Question

1. List and discuss the three payment-determination bases.
2. Explain the difference between a specific services payment unit compared to a bundled services payment unit.
3. What are the three major ways that health care providers can control their revenue function?
4. What are the three factors that influence pricing?
5. Why does market share matter to a health care provider?
6. What contract provision will best protect a hospital being paid on a DRG basis for inpatient services from a catastrophic patient?
7. Why should providers seek whenever possible to minimize health plan rate differentials?
8. What can a health care provider vary across different payers?
9. What is the best way to compare hospital costs?
10. What measure(s) is used directly as one of the means of determining the reasonableness of a hospital’s charges?
11. What are the four major activities of a health plan?
12. Explain coordination of benefits.
13. What does a high deductible health plan with a savings option include?
14. What is a withhold feature for payment to health care providers?
15. What promotes the growth of Integrated Delivery Systems?
16. Why are capitation plans more common for physician payments?
17. The James Clinic is an organization of 100 physicians in a variety of specialties. They recently contracted with Prudential Health Plan on a capitated basis to provide all medical services to Prudential's members for the next three years. What would this HMO model be defined as?
18. What provision would a medical group include in its contract with an HMO to receive larger PMPM payments if the HMO members are chronically ill?
19. You are trying to establish a PMPM rate for Primary Care Physicians. Actuarial estimates project 2,500 visits per 1,000 members per year. You have contracted with a Primary Care Medical group at $45.00 per visit with a $5.00 copayment that you will receive. What PMPM rate should you set?
20. An HMO has a Point of Service (POS) option for its members, but will pay only 80% of approved charges. If a member goes out of network for a medical procedure with a charge of $2,000, of which $1,200 is approved, how much must the member pay?
21. A hospital has contracted with an HMO to provide acute care inpatient services for $1,000 per day, subject to a 10% withhold. The proposed budget for inpatient services is based upon expected utilization of 600 days per 1,000 members at $1,000 per day, or $600,000 per 1,000 members. The hospital risk pool will be split equally between the hospital and a primary care physician group. If only 450 days per 1,000 members were utilized in the first year, how much would the hospital be paid per 1,000 members?
22. A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If costs are expected to average $120 per day, what is the maximum utilization of days per 1,000 members that the nursing home can experience before it begins to lose money?

Answer 1

ANS 1. COST METHOD: IN THIS METHOD, THE STARTING POINT IS TAKEN AS THE PROVIDER'S COST THAT IS USED TO DETERMINE THE AMOUNT TO BE PAID.

PRICE RELATED METHOD: THE PROVIDER IS PAID THAT RATE WHICH BASED ON THE RELATION OF ITS TOTAL COST FOR WHICH IT RENDERED THE SERVICES TO THE PATIENTS.

FEE SCHEDULE METHOD: IN THIS METHOD, THE COST IS UNRELATED TO PROVIDER'S COST AND PREDETERMINED.

ANS 2. SPECIFIC SERVICES PAYMENT - IN THIS, THE SERVICES WHICH ARE PROVIDED TO INDIVIDUAL ARE NOT AGGREGATED. EXAMPLE CAN BE THE DISCOUNTED BILL FOR OUTPATIENTS SERVICES.

BUNDLED SERVICES- IN THIS, THE SERVICES ARE AGGREGATED THAT ARE PROVIDED TO THE PATIENT IN ONE UNIT OF PAYMENT. EXAMPLE WHEN PATIENT PAYS ON PER DAY BASIS.

ANS 3. THE THREE WAYS CAN BE :

• CONTRACT NEGOTIATING
• SETTING YOUR PRICE
• BILING MNAGEMENT.

ANS 4. THREE FACTORS AFFECTING PRICES ARE:

1. DEMAND: WHEN DEMAND IS LESS PRICES ARE DECREASED WHEREAS WHEN THERE IS MORE DEMAND PRICES ARE INCREASED.
2. COMPETITION: COMPETITOR'S PRICES AFFECTS THE PRICES OF THE FIRM. IF THE COMPETITOR'S PRICES ARE LOWER THEN THE FIRM ALSO HAS TO REDUCE THE PRICE TO ATTRACT CUSTOMERS.
3. COSTS: WHEN THERE ARE MORE COSTS INCURRED IN THE MANUFACTURING OF A PRODUCT OR PROVIDING A SERVICE THEN THE PRICES ARE ALSO HIGH BECAUSE THE FIRM HAS TO COVER UP THE COSTS. ON THE OTHER HAND IF THE COSTS ARE LESS, THEN THE PRICES ARE ALSO LESS.