models. Carriers acting as TPAs have no incentive to lower costs - some argue FI approach is an integral part of private exchanges since the reason for their existence is to drive efficiency through competition. Yet - still possible that there are incentives for TPAs to keep claims low for ERs - there could be arbitrage opportunities for competing TPAs. However, fundamentally, self insured accept more risk than FI ERs and may need to purchase additional stop loss to guard against catastrophic financial loss due to unpredictably high EE claims. Too early to tell if there is a general trend to FI.

Summarize both the potential of carefully chosen provider networks as well as the possible limitations associated with these care delivery mechanisms (Mod 5.5)

While carefully chosen provider networks are a powerful tool with the potential to steer patients to higher value health care providers, policy makers and plan sponsors should be mindful of potential problems: -lack of accurate info on network participation and cost transparency, -network inadequacy -involuntary use of emergency/other hospital based providers

What happens when an ER designates sick leave as FMLA leave? (Mod 10.1)

Will have policy designating sick leave as FMLA - has the effect of depleting a worker's 12 weeks of leave under FMLA.

The future success of PCMHs will depend on finding the right mix of payment options to adequately compensate staff and induce right incentives. What payment approach elements are typically blended in PCMH reimbursement method? (Mod 9.4)

Will vary, but nearly all approaches utilize a blend of pay for performance, monthly per enrollee payments (paid for all enrolled, not just those seen) and fee for service. A blended model has been broadly advocated for medical home demonstration projects. The Patient Centered Primary Care Collaborative (diverse, independent group examining medical home best practices), recommends payment model with 3 essential components: - Monthly care coordination payment supporting the medical home structure to provide predictable funding for practices -Visit-based, fee for service component relying on current volume-rewarded system to give practices incentive for providing service -Performance based component that recognizes achievement of quality/efficiency goals to encourage practices to improve quality/efficient Traditional fee for service based on office visits and does not always compensate physicians for services that are integral for PCMH concept, particularly time outside face to face encounter. Ex: phys answering patient e-mails - not reimbursed bc insurers do not always pay for these services. Therefore payers need to reimburse physicians for these activities or pay higher monthly fees to incentivize services. Both performance based on monthly per enrollee payments compensate for "off the clock" effort. Performance based rewards PCMHs for improvements in patient care measures related to chronic illness (diabetes, etc). Monthly per enrollee payment help physicians subsidize care coordination and costs for hiring new staff bc it does not vary according to how many patients are being seen; also designed to encourage improved access to care and to develop patient education/other services for chronically ill patients outside face to face.

Describe the current statutory environment with regard to sick pay for reasons other than work-related illness or injury (Mod 10.1)

With the exception of a few jurisdictions that mandate nonoccupational disability insurance, ERs have no statutory responsibility to pay individuals who are sick or injured and missing for work reasons other than those that qualify for workers compensation benefits. This regulatory landscape is slowly shifting as states and cities enact laws mandating paid sick leave.

Can LTC plans be tailored to meet the needs of only a few highly compensated EE's? (Mod 11.6)

Yes - or entire workforce. IRC does not place coverage limitation on LTC plans. IRC provides that "a plan may cover one or more EEs and there may be different plans for different EEs or classes of EEs."

Identify a) any settlement options available with respect to the payment of proceeds under a group term life (GTL) insurance policy and b) the purpose of an assignment provision in a GTL policy (Mod 12.5)

a) A covered EE or beneficiary generally may elect to have the face amount paid on an installment basis rather than a lump sum. The installments are paid based on master contract. However, optional modes of settlement based on life contigencies are seldom mentioned or guaranteed in master contract and thus insurance company practices at the time of the insured's death govern. b) GTL may generally be assigned to another person or entity. By absolutely assigning all incidents of ownership in GTL proceeds to another person, or an irrevocable trust, an EE can remove life insurance proceeds from his or her gross estate for federal tax purposes. This is an important estate planning technique for some EE's whose estates are potentially subject to federal state taxation.

Describe a) the history of PCMH and b) its connection to governmental policy (Mod 9.1)

a) Aims to engage patients & providers in a collaborative partnership that places patient as focal point, PCMH not new concept; Am Academy of Pediatrics originally introduced concept of medical home in '67 as coordinated care model for children - was adopted by number of specialty pediatric clinics to facilitate the management of patients with complex med problems. Subsequently, concept entered American healthcare discussion in early 2000s in response to issues w/primary care: lack of care coordination, lack of communication w/providers, frustration in regard to reaching physicians for q's/follow-up appts, perverse incentives for fee-for-service payment schemes. It is more focused on care - PCMH model strives to offer higher quality care for patients w/lower costs through timely, preventative services w/providers and enhanced patient engagement. b) PCMH concept being sent through gov't policy, particularly w/care model significantly embedded in ACA. Legislation's broad def of PCMH provides flexibility to meet healthcare needs of diverse communities and to encourage implementation. Federal funding designed to encourage diffusion of the model nationally and extend its applicability beyond pediatrics, since an expansion would be unlikely w/o gov't support.

List the advantages of the noncontributory approach to financing group term life insurance (Mod 12.4)

a) All EE's are insured (all those that completed WP and are actively at work). Thus, plan has maximum participation and minimizes adverse selection. b) Tax advantages; ER premium costs deductible as ordinary business expense. However, EE contributions under contrib plan generally are not tax deductible unless they are under an IRC Sec 125 Flexible Benefit Plan, but only up to a maximum of $50,000. c) Simplicity of admin. Records for individual EE's are easiter to maintain than under contributory plans primarily bc no payroll deduction d) Economy of installation. EE's need not be solicited for plan membership since all enrolled. e) Greater control of the plan. ER may have more control over changes in benefits under noncontrib bc (in absence of CBA), unilateral action may be more feasible when EE's are not sharing the cost of the plan.

Whole life insurance is a generic name for a cash-value policy that provides lifetime protection. Two common types of whole life insurance are ordinary whole life and limited-payment whole life. a) Identify the nature of ordinary whole life. b) State the uses and major limitation of ordinary whole life insurance. c) Explain the nature and use of limited payment whole life insurance. (Mod 12.2)

a) Also called continuous premium whole life and straight life, provides lifetime protection to age 121 and the death claim is a certainty. In addition, premiums are level and do not increase with age. Ordinary also has an investment or savings element - cash surrender value. Bc of the overpayment in the early years of the policy, the PH builds cash equity in the policy. Policy may be surrendered for its cash value or the cash value may be borrowed under a loan provision. Excess premiums paid in the early years are accumulated at compound interest and then used to supplement the inadequate premiums paid during the later years b) Ordinary whole life is appropriate in 2 situations: -When lifetime protection is needed. -When additional savings are required. The major limitation is that it leaves some individuals underinsured bc of high cost. c) Insurance is permanent and the insured has lifetime protection. Premiums are level, but they are only paid for a certain period. Most common are 10, 20, 25 or 30 yrs or life, paid up at the age of 65 or 70. An extreme form of limited payment insurance is single premium whole life insurance that provides lifetime protection for one single lump sum payment. Since premiums under limited payment policy are higher than those paid under ordinary life, cash values are higher. One drawback is higher cost compared to ordinary life, so the amount of permanent life insurance that can be purchased is substantially less than if an ordinary life policy were purchased.

Discuss how a) QI approach initially used within healthcare changed from its early use; b) the abbreviated approach substituted for the initial approach; c) a recent modification on abbreviated approach; d) a relatively recently reorganized understanding of where successful QI needs to be positioned w/i an org for effectiveness (Mod 6.3)

a) As QI has been implemented, it has evolved...not enough to understand factors affecting ability to improve quality. Each org must adopt a particular approach to QI that fits their culture and is feasible for leaders/change agents. When QI was first imported into medical care in the late 1980s (hospitals), usually adopted an approach of creating specific projects managed by QI teams - began with extensive data collection efforts to understand what needed improvement and developed a new process which was implemented after 1+ yr. Nt'l QI leaders recommend evaluating the change through more measurement after implementation and cycling back for further review. In practice, cycling back didn't occur b/c of organizational fatigue fatigue with long time development process. The culture of medical practice, focus on admin rather than clinical problems, insuff appreciation for leadership support and other problems led to discouragement of this QI model by mid 90's. b) Rather than lengthy early model, new model developed through leaders connected with Institute of Healthcare Improvement (IHI). Instead of many steps, model proposed QI teams answer 3 questions: -What are we trying to accomplish? -How will we know change is improvement? -What changes will result in improvement? Under abbreviated approach, QI teams start making small tests of change using the Plan Do Study Act (PDSA) cycle as they gradually develop pieces of a new system. As they do this, a solid understanding and application of systems thinking, measurement, variation and change management are needed, no matter what change is trying to be accomplished. c) A more recent modification on abbreviated approach referenced in b) is focused on microsystems, "the small, functional, frontline units that provide most healthcare to most people." Although term is also used for units that provide frontline specialized or inpatient care, the concept is particularly important in primary care bc it focuses on the strong, multidisciplinary teamwork that appears necessary to improve quality. d) Becoming increasingly apparent that successful QI needs to be positioned effectively w/i organization...means QI effort must be incorporated into normal management of primary care org rather than being conducted as special projects using ad hoc teams of volunteers. Many of latest strategies still apply, but if QI effort is led by or reports to Sr Mgrs and is conducted by leaders, more likely to be implemented thoroughly & sustained. Applies just as much to 1 or 2 phys practice as larger.

