Hcr230_Week_1_Assignment-_Features_of_Private_Payer_and_Cdhp

GRADE: A+ HCR/230 Assignment: Features of Private Payer and CDHP PPO: Preferred provider organizations (PPOs) are the most popular type of private plan, followed by health maintenance organizations (HMOs), especially the point-of-service (POS) variety. In addition, Consumer-driven health plans (CDHP) that combine a high-deductible health plan with a funding option of some type are rapidly growing in popularity among both employers and employees Furthermore, few employees choose indemnity plans because they would have to pay more. (Valerius, Bayes, Newby, & Seggern, 2008). PPO stands for preferred provider organization and is a managed care organization of medical doctors, hospitals, and other health care providers who have a binding agreement with an insurer or a third-party administrator, which usually pay participating providers based on a discount from their physician fee schedules, called discounted fee-for-service (Valerius et al, 2008). Providers in the PPO will provide the insured members of the group a substantial discount below their regularly-charged rates. This arrangement helps ensure that the insurer will be billed at a reduced rate when its insured utilize the services of the preferred provider. Additionally, those who have PPOs have more flexibility to choose a primary care doctor of their own choice, as well as being able to go to a specialist without first having to get a referral from their primary care physician. PPO members also may be fully or partially reimbursed if they use a doctor that is not listed in the PPO 'network. HMO: Health Maintenance Organization (HMO) is licensed by the state, which has lower costs, but the HMO has the most strict guidelines and a limited choice of providers. Furthermore, members are assigned to primary care physicians and must use network providers to be covered, except in emergencies, which also uses an expanded network that had contracted work with the HMO, which may consist of medical specialists, dentists, psychotherapists, physical therapists, nutritionists, educators, and pharmacies and hospitals. HMOs were originally designed to cover all basic services for an annual premium and visit copayments, which were called first-dollar coverage, as no deductible was required and patients didnot make out-of-pocket payments (Valerius et al, 2008). GROUP HMO: A group HMO network have contracts with more than one physician group, which some plans, the members can receive medical services in their own facilities from providers who work only for that HMO. In others plans, members visit the providers’ facilities, and the providers can also treat nonmember patients. Moreover, the practices under contract are paid a per member per month for each subscriber assigned to primary care services (Valerius et al, 2008). However, over the years and because of expenses, HMOs may apply deductibles to family coverage and employer-sponsored HMOs, which also are replacing copayments with coinsurance for some benefits. IPA: An IPA is an Independent Practice Association of medical doctors, such as primary care physicians and specialists and other health care professionals that have contracted with most insurance plans, as these doctors practice independently and usually see nonmember patients as well. In addition, physicians contract together to provide care for members, which pays negotiated fees for medical services to the IPA, which also, providers may join more than one IPA (Valerius et al, 2008). Also, the IPA in turn pays its physician members by a participation fee. POS: A POS Insurance Plan is an insurance plan that allows the insured person to choose providers or specialists with the POS plan's network s referred by their primary care physician but the member can also refer themselves to a provider outside the network. POS members may choose from a primary or secondary network. Furthermore, if a doctor refers a patient out of the network, usually the plan pays all or most of the bill. If a POS member refers themselves to doctors or specialists outside the network, they will have to pay a predetermined amount of coinsurance. The POS health insurance seems to give their members more freedom but at a higher cost, as POS plans charge an annual premium and a copayment for office visits ( Valerius et al, 2008). INDEMNITY: Indemnity plans also known as fee-for-service plan give members maximum choice regarding their health care as they can choose without restrictions but the member pays for services out of their own pockets and then is reimbursed by the insurance carrier. In addition, indemnity plans require premium, deductible, and coinsurance payments and typically out-of pocket expenses must be paid for covered benefits begin. Many members have some managed care features, as payers compete for employers’ contracts and try to control costs ( Valerius et al, 2008). CDHP: Consumer-driven health plans (CDHP) combine two components, which is a high-deductible health plan and one or more tax preferred savings accounts that the consumer directs, as the two plans work together (Valerius et al, 2008). The significance of a high-deductible health plan is that it covers catastrophic losses, while the savings account pays out-of-pocket, non-covered or medical expenses. Therefore,consumers will be less inclined to use money for minor medical issues and make informed choices, which will help keep cost down. For the CDHP approach to work, then, consumers must be able to find accurate health care information for common medical conditions and treatments. However, with a high-deductible plan if you don't use it for minor medical issues and its a major medical issue, then it becomes more expensive and therefore could be come a liability. HEALTH REIMBURSEMENT ACCOUNT: Health reimbursement accounts (HRAs) are plans that reimburses employees for qualified medical expenses, which are usually funded by the employer. Health reimbursement accounts reimburses you for qualified medical expenses up to an account balance. HRAs are usually offered to employees with health plans that have high deductibles. Employees may submit claims to the HRA to be paid back for out-of-pocket medical expenses ( Valerius et al, 2008). Furthermore, qualified expenses can include deductibles, co-payments, coinsurance and prescription drug expenses (U.S. Department of Treasury, 2011). The amount your employer contributes to the health reimbursement account depends on the employer, as the employer sets the contribution schedule, which determines how much will be available to you at any given time. However, if you do not spend all of the funds in your HRA,the amount left over in your health reimbursement account will rollover from as long as your employer offers the program and you remain enrolled. FLEXIBLE SPENDING ACCOUNT: Flexible Spending Accounts (FSA) are accounts that can be used to pay off medical expenses not covered by health insurance. FSAs allow members to use pre-tax dollars for certain eligible medical and dependent care expenses. Members fund their FSAs with contributions that come out of their paycheck (Regence, 2011). For example, the insurance company only pays 90% of the costs, then the other 10% could be paid-for using this flexible spending account. The benefit of having this type of account is that the money is taken out of your work paycheck so the amount of federal and state income taxes you pay will be less if you have to pay taxes. FSAs have many rules and regulations that need to be followed in order to participate. Furthermore, the employer and employee will meet once a year, usually on January 1st when the plan begins, and decide just how much money is going to be contributed throughout the entire year (Regence, 2011). References: Regence (2011) Healthcare Coverage: Flexible Spending Accounts. Blue Cross Blue Shield Association. Retrieved from http://www.regence.com/OR/products/medical/index.jsp. U.S. Department of Treasury. (May 16, 2011). HSA - Health Savings Accounts. Retrieved from http://www.treasury.gov/resource-center/tax-policy/Pages/Health-Savings-Accounts.aspx Valerius, J., Bayes, N., Newby, C., & Seggern, J. (2008). Medical insurance: An integrated claims process approach (3rd ed.). Boston: McGraw-Hill.