Which of the following statements regarding persons participating in an HMO is CORRECT?
A) They negotiate health care service fees with contracted HMO providers.
B) They pay for health care services as they are incurred, at a rate discounted for the HMO.
C) They pay for health care services as they are incurred.
D) They pay a fixed periodic fee whether or not health care services are used. They pay a fixed periodic
fee whether or not health care services are used. Explanation
Persons participating in an HMO pay a fixed periodic fee in advance for services performed by participating physicians and hospitals. This fee is payable, whether or not the participant uses any health care services. Which of the following statements about preferred provider organizations (PPOs) is NOT correct?
A) A PPO is a group of health care providers, such as doctors,
hospitals, and ambulatory health care organizations, that contracts with a group to provide their services.
B) Employers, insurance companies, and other health insurance benefit providers are typical groups that contract with PPOs.
C) PPO members select from among preferred providers for needed services.
D) PPOs operate on a prepaid basis. PPOs operate on a prepaid basis. Explanation
Unlike HMOs, PPOs usually operate on a fee-for-service
basis, not on a prepaid basis. All of the following are alternatives to hospital care EXCEPT
A) skilled nursing
B) home health care
C) assisted living care
D) intermediate nursing assisted living care Explanation
Facilities other than hospitals may provide more cost-effective treatment and care for patients. However, the care must be under the supervision of a doctor and based on a
prescribed level of care. Assisted living is not considered a form of medical care but is designed to assist an individual in maintaining a level of independence in performing activities of daily living. All of the following groups may contract with PPOs EXCEPT
A) insurance companies
B) government programs