With regard to EE paid LTC insurance premiums, what is the relevance of a) Section 1035 Exchanges and b) Section 125 Plans? (Mod 11.6)

a) The Pension Protection Act enables 1035 exchanges of existing annuity products to qualified LTC policies. This could be a potential issue for financing an LTC policy w/o any adverse tax consequences. b) Employers are not allowed to enable EE-paid premiums for qualified LTC insurance coverage through a Sec 125 plan or a flexible spending account. LTC insurance is specifically excluded from these types of plans.

State (a) the factors that should be considered in deciding the amount of insurance to include in an EE group term benefit schedule and (b) the types of benefit schedules that can be used, including the most common type in use (Mod 12.4)

a) These include, the EE's needs, the overall cost of the plan, the nondiscrimination requirements of the law and the ability of the EE's to pay if the plan is contributory. b) Group term life insurance benefit schedules provide a flat benefit amount for everyone covered or relate benefits to earnings, occupation or position, or length of service. Most common type bases amount of insurance on the EE's Earnings (i.e. 1-2x etc)

There have been several major areas in actuarial pricing assumptions for LTC products where reality turned out to be quite different from prior expectations. What were these assumptions that turned out to be incorrect and how were they wrong? (Mod 11.3)

a) Investment income was lower than expected and has been insufficient to fund liabilities. This resulted from interest rates remaining low for so long. b) Lapse rates turned out to be lower than expected. When a PH lapses or dies, his or her accumulated reserve is distributed to those who remain in the pool. Lower than expected active life terminations result in less than expected funds distributed to survivors and therefore, inadequate assets to fund benefits. c) Morbidity experience was higher than expected. Because LTC products are relatively new, there was not a large degree of credibility with experience when these products were priced. In addition, there is not yet a standard LTC morbidity table that companies can use to increase data credibility ,which is especially a problem for insurers just entering the market when they cannot even rely on baseline projections. d) Higher than expected margins were needed to account for adverse selection. The average issue age has trended younger recently and with persistency rates continuing to fall, the duration of claim liabilities is lengthening so as to create significant long tail risk. As the time horizon for blocks of LTC business increases, the confidence in model projections, especially those incorporating any type of lifetime guarantees, becomes shaky.

List the reasons that insurance companies have been dissatisfied with the LTC insurance product structure (Mod 11.3)

a) LTC Insurers have been subject to reinvestment risk; Since interest rates have been low for so long, insurers are forced to invest cash flows from expiring assets at rates lower than what was previously assumed. b) Asset and liability mismatch problem; duration of LTC liabilities can be 20 yrs or more, but it is difficult to find assets with such long durations. c) Use of genetic info in UW; concerned that GINA may prevent the use of genetic info for UW, but potential PH may be this personal info, creating a solution for adverse selection. d) Use of unisex rates; LTC policies have typically employed unisex rates, but that can be viewed as inequitable since males have much lower claim costs than females. e) Negative consequences when applying for rate increases; bad publicity and even expensive class action lawsuits can result from applications to increase rates. f) Fewer agents and advisors discussing LTC insurance with their clientele. g) No increase in actuarial expertise for LTC products. h) Moral hazard. Beneficiaries (and their providers) may have a financial incentive to create or maintain disability. i) Claim criteria. It is hard to objectively specify claim criteria due to complexity of disability. j) Data security issues. As systems moved online, data security concerns (identity theft/confidentiality) have increased.

List the advantages of the contributory approach to financing group term life insurance (Mod 12.4)

a) Larger Benefits. More liberal benefits are possible if EE's contribute. b) Better use of ER's contributions. ER funds may be used more effectively by sharing cost of benefits for EE's who have greatest needs and who are most likely to be long serviced EE's. c) EE's have more control; afforded greater voice in benefits since they are paying part of cost. d) Greater EE interest; EE's may have greater interest in plans to which they are making a contribution.

Describe a) how ER's provide GTL coverage for retired EE's and b) the general guidelines an ER must follow in providing life insurance coverage for active EE's after the age of 40 (Mod 12.6)

a) Many ER's continue reduced amounts of GTL on retired EE's under various types of reduction formulas. Bc continuing GTL on retirees is costly, ERs may consider funding through some other means such as group paid-up or a separate side fund. b) Life insurance coverage amounts for active EE's after Age 40 are strongly influence by ADEA (Age Discrimination in Employment Act). Essentially, EEs age 40 and above are considered a protected group - plans may be cut back, but individual plans must be actuarially analyzed to determine actuarial cost differences. The guidelines allow cost-justified reductions that permit an ER to 1) reduce an EE's life coverage each yr starting at Age 65 by 8-9% of the declining balance of the life insurance benefit or 2) make a one time reduction in life insurance benefits at the age of 65 from 35% to 40% and maintain that reduced amount until retirement. An ER also may be able to cost justify greater reductions in GTL benefits on the basis of its own demonstrably higher cost experience in providing GTL to its EE's over a representative period of years. ADEA also permits use of benefits package approach for making cost comparisons for certain benefits, as long as the overall result is no less cost to the ER and is no less favorable in terms of the overall benefits provided to the EE's.

a) Do ACA demonstration projects, existing guidelines and the standards promoted by recognition bodies provide enough impetus for encouraging adoption of PCMHs on a national scale? b) What areas seem to need improvement in order to achieve potential offered by PCMHs? (Mod 9.6)

a) Not yet - future adoption rests on response to demonstration projects and the nature of amendments made by recognition bodies like NCQA. Changes may be needed to further the right level of adoption and to ensure comparability, as well as to promote more rigorous standard for governance and implementation consistency; policy should be amended in terms of funding, timeline, practice setup. b) Three main areas for improvement: 1: funding methodology - critical to maintain ongoing funding/financial support for long term transformation into PCMH. 2: expected timeline for transformation - many political/healthcare leaders want immediate results for medical home projects, but must have realistic expectations. After 2-3 yrs, many PCMHs can accurately assess progress made for patient populations, whereas some could take longer. Full transformation is a long and challenging process for team development, tech implementation and financial stability. Underlying challenge is the need to do more in managing neglected functions related to chronic care - involves reorganization and teamwork to manage time and resources. 3: variation in reimbursement methods and medical home setups - could make comparisons difficult; policymakers want practices to participate, but they also need to measure improvement to determine if PCMH is worth pursuing on a larger scale. More stringent requirements (esp from NCQA) would lead to better comparability of outcomes. Criteria could be ranked on order of importance, allocating more points for transformative steps deemed most important (Ex: if evidence based guidelines, health info tech and improvements in patient access are 3 most important initial components, these 3 should command greater weight in assessment or simply be required for tier-1 recognition.

a) What is a patient-centered medical home (PCMH) and b) How has this concept been included in the Patient Protection and ACA? (Mod 9.1)

a) PCMH emerged as alternative practice model aimed at reducing costs, coordinating care, utilizing health info technology and ultimately, obtaining higher quality/better outcomes for patients. A PCMH is a healthcare delivery practice that actively engages patients in coordinated care - equipped with integrated health info tech system and supported by appropriate payment arrangement that recognizes the added value of patient-centered components. b) Concept is woven into Patient Protection & ACA (2010) and is broadly defined in Sec 3502 of that act to further population health initiatives for communities, as well as preventative health and ongoing care for chronic illness. Sec 3502 of ACA calls for healthcare providers involved in medical homes to develop and implement interdisciplinary, interprofessional care plans that integrate clincial and community preventative & health promotion services for patients.

Consumers have been and continue to be generally resistant to buying LTC Insurance. What are the complaints consumers have about this coverage? (Mod 11.3)

a) Rate increases have accompanied many LTC products; these have publicly eroded the public trust in insurance companies that sell LTC. NAIC rate stabilization law of 200 was meant to make rate increases raw, but frequency of requests has been increasing due to inconsistently adverse experience that has developed. b) Inability to walk away from their policy after large rate increase. PH who are facing increases cannot simply change carriers bc their higher age and health status may make new entry level premiums even higher than current renewal. PH who choose to lapse get back nothing, despite large premium payments in the past. c) Laborious process required to receive benefits; PH complain about claims process - mountain of paperwork and many phone calls. d) Too expensive (resist purchasing due to cost). NAIC suggests EEs should not spend more than 7% of annual income on LTC insurance. Following rule, many cannot afford it. e) LTC does not fully cover the entire elderly disabled population. About 50% do not meet eligibility requirements for tax qualified LTC due to ADL trigger or cognitive impairment trigger of HIPAA. To be eligible, individual must be unable to perform 2 ADLs for 90 days OR if he or she requires "substantial supervision to protect themselves from threats to health and safety due to severe cognitive impairment." f) Using genetic testing in UW. Studies have shown strong link b/w genetics and likelihood to develop Alzheimer's. Genetic testing can identify presence of these gene markers which, if allowed as rating factor, would increase rates on those affected. However, consumers feel unfair to discriminate based on genetic factors since no one has control over genetic composition.

Differentiate among the various disabilities and benefits of workers compensation systems and identify the most prevalent (Mod 10.6)

a) Temporary Total Disability: Most compensation cases that involve cash payments are for temporary total disability. In these cases, EE is temporarily precluded from performing the preinjury job or another job with the ER the EE could have performed prior to the injury. Most workers who receive these benefits fully recover and return to work, at which time benefits end. Most states pay weekly for temporary total disability that replace 2/3rds of the worker's preinjury wage (tax free), subject to a dollar maximum that varies from state to state. b) Temporary Partial Disability: In some cases, workers RTW before they reach maximum medical improvement and have reduced responsibilities and a lower salary. In these cases, they receive temporary partial disability benefits. c) Permanent Total Disability: If EE has significant impairments that are judged to be permanent after he or she reaches maximum medical improvement, worker receives permanent total disability; very few workers comp cases are found to have permanent total disability. d) Permanent Partial Disability: When EE has impairment that, although permanent, does not completely limit the worker's ability to work, permanent partial disability benefits are paid. The system for determining benefits in these cases is complex and varies across states. e) Death Benefits: Generally, compensation is related to earnings and to the number of dependents eligible as survivors of workers who die from a work related illness/injury. f) Medical Benefits: Most cases do not involve lost work time greater than the 3 to 7 day waiting period for cash benefits. In these cases, only medical costs are paid. Medical only cases are quite common in workers comp, but only represent a small share of overall payments.

Explain how a) the 31 day continuation of protection provision and b) the continuation of insurance provision of GTL policies operate (Mod 12.5)

a) The 31 day continuation of protection provision gives a terminated EE an additional 31 days of protection while evaluating the conversion privilege or awaiting coverage under the GTL plan of a new ER. b) The continuation of insurance provision allows the ER to continue the EE's GTL IF for a limited period, on a basis that precludes adverse selection during temporary interruptions of continuous, active FT employment. Some states have a state required COBRA type option for the continuation of GTL rather than for medical insurance.

Indicate the status of the LTC insurance market in terms of (a) concentration among insurers and (b) individual vs group sales (Mod 11.3)

a) The LTC Market is very highly concentrated, with a small number of companies dominating the marketplace. b) Individual sales of LTC are much greater than group sales.

The typical LTC legacy product is flawed for several reasons and has produced an imbalance of risk and flexibility for both the carrier and the consumer. List the reasons this is the case (Mod 11.4)

a) Typical LTC product was designed to satisfy multiple constituents (health code, insurance code) at the unintended expense of consumer. b) Legacy products build up level premium equity and require the PH to lose it if he or she exits the policy. c) Legacy products are supported by investor capital, whereas the typical whole life contract does not rely solely on investor capital. d) The legacy LTC carrier bears tremendous risk by attempting to project and match assets to liabilities for time horizons of up to 40 years. e) Legacy carriers have made 40 year assumptions with respect to morbidity.

Briefly describe five essential features of group insurance (Mod 12.4)

a) Unlike individual insurance, group insurance makes use of group selection under which an entire groups is insured w/o medical examination or other EOI (some plans may require EOI for benefits in excess of a specified amount). b) Premiums on a group insurance plan generally are subject to experience rating under which the cost of insurance reflects the group's own loss experience. c) Economies of admin are possible under a group plan in the form of admin efficiencies, such as payroll deduction, etc.. d) Group insurance makes use of a master contract containing all conditions concerning coverage. Individuals covered by the plan may receive a Cert showing proof, types and amounts of coverage. Insureds also receive a booklet (summary plan description - SPD) describing the plan in easy to read language. e) The existence of the master contract indicates that the plan may last long beyond the lifetime (or participation in the group) of any one individual.

Explain the following terms: a) waiting period b) benefit period c) pre-ex limitations d) inflation protection (Mod 10.3)

a) WP = time person must wait after illness/injury while they are unable to work before benefits are payable. Typical is 6 mo, range from below 6 mo to up to 365 days. Also called EP. b) Benefit period = PLTDI policies may limit amount of time claimant can receive benefits; some offer lifetime, some offer set # of years (ex: 2 to 5, etc). Many pay benefits to age 65 or SSNRA - it is not uncommon for benefit periods arising from MH or SA to be significantly shorter (limited to 24 mo) than those arising from actual physical conditions. c) Pre-Ex = PLTDI may have restrictions on coverage for pre-ex. For ER sponsored group plans, coverage cannot be denied to EE who enrolls during the initial enrollment period. However, can include exclusionary period (usually 1-2 yrs) in which there is no coverage for a Pre-Ex. d) Inflation protection = For higher premium, plans may include COLAs.

What other factors, besides changes in out of pocket maximums, add complexity to estimating the effect of out of pocket premiums on health plan choice? (Mod 5.2)

-Availability of other plan substitutes within and outside the EE's own firm -Introduction of a different ER contribution structure -Degree of choice of providers among the plans being offered -EE's Age & Household Income -Presence of chronic disease in EE household Studies show inclusion of workers who had different options (outside of firm) led to bias - lower estimates of price sensitivity of changes in out of pocket premiums. Other studies show 26% of EE's changed plans when faced with a $10 increase and 30% with $20 increase.

List top strategies large employers are considering to improve health and reduce healthcare costs (Mod 1.6)

-Develop/enhance workplace culture so employees are responsible for own health -Develop/expand healthy lifestyle programs -Make changes to avoid excise tax ceiling -Adopt/expand use of financial incentives to encourage healthy activities -Review healthcare benefits in total rewards context -Analyze viability of private exchanges -Expand enrollment in account based health plans (ABHPs) -Adopt/expand use of new technologies to improve health engagement and cultivate more informed consumers of healthcare -Redefine company subsidy for healthcare

Describe the transactional components that must take place for transformation to value based care to work (Mod 1.7)

-Health systems w/multispecialty practices and sufficient primary care resources build high performance networks w/population health management infrastructure. Needs to manage the balance b/w traditional FFS reimbursement and compensation structures aligned with managing cost/quality of population -Payers enter partnerships with high-performance networks that execute a service contract to manage health, cost and outcomes of population (or attributed live/downloaded risks) on a fixed fee, shared savings, shared risk or other financial model except FFS reimbursement -Employers implement the 6 components of eACOs and enter into contracts directly with health systems or with payers who have those partnerships to deliver value based care.

What are broader implications of the findings outlined in the study between prices and plan behavior? (Mod 4.1)

-Insurers and consumers generally should encourage entry of new and additional capacity in local health care market as means of reducing prices. -If managed care plan has relatively small network of providers, it is likely to be able to negotiate lower prices in exchange for higher volume to providers with contracts. In contrast, a managed care plan with a large network relative to subscriber based less able to negotiate cost. -If local hospital market has idle capacity, many if not all local hospitals will incur losses until one or more facility close. -Certificate of need laws have real potential to keep hospital prices high by keeping new competitors and/or additional capacity out of the market. -The merger of several pediatric groups in a market will likely result in higher prices charged to managed care plans.

Based on study examining the relationship b/w prices and plan behavior, describe how certain elements affect the price negotiation in selective contracting (Mod 4.1)

-Other things being equal, the insurer was able to negotiate lower hospital prices when there were more hospitals in the local market. -The insurer obtained a lower price when it had a larger share of the hospital's book of business. -The insurer obtained a lower price when the hospital had little bargaining power; however if the local market conditions led hospital admin to conclude that a plan's subscribers would change plans to continue to have access to its hospital, then the hospital had leverage and prices remained high. -Controlling for all foregoing effects, the insurer was able to get a lower price when the hospital had a lower occupancy rate. Hospital marginal costs are lower than average costs. Thus, so long as a hospital is able to negotiate a price that covers its marginal (extra) costs of providing services, it should accept the lower price offered, even if lower price only makes a small contribution to fixed costs.

Summarize ACA with regard to: 1) Pay or Play Mandate 2) Minimum Level of Benefits (Mod 1.5)

1) ERs with 50+ EE's who work at least 30 Hrs/Week on Average; gives ER choice to pay or play with respect to sponsoring EE Benefits. ER who fail to offer qualified health benefits to EEs must pay a penalty per EE per year. EEs who are cut loose by ERs who pay the penalty must obtain coverage elsewhere bc of the individual mandate, or they will pay a penalty too - can purchase a plan on state/federal exchange, with tax subsidies available for low to middle income individuals. If EE chooses to play, must follow all rules of ACA. 2) ER covers at least 60% of covered expenses, expressed as actuarial value of 60%. Considered a floor because they represent the bottom/min level of benefit that can be offered to EEs with triggering penalties.

List several recent initiatives in the US that purport (to claim, often falsely) to use market forces to increase efficiency in the healthcare system. (Mod 1.1)

1) Employers are offering more HDHPs with some as high as $10,000. These plans, often paired with HSAs, are coupled with the idea of transparency, or making more info available to consumer on cost and quality. Idea is that consumers will have more skin in game and be prudent purchasers of care with their own money. 2) ACA is creating marketplaces that employ a form of managed competition where standardized health plans compete on cost and quality. 3) Public Medicaid and Medicare programs are moving towards requiring or making choices available for managed care products that structure care within provider networks.

Describe three types of physician compensation arrangements under managed care plans (Mod 4.3)

1) Salary Arrangement - imply no direct link between quality or quantity of physician effort and the physician's compensation 2) Fee for service - physician or medical group is paid directly on the basis of volume...more office visits mean greater fees and revenue 3) Capitation - physician or medical group is paid on basis of number of covered lives for which they are responsible; physician or medical group will only make money if the visits they provide and the services they order cost less than the capitated amount.

Discuss 3 key points that emerge from the process of risk adjustment for the purpose of setting health insurance premiums (Mod 3.1)

1: Even the most complete set of measures explains only a small proportion of the variance in an individual's use of health services. If utilization was wholly predictable based on readily available measures, no role for insurance 2: Some sets of measures are better predictors of health services use than others (prior question), however dismissing the predictive abilities of the other measures is a mistake. The ability to predict even a couple % points better than others can yield a substantial competitive advantage provided it can be done at low cost 3: Statistical modeling has limits; presumption in risk adjustment is that statistical methods will eliminate the least costly efforts to attract low utilizers and avoid high utilizers - might be so but other approaches implicitly contain more/better info on the future use of health services than those contained in stat models.

What are the 10 guiding principals in Medicare's risk adjustment approach? (Mod 3.2)

1: Health Status Related measures should be clinically meaningful. This means they should have face validity and be sufficiently clinically specific to make it difficult for plans to assign a beneficiary with a vaguely defined condition into a higher payment group. 2: Measures should predict both current and future medical expenditures. Thus a transitory (temporary) condition such as an ankle sprain would not be a useful measure. 3: Measures should be large enough sample sizes that they yield accurate and stable predictions. 4: Related clinical conditions should be treated hierarchically, while unrelated conditions should increase the level of payment. Thus, someone identified as having had a recent heart attack and having unstable angina (low heart blood flow) would only be counted as having the more severe condition rather than both; however someone with unstable angina and lung cancer is counted as both. 5: Vague measures should be grouped with low-paying diagnoses to encourage specific coding of health conditions. 6: Measures should not encourage multiple reporting of same/related diagnoses. Thus, hierarchy of related conditions should be used and only most severe condition coded. 7: Providers should not be penalized for reporting many conditions; thus no condition should have a negative payment associated with it and a more severe condition must pay at least as much as a less severe manifestation. 8: Transitivity must hold. If condition A results in a greater payment then B and B is paid more than C, A should be paid more than C. 9: All of diagnoses that clinicians use have to map into the payment system. 10: Discretionary diagnostic codes should be excluded to prevent intentional or unintentional gaming of the system.

ACA called for the creation of health insurance exchanges administered by either federal or state governments through which individuals and many small firms can buy health insurance. Plans offered through these exchanges may not use health status or Pre-Ex conditions to grant coverage or set premiums. Which 3 provisions of ACA aimed to address concerns over possible substantial differences in claims experience across insurers leading to premium volatility (Mod 3.3)

1: Risk Adjustment 2: Reinsurance 3: Risk Corridors -All created to promote insurer competition on the basis of quality and value; and to promote insurance market stability, particularly in the early years of reform. While risk adjustment program is permanent, reinsurance and risk corridors expired in 2016. These were added for initial ACA measures taken to limit adverse selection and risk selection.

What is Medicare Part C and why do some people select it? (Mod 1.4)

AKA Medicare Advantage: -Recipients have the option to enroll in a health plan with a narrowed network of hospitals and providers that covers Part A and B but with lower out of pocket costs. These plans often include their own prescription drug coverage. Unlike Part D, this is a voluntary choice and beneficiaries always have the option of going back to the traditional plan. It is a choice to restrict options and consolidate the different elements of Medicare, including cost sharing. People select these plans because of lower costs and greater care coordination. Like Part D, Part C has significant state variation.

What is adjusted community rating? (Mod 2.5)

Adjusted community rating uses the HMOs entire pool of utilization experience and applies specific characteristics of a firm to weight these data to better reflect the characteristics of the employer's workforce. The plan uses the firm's own contract mix and contract size applied to the charging ratios to weight the poolwide data. Contract mix refers to the proportion of single, two part and family contracts within a firm; contract size refers to the average # of people in a family; charging ratios refer to the difference in claims costs between two party and family coverage, relative to single coverage. With adjusted community rating, firm's own contract mix and family size are multiplied by the average charging ratios to produce an adjusted rate.

What is the approximate percentage of workers in partially or completely self-insured health plans? (Mod 2.4)

Approximately 60%

What is the basic assumption underlying concept of a free market and how is it challenged by the theory of "bounded rationality?" (Mod 1.1)

Assumption that rational customers will make informed decisions about value, quality and price, while producers who meet consumer's demands will be rewarded with market share and profit. However this is challenged by the consumer's "bounded rationality" - rational consumer is only functional up to a certain point because choices are constrained or bound by limited knowledge and understanding of their choices.

Discuss findings of 1986 study investigating the extent to which HMO enrollment was a function of price differences between the plans offered (Mod 5.1)

Author of study found that a 10% increase in the monthly out of pocket premium had a short run effect of reducing the HMO share of a firms subscribers by 2% and a long run effect of a reduction of 6%. Since the ER paid approximately 90% of the premiums of the firm being studied, a 10% premium increase would cause a 20% reduction in the insurers' market share almost immediately and a 60% reduction after workers had time to explore options and fully adjust to the new set of premiums.

Explain the consequences of combining groups with significantly different claims experience into the same risk pool (Mod 2.6)

Combining dissimilar risks into the same risk pool produces lower premiums and more coverage for high-risk groups but higher premiums and less coverage for low-risk groups.

What is community rating by class? (Mod 2.5)

Community rating by classes uses the same adjusted community rating factors but adds analogous adjustments for the industry and for the age/gender mix of the group. It is important to note that neither the adjusted community rating nor community rating by class is in any way based on the firm's past or current claims experience (not experience rated methods).

Explain the concept of community rating. Is it relevant in today's market? (Mod 2.3)

Community rating is a rating system in which all individuals/groups are placed in single risk pool (used by BCBS in early years, by HMOs well in 1970s). In today's markets, sometimes advocated by proponents of universal health insurance. Community rating is the basis of some other modern rating systems. Insurers compute the actual claims experience per covered life for the recent past and project that value forward for general inflation and anticipated changes in real medical care costs/patterns of utilization. They add in admin costs, profit and contributions to reserves in case utilization is worse than expected. They then subtract the investment on premiums and reserves held.

Why does ACA's guaranteed availability of insurance raise concerns of adverse selection? (Mod 3.3)

Consumers who are most in need of health care may be more likely to purchase insurance...such an outcome would create adverse selection problem and lead to higher average premiums, thereby disrupting the insurance market and undermining goals of reform. Uncertainty about health status of enrollees could also make insurers cautious about offering plans in a reformed individual market or cause them to be overly conservative in setting premiums. To discourage behavior that could lead to adverse selection, the ACA makes it difficult for people to wait until they are sick to purchase insurance (limiting OEs, requiring individuals to have insurance or pay a fee, providing subsidies to help with cost).

What are two major factors that determine the size of the loading percentage? (Mod 2.1)

Differs greatly between group and nongroup markets. One study found 10% average in group and about 50% in individual markets; loading fee also varies by firm size, with smaller loading percentages for larger groups. In additional, the the size of the loading percentage is going to depend not only on the actual marginal costs of running the insurance plan but also on the nature of competition the insurer faces.

Employees' demand for health insurance (take-up rates) has been inching somewhat downward. To what extent can this trend be explained by higher out of pocket premium contributions? (Mod 5.2)

EE decisions regarding whether or not to accept coverage from their ER is very different from decision regarding which of ER's plan offerings to take. EE's may have fewer good insurance substitutes beyond their own ER sponsored coverage. As a result, one would expect much less price sensitivity to higher out of pocket premium contributions. Study findings are mixed - estimates of price responsiveness indicate that out of pocket premium only has minor influence on decision to decline coverage.

Provide an example of a center of excellence pricing model (Mod 4.4)

Employer designates a world-renowned medical center (ex Cleveland Clinic) for nonemergency cardiac procedures (angioplasty, bypass). The employer develops a single national contract with the clinic and then an employee with a serious heart problem covered by the designated center of excellence services may use a local hospital or go to the clinic. If the EE stays local, he or she faces a $500 deductible and must pay 20% coinsurance. If they opt to attend clinic, the EE may owe nothing out of pocket and is reimbursed for travel costs as well as those of a companion. This is an example of channeling, used to drive patient volume and presumably result in lower negotiated prices. Data on the success or failure is not publicly available.

Discuss consumer choices for Physicians and Hospitals in the Medicaid Program (Mod 1.4)

Federal government mandates open choice to both Phys & Hospitals; however, in the 90s, states could obtain waivers for this provision and require Medicaid recipients to enroll in a limited-network managed care plan (most states did). Continued movement to Medicaid Managed Care Organizations (MMCOs) - with comprehensive coverage paid on a risk basis. MMCOs receive a per-member, per-person payment to provide defined set of benefits for all. Traditionally, Medicaid pays physicians much less than private insurance or Medicare - this limits the number of physicians who may take Medicaid, which will limit choice.

Identify two key components of the shift away from FFS to value based care (Mod 1.7)

Focus on eliminating waste - spending on services that lack evidence of producing better healthcare outcomes compared to less expensive alternatives; inefficiencies in the provision of health care goods and services; costs incurred while treating avoidable medical injuries (preventable hospital infections); fraud and abuse. Another key component includes improving access to appropriate medical care at the right time, place, cost and result. Includes the availability of facilities & technologies during evenings, weekends and other off-peak times, as well as the growing use connected technology where patients can speak directly with clinicians in a live video chat in their homes, etc.

Discuss growing trend of low-cost and on-site health care clinics (Mod 1.6)

Growing trend of low-cost retail clinics and telemedicine options offers promise of lowering cost of on-demand care. Ex: CVS Minute Clinics; includes flu shots, low acuity clinical visits on demand, physicals, etc. Offers wide range of services from prevention/basic triage to management of chronic conditions (diabetes/HD) - supported by nurse practitioners and web based technologies; could provide cost relief but could also exacerbate the problem of fragmentation in healthcare where coordination of care is needed.

Describe several ways the US Healthcare market does not function like a normal market. (Mod 1.1)

Healthcare market has significant asymmetry in information between consumers, providers and insurers. Moral hazard is a problem because the marginal cost of covered care is zero, causing some to overconsume medical care. Many consumers choose doctors initially by convenience, accessibility or recommendation. Cost has also been shown to be lower on priority scale for choosing a provider.

What does research suggest regarding the impact of managed care of the prevalence of self-employed physicians? (Mod 4.3)

Managed care leads to somewhat fewer self-employed physicians.

What is the difference between Medicare and Medicaid? (Mod 1.4 - Reading)

Medicare: Medicare is a federal program attached to Social Security. It is available to all U.S. citizens 65 years of age or older and it also covers people with certain disabilities. It is available regardless of income. Medicaid: Medicaid is a joint federal and state program that helps low-income individuals and families pay for the costs associated with medical and long-term custodial care. The federal government funds up to 50% of the cost of each state's Medicaid program, with more affluent states receiving less funding than less affluent states. Because of this federal/state partnership, there are actually 50 different Medicaid programs, one for each state. Medicaid is also often used to fund long-term care, which is not covered by Medicare or by most private health insurance policies. In fact, Medicaid is the nation's largest single source of long-term care funding.

Describe the various methods insurers use to determine out of network benefits? (Mod 5.3)

Methods insurers use to calculate provider reimbursement for out of network benefits vary, but most commonly it is capped using either a percentage (140% to 250%) of Medicare rate or usual/customary rate (UCR). There is not one generally accepted UCR formula - it is often calculated employing a percentile (80th) of all billed charges for a specific service in a geographic area. The individual is then responsible for any coinsurance on UCR, the deductible and the balance bill. Accuracy of the insurer's calculation of UCR has been called into question by one large state - investigation concluded these faulty practices resulted in an inappropriately low UCR and thus low reimbursement to providers and higher than expected out of pocket costs for consumers. As part of settlement, independent nonprofit (FAIR Health Inc) was established to manage reimbursement database and improve transparency in provider prices. More recently, several insurers have abandoned the UCR and are reimbursing as % of Medicare rate and since Medicare rate is often lower than UCR, this practice has also increased balance for patient.

What is single strongest drive of healthcare cost? (Mod 1.6)

Misaligned incentives for providers created by fee-for-service (FFS) reimbursement. Single most significant opportunity to lower cost and improve health/healthcare outcomes can be found in full implementation of value-based care. Fee-for service (FFS) is healthcare's most traditional payment model where physicians and healthcare providers are reimbursed by insurance companies and government agencies (third-party payers) based on the number of services they provide, or the number of procedures they order. Payments are unbundled and paid for separately. Big struggle is that even though some of these may not be needed, or supported by evidence-based data, still offered. Value-based care (holistic) is a philosophy of healthcare realized when clinicians intentionally consider the quality of care provided, and the overall outcomes of that care, in relation to cost-efficiency. In the value-based care model doctors and specialists consider "best practices" when treating patients, since they are reimbursed for the quality and efficiency of care they provide. When successful, physician entity groups receive incentive payments for providing better care for individuals at a lower cost.

Why is it difficult to determine the size of price concessions that managed care plans can negotiate with hospitals? (Mod 4.2)

Not easily answered b/c hospital pricing strategies are complex and data is not publicly available...Ex: While hospitals have a nominal price list that is referred to as full billed charges (like new car sticker), virtually no one pays full bill charges. Appears to be no direct relationship b/w size of discount and actual price of hospital services. One hospital may set very high billed charges and grant very large discounts. Another may set more modest charges, give small discounts and still end up offering a lower actual price. Nonetheless, it is not uncommon for discounts to be as high as 75% - typically closer to 60% but vary substantially for reasons that may have to do with systematic hospital pricing strategies, competition and the extent of bad debt/charity care provided.

Explain in words the concept of objective risk in health insurance (Mod 2.2)

Objective risk is dispersion (measured by standard deviation, variance or range) in losses related to some measure of expected losses AND the number of covered lives. Objective risk declines as the size of expected losses increases. As the law of large numbers states, objective risk will decrease as the number of covered lives increases. Losses are relatively more predictable when the number of exposure units increases.

Did savings accrue to states that mandated the enrollment of Medicaid recipients in the managed care plans? (Mod 4.4)

One expects enrollment in managed care Medicaid plans would have generated savings; however studies show it did not save money in states that had lower provider reimbursement rates relative to commercial insurers at baseline. However those states that had relatively more generous payment levels did save money. Study's author noted results were consistent with recent research on managed care among with privately insured - that is, the HMOs and other forms of managed care achieve their savings largely though reduced prices rather than lower quantities. Also, additional savings are expected as more Medicaid programs focus efforts on enrolling their most expensive recipients: elderly and disabled.

What is big attraction of private exchanges for employers? (Mod 1.5)

Opportunity to change from traditional premium contribution model (where ER pays 75-80% of premium) to a defined contribution model. Traditional contribution model escalates the cost to the ER each yr as costs increase. Since exchanges provide a wider array of choices to EEs, the ER can more easily change from the traditional contribution model to a defined contribution model where a flat amount, like a voucher, is provided to EEs who then apply that flat amount to the plan they select. In subsequent years, ER may increase the defined contribution but at a level that is not directly tied to cost trend. Private exchanges can operate with or without defined contributions.

Define each part of Medicare (A,B,C,D) and the services provided under each (Mod 1.4 - Reading)

Part A = Hospital Services Part B = Physician & Diagnostic Services Part C = Medicare Advantage - Alternative Managed Care Option Part D = Prescription Drugs -Greatest choices in Part D and the Medicare Advantage Plan, which is where most of analysis is focused on. -C and D are paid out of pocket by recipients; A & B are funded by payroll deductions (taxes)

Studies of physician markets show results consistent with those discussed earlier for hospital market. Summarize the findings (Mod 4.4)

Physician market results, consistent with earlier examination of hospitals and managed care: -Managed care plans paid lower fees for procedures when there is a greater managed care penetration in metro market. -Managed care plans paid lower fees when there were more physicians per capita in the metro area -HMOs were able to negotiate lower fees than PPOs were, presumably because HMOs had smaller networks of physician providers and were able to use more aggressive selective contracting to obtain lower fees.

How is the calculation of payments accomplished under the risk adjustment program? (Mod 3.4)

Plans' average actuarial risk will be determined based on enrollees' individual risk scores. Plans with lower actuarial risk will make payments to higher risk plans. Payments net to zero.

Do Medicare Part D beneficiaries have many choices and does the evidence suggest they choose the most cost-effective plans? (Mod 1.4)

Provide numerous choices (ex MA has 27 standalone, TX has 32). Most people do not select the optimal plan or take advantage of open enrollment periods to obtain a more cost-effective plan. Few people switch plans even when it would be in their advantage to do so.

Describe the purpose of underwriting using the concept of reliable risk pools (Mod 2.2)

Purpose of UW is to establish a number of risk pools or risk classes, with each pool having expected losses significantly different from the others, a small dispersion of possible outcomes and a large number of covered lives. One might start by establishing differences based on gender and age on the theory that older people have higher claims experience; different classes could be established based on geography, occupation or industry. While differences across these groups may be meaningful, there is also dispersion around each of the expected claims estimates. In addition, some potential risk classes may be too small to provide much assurance that the expected claims and dispersion measures are reliable.

Summarize the overall objectives of risk adjustment, reinsurance and risk corridor provisions that were implemented as part of ACA (Mod 3.4)

Risk adjustment is designed to mitigate any incentives for plans to attract healthier individuals and compensate those that enroll a disproportionately sick population. The object of reinsurance was to compensate plans for their high-cost enrollees and, by nature of its financing, to provide a subsidy for individual market premiums generally over 3 year rate period. Risk corridors reduced the general uncertainty insurers faced in the early years of implementation when the new ACA market opened up to people with pre-ex who were previously excluded.

How is/was government oversight achieved in the 3 provisions of ACA aimed to address concerns over differences in claims experience? (Mod 3.4)

Risk adjustment program: Dept of Health & Human Services (HHS) developed a federally certified risk adjustment methodology to be used by states or by HHS on behalf of states. States electing to use an alternative model must first seek federal approval and must submit yearly reports to HHS. Reinsurance program: States had the option to operate their own reinsurance program or allow HHS to run one for the state. For states that chose to operate their own, no formal approval process, although the state's ability to deviate from HHS guidelines were limited. HHS collected all reinsurance contributions - even for state run programs and all states had to follow a national payment schedule. Risk corridors: Program was federally administered. HHS charged plans with larger than expected gains and made payments to plans with larger than expected losses.

What entities participate or used to participate in the 3 provisions of ACA aimed to address concerns over differences in claims experience? (Mod 3.3)

Risk adjustment program: Participants include nongrandfathered individual and small group market plans, both inside/outside exchange. Reinsurance program: All health insurance issuers and self-insured plans contributed funds; individual market plans subject to new market rules (both inside/outside exchange) were eligible for payment. Risk corridors: Qualified health plans (QHPs), which are plans qualified to be offered on a health insurance marketplace, used to participate

What are/were the objectives of the 3 provisions of ACA aimed to address concerns over differences in claims experience? (Mod 3.3)

Risk adjustment program: Redistributes funds from plans with lower risk enrollees to plans with higher risk enrollees. Goal is to encourage insurers to compete based on the value and efficiency of their plans rather than by attracting healthier enrollees. Reinsurance program: Provided payment to plans that enrolled higher cost individuals. Aim of this temporary program was to reduce the incentive for insurers to charge higher premiums due to the ACA market reforms that guarantee availability of coverage regardless of health. Risk corridors program: Limited losses and gains beyond an allowable range. Aim of this temporary federal program was to cushion insurers participating in exchanges/marketplaces from extreme gains and losses.

Define what is meant by the term risk premium and its relationship to the loading fee (Mod 5.1)

Risk premium represents the maximum amount that individuals are willing to pay to avoid the consequences of uncertain loss. The actual amount that is paid over the expected loss is the loading fee, which includes insurers admin costs, reserves and profits.

Explain what is meant by "risk selection" and the constraints and opportunities for it to be practiced by insurers once the provisions of ACA are implemented (Mod 3.3)

Risk selection occurs when insurers have an incentive to avoid enrolling people who are in worse health and likely to require costly medical care. Although under ACA, insurers are no longer permitted to deny coverage or charge higher premiums on basis of health status, they can attract healthier clients through plan design tools such as restrictive drug formularies and large deductibles.

What insurance approach, started in the 1980s, has been credited for the growth of managed care? (Mod 4.1)

Selective contracting started being employed by insurance carriers and this strategy has been cited as a factor for managed care growth. It gave managed care plans an advantage over other forms of health insurance. Prior to the arrival of managed care, insurers tended to cover a fixed % of the bill for any provider that the insured chose. Managed care plans were able to negotiated lower prices in exchange for certain patient volume.

What does selective contracting entail? (Mod 4.1)

Some providers getting contracts while others are not. With selective contracting, an insurer agrees to pay for only the hospital and physician services provided by a small panel (relative to the market) of hospitals, physicians, therapists, and drugstores. This arrangement introduces price into the decision-making calculation b/c providers are included in a panel based on services, amenities, quality and price. As such, traditional economic concept of competition can lead to prices being pushed down to marginal cost as insurers and providers exchange patient volume for lower costs.

Why is the total premium the ER pays on behalf of the EE not used by analysts to examine the impact of insurance premiums on the choice of health insurance plan? (Mod 5.1)

The total premium an ER pays is relevant premium from the insurer's point of view and it should also be the relevant price for EEs, since they trade lower wage or reductions in other benefits for ER sponsored health. However, analysts typically argue that b/c ERs tend to split the premium into the ERs share - paid for with largely unseen wage and benefit reductions - and the EE's share - paid for by explicit out of pocket premiums - the out of pocket price is what affects the EE's decision during the open enrollment period. Since EEs nominal wages do not immediately changes as a result of their insurance decision, that is not an unreasonable approach.

What was the objective of the influential RAND Health Insurance Experiment study? (Mod 3.1)

To examine the effects of insurance copayment arrangements on expenditures with the hope of improving the AAPCC model used by Medicare. The study randomly assigned people from 6 sites across the country into different health plans and monitored their use of health services over the 4-5yrs of the experiment in the 1970s. Study also recorded demographic and health status characteristics of participants at baseline. Much of the current knowledge about the measurement of health status has its genesis within this study. Thus, it has been used to examine alternative predictive models of utilization based on demographics, subjective/physiological measures of health status and prior utilization.

Do users of ACA marketplace exchanges have many choices and does evidence indicate they choose the most cost-effective plans? (Mod 1.3)

Ton of choices and options (ex: in TX, 15 carriers offered an average of 31 plans per county). A consumer comparing plans may see different premiums, coinsurance and deductibles, but plans also may differ on every measure of out of pocket costs including physician copays, ER payments, hospital stay payments. Studies have found despite wide range of benefits, people are not choosing most cost-effective plans....people on average choose plan 10% more expensive than what would be optimal. Other studies suggest limiting variation in plan designs would be choices more comprehensible (able to understand).

Describe two basic types of experience rating (Mod 2.3)

Two generic forms: prospective and retrospective. Prospective (FI): involves the use of an employer's previous data to develop a rate for the future. An ER's current premium is based on prior loss experience. Past experience is used to develop a future premium. Retrospective (ASO): also examines an ER's experience to determine a premium for ER but, current experience is used to calculate current premium. Insurer has a firm open a checking account which they write checks to pay claims of the firm's EEs and their dependents. Insurer charges firm a fee to administer the plan and adjudicate claims. At end of year, settle accounts. Typically firm makes a retro payment at end of year to reconcile payments with actual claim experience. If prefund amount is insufficient, firm is responsible for claim dollars.

Once the individual's risk scores are calculated, how is a plan's average risk score determined? (Mod 3.4)

Values are averaged across the plan to arrive at the plan's average risk score. This is a weighed average of all enrollees' individual risk scores and they represent the plan's predicted expenses (based on demographics of those enrolled). Under HHS Methodology, adjustments are made for a variety of factors, including actuarial value (extent of patient cost sharing in the plan), allowable rating variation and geographic cost variation. Under risk adjustment, plans with a relatively low average risk score will make payments into the system while plans with higher than average scores will receive payments.

How did enactment of ERISA in 1974 impact retrospective experience-rated health plans? (Mod 2.4)

When ERISA was enacted, legislation allowed plans that were self-insured under the terms of the legislation to be exempt from state insurance regulation. Although many retrospective experience rated health plans were substantively self-insured, employers had to switch to being truly self-insured to avoid premium taxes and other regulations states could impose.

Do Employees using out of network care experience minor or major variance in expenses relative to when they access in-network benefits? (Mod 5.3)

While in-network care accounts for about 90% of covered expenses, individuals who access out of network care can face hefty expenses, depending on methods used by insurers to calculate out of network benefits.

Describe the development of the Medicare payment methodology known as (AAPCC) Adjusted Average Per Capita Cost to reimburse Medicare Advantage (MA) plans (Mod 3.1)

(Note: Medicare advantage plans are types of Medicare health plans offered by private companies (HMOs) that contract with Medicare to provide beneficiaries with all their Medicare Part A and B Benefits. All Plans, except for private fee for service plans, must also offer an option that includes Medicare D drug benefits) Medicare started by essentially paying participating HMOs a fixed dollar amount for each beneficiary who chose to join the plan. Because HMOs were thought to be more efficient that traditional care providers, legislation prescribed that the capitated rate should be 95% of the average Medicare Part A (hospital) plus Part B (ambulatory) expenditures per beneficiary, adjusted by various favors including age, gender, and Medicaid status. -This is analogous to a simple manual rating system; system appears to have provided the private plans (HMOs) with substantial incentives for enrolling people with lower than average expected claims and avoiding people with above average claims.

Employee health benefit plans that are built on value based accountable care organizations (ACOs/eACOs). Describe the six essential elements of eACOs. (Mod 1.7)

-Commitment by Employer to built a robust and sustained culture of health that focuses on well-being/productivity of EE's through workplace food options, vending mach, ergonomics, etc -Health and pharmacy benefit plan design that encourages use of high-value care, provides incentives for using high-performance integrated networks and encourages smart decisions at point of care/conserving $ -Powerful data management and measurement; connects chronically ill/complex patients with a physician led team which develops evidence based care plans; provide experts w/the ability to analyze data in order to determine drivers of cost, effectiveness, ROI, inform change -High performance network of health system facilities and providers paid through value based care, including PCPs/specialists, etc -Integrated clinical prescription drug management model (low net cost purchasing power, aligned formularies) -Well-designed/well-managed health promotion/workplace wellness that aligns incentives for engaging in health assessments, screenings, etc. When care is needed, drive right care, right time, right place, right price/outcome

What is an administrative services only (ASO) contract? (Mod 2.4)

ASO contract is used when an ER wants to have a self-insured plan and bear the UW risk itself but wants to transfer the burden of administrative services to an insurer or TPA.

According to RAND Health Insurance Experiment, which of the following measures has the greatest explanatory power relative to others?

1: Demographics (Age/Gender/Location) 2: Subjective health status measures (Physical/Mental/General Health, Disease) 3: Physiological health status measures (Dichotomous or Continuous measures - cholesterol, diabetes, etc) 4: Prior utilization (Outpatient/Inpatient expense) -RAND Study found when prior utilization (#3) was added to AAPCC demographic variables (#1), this approach explained 6.4% of expenditures, 2.8% of inpatient claims and 21.2% of outpatient expenditures. -Relative to other approaches, prior utilization has substantially greater explanatory power; result probably explains reason health insurers tend to focus on prior claims experience when setting insurance premiums.

Besides role of price in decision making calculation, what are some other effects of selective contracting that have been postulated and researched? (Mod 4.2)

1: Some speculated selective contracting would lead to an expansion of the geographical hospital market but research has not found evidence that travel distances increased either on average or w/respect to inpatient procedures 2: An argument can be made that managed care should slow the proliferation of services. However, the effect on service offerings is conceptually ambiguous. On one hands, economies of scale suggest if hospitals specialized in particular service niches, they could achieve cost economies and garner managed care contracts with lower prices. On other hands, if economies of scope predominate, a hospital may have lower costs in one product line because it also has other products. Increased managed care penetration may be reducing the availability of high-tech services but few studies do not agree and there is little evidence on effects of new tech. 3: Another possible effect is that selective contracting may result in nonprofit hospitals providing less charity care. These hospitals may use profits to do good works (such as providing care to poor); lower prices result in lower profit and less charity care. Research is mixed - one study showed for-profit hospitals had reduced share of privately insured patients and increased share of services related to Medicare/caid since these cases have been more profitable.

Briefly describe the Cadillac Tax in ACA (Mod 1.5)

40% non-deductible excise tax (paid by ER) that will be levied on value of all affected health care programs a participant elects that exceed certain dollar thresholds in 2020 and beyond (extended from 2018 date); while minimum coverage is the floor, Cadillac tax is considered ceiling or top value of health benefits. ER's need to manage between floor and ceiling; roughly half of large US Employers will begin to hit the threshold in 2020 and percent is expected to rise in subsequent years.

What have researchers found with regard to consumer benefits and efficiency of Medicare Part C? (Mod 1.4)

45 studies - in general that Part C's HMO and PPO programs have a better record than traditional fee for service plans in the provision of preventive services and the more efficient use of resources. Despite high performance, a sub-group of sick beneficiaries in traditional Medicare tends to rate their care more favorably than beneficiaries in Part C - due to easier access to specialists. Compared to Part D (which provides a separate, uncoordinated prescription drug benefit), choice here is less complex and could lead to greater consumer benefits and efficiency.

What is included in the loading percentage? (Mod 2.1)

A mark-up the insurer charges to cover its objective risk, profit and costs of marketing, adjudicating & processing claims, coordinating benefits and providing access to its network. In other words, all costs, other than losses and loss adjustment expenses, are including in loading percentage. Costs are reduced by any investment earnings when premiums are calculated.

What is a private exchange for health benefits? (Mod 1.5)

Built and administered by benefit consulting and admin firms as well as carriers/firms that specialize in private exchange admin. These marketplaces of health insurance/related products allow EEs to pick from a pre-selected variety of plans offered by 1 or more insurance companies. ERs who utilize private exchanges will remain plan sponsors - the exchange will manage communication, enrollment, pricing, compliance, etc...Insurance carriers and PBMs pay claims, issue insurance contracts and perform traditional duties still.

How did ACA change Medicare? (Mod 1.2)

ACA expanded Medicare's wellness and prevention benefits, improved prescription drug coverage and financed experiments to control health care costs by testing alternative payment methods and delivery systems.

Explain how the principle described in combining groups with different claims experience has particular relevance to ACA (Mod 2.6)

ACA prohibits medical UW and the use of gender in setting insurance premiums. Therefore, unhealthy individuals (high risk) will experience lower premiums and more coverage than health individuals.

What stipulation does ACA make regarding the relationship in health insurance premium between an aged insured and a younger insured? (Mod 2.6)

ACA requires premiums for oldest insured to be no more than 3X that of youngest insured.

What does ACA require in terms of the medical loss ratio for small groups up to 100 EE's and nongroup plans, and what is the mandate for fully insured large groups? (Mod 2.1)

ACA requires the medical loss ratio for small groups up to 100 EE's and for nongroup plans to be no less than 80%. For fully insured large groups, medical loss ratio can be no less than 85%. If an insurer has a medical loss ratio below this threshold, it is required to refund a share of its premium back to purchasers. ACA requirement does not apply to plans where the ER is responsible for the payment of covered plans, that is, self-funded plans.

How did ACA change eligibility for Medicaid benefits and how is this change affecting the number of people who are enrolled? (Mod 1.2)

ACA shifted program eligibility from category based (ex: single parents with dependents or people w/disabilities) to an income-based standard. Medicaid once covered fewer than half of low-income Americans, but now ACA Medcaid expansion has been steadily increasing enrollment, with largest increase in the states who are participating.

Explain significance of US Supreme Court case National Federation of Independent Business v Sebelius in 2012 (Mod 1.2)

ACA sought to expand Medicaid coverage to all individuals and families with incomes below 138% of the poverty level. US (first time) would have had a solid safety net of insurance coverage for all lower income citizens. In the case, the court rules states could choose not to expand (and Medicaid funding would not be withheld). By Jan 2015, 25 states chose not to expand.

What three factors are typically used to predict the individual use of health services? (Mod 3.1)

Although not equally effective, 3 factors typically used to predict use of health services are individual's: -demographic characteristics (perform poorly) -health status (in middle) -prior utilization (best predictor)

How did Balance Budget Act of 1997 (BBA) change the risk adjustment methodology on which the AAPCC payment was based? (Mod 3.2)

BBA required Medicare to phase in a new risk adjustment methodology to better incorporate health status into their capitation (the payment of a fee or grant to a doctor, school, or other person or body providing services to a number of people, such that the amount paid is determined by the number of patients, students, or customers) rates and to reimburse Medicare Advantage Plans higher amounts for "sicker" beneficiaries. In addition, because a risk adjusted payment system is based on patient health status measures, BBA requires Medicare HMOs and other providers to supply encounter data to the Centers for Medicare & Medicaid Services (CMS). Data is used to prospectively estimate predicted costs for Medicare Advantage Beneficiaries. These estimates are used to adjust the Medicare capitation payment and the model is known as CMS Hierarchical Condition Categories (CMS-HCC); the model assigns diagnoses to hierarchical medical condition categories.

What is the methodology used by HHS under its risk adjustment program to determine individual risk scores? (Mod 3.4)

Based on each individual's age, gender and diagnoses, individual risk scores are assigned to each enrollee. Diagnoses are grouped into an HCC and assigned a numeric value that represents the relative expenditures a plan is likely to incur for an enrollee with a given category of medical diagnosis. If an enrollee has unrelated diagnoses such as prostate cancer and arthritis, both HCC values are used in calculating individual risk score. If an adult enrollee has combinations of illnesses such as a severe illness and an opportunistic infection, an interaction factor is added to their score. Finally, if the enrollee is receiving subsidies to reduce cost sharing, an induced utilization factor would be applied to account for induced demand.

Explain the process by which Medicare Advantage Plans bid to partially determine the Medicare payments they receive (Mod 3.2)

Beginning in 2006, MA plans have to bid to offer Parts A and B coverage (D separate) to Medicare beneficiaries. The bid proffered is the bid to cover an average beneficiary - it includes the plan admin cost and profit. If bid is below the CMS established benchmark, the managed care plan keeps a portion of the difference to apply to reduced cost sharing or expanded benefits for enrolled beneficiaries. If the bid is above the benchmark, the plan charges enrollees an additional premium. However the CMS-HCC model is used in all cases to adjust the payment for beneficiaries enrolled by the plan to reflect their demographics and health status. ACA made changes to how benchmarks are determined and it lowered the share that the plan keeps when its bid is below the benchmark; it also made the share percentage a function of the plans quality rating.

What are the basic differences between the four medal categories of ACA health plans? (Mod 1.3)

Bronze, Silver, Gold and Platinum plans all have same actuarial value. However, they differ in regard to amount of deductibles, coinsurance, other out of pocket costs and premiums. Bronze plan has lowest premium but most out of pocket costs. Platinum plan has lowest out of pocket cost, but highest premium.

Why is the Silver Plan the most popular choice among ACA plans? (Mod 1.3)

Majority who enroll are eligible for federal tax credit subsidies tied to a Silver level plan. People may still select a higher cost Gold or Platinum plan, but will have to pay higher premiums. Cost-sharing subsidies to lower out of pocket costs are only available to Silver plans.

What is a credibility factor? How is it used in experience rating? (Mod 2.3)

Credibility refers to the extent which an insurer can rely upon the loss data of an employer when experience rating. The loss data of a small ER for only a short period of time is not credible or as reliable as data from larger ER over a long period of time. All insurers that use experience rating develop their own credibility factors to calculate the degree to which they can rely upon an ERs loss data. Insurers place more confidence in estimated losses with higher credibility factors. Extremely large ERs might be 100% credible (only loss data, no manual to determine premium). Most ERs have lower credibility factors, which means their loss data is blended with that of the experience of the insurers overall book of business and their loss data is used partially to determine premium.

What is a manual rating? (Mod 2.3)

Manual rating is a system in which insurers place insureds in groups according to their loss-producing characteristics. In the individual market, factors as age, gender, location, occupation and health status may be used to classify. In the group market, the mix of EEs and Dependents with those characteristics may be used, as well as firm specific factors. Manual Rating derived from days before computers; had to use rate manuals and compute by hand.

What are economic benefits of a free market? (Mod 1.1)

If an individual does not like their provider or health plan, the should be able to "vote with their feet" and select other options. This choice empowers customers, regulates producers and drives efficiency.

For a medical group, what are disadvantages of a capitation payment arrangement? (Mod 4.3)

If medical group accepts capitated contract, it essentially becomes an insurance company bearing risk. Objective risk depends on expected loss, the variance and # of covered lives. A medical practice may have 6500 patients and even if all are members in same managed care plan, this is a small risk pool and represents substantial objective risk. If only 20% of patients are in managed care plan, risk is greater. Thus, practices have become more aware of risk associated with capitated contracts and some have tried to move away.

Define the term "medical arms race" (Mod 4.1)

In the golden era of pre-managed care, as hospitals competed with neighboring hospitals, they spent more on technology and amenities, driving up prices. Outcome of escalating expenditures has been referred to as medical arms race.

What is reference pricing? (Mod 4.4)

Insurer negotiates prices with providers but then sets a maximum on how much it will pay for each procedure. If subscribers use a provider with prices at or below reference price, they either pay nothing or do some modest cost sharing. If they choose a higher priced provider, they have to pay cost sharing plus full amount above reference price. Subscribers given incentive to use lower cost but quality providers.

How is data collected and consumer privacy protected under the risk adjustment program? (Mod 3.4)

Insurers are responsible for providing HHS with deidentified data, including enrollees' individual risk scores. States are not required to use this model of data collection but are required to only collect information reasonably necessary to operate the risk adjustment program and are prohibited from collecting personally identifiable information.

Indicate the approximate percentages of the population covered by major health programs. (Mod 1.2)

Largest portion of Americans (48%) receive health insurance through an Employer, 16% through Medicaid, 15% through Medicare, 6% purchase insurance on their own

Is there a relationship between the effect of higher monthly out of pocket premium on health plan selection and the health plan's market share of the employer book of business? (Mod 5.2)

The size of the effect of higher monthly out of pock premiums is also dependent on: -initial enrollment share of the plan raising price -share the plan has of overall enrollment of similar plans

Research has demonstrated 2 distinguishing characteristics of managed care: lower utilization experience and lower prices as a result of favorable selection and selective contracting. Discuss importance of knowing which of these effects dominates and by how much. (Favorable Selection = describe managed care plans attracting a disproportionate # of healthy enrollees) (Mod 4.2)

When there are differences in health care expenditures per enrollee between managed care plans and indemnity plans, it is important to know which of the effects, favorable selection or selective contracting, dominates and by how much. If difference is almost entirely attributable to favorable selection, there is little reason to recommend managed care to an ER as an alternative to traditional Medicare/Medicaid plan. On other hand, if difference is largely attributable to selective contracting, good reason to recommend managed care b/c selective contracting implies managed care plans are able to provide services at lower cost. Findings of 1 study indicated that 51% of difference in expenditures was attributed to favorable section in HMO, about 45% to lower prices and rest to lower treatment intensity. Thus managed care plans can provide actual cost savings bc of their ability to selectively contract with providers.

Describe private health insurance coverage with regard to a) size of firm b) HDHPs with Medical Savings Accounts c) variability of coverage by states (Mod 1.2)

a) 98% of employers with 200+ EE's offer health insurance but fewer than 45% of firms with 3-9 EE's do so. Larger employers offer more choice of health plans than smaller employers; small employers tend to offer POS plans that require higher EE cost sharing to go outside network. b) In 2006, HDHPs with medical savings accounts accounted for 4% of ER-sponsored market, but by 2012, accounted for over 20%. In 2016, this rose to almost 30%. c) Range of ER-based options and quality of options available vary widely by state. The percentage of the population covered by private insurance varies as well as the options for different types of coverage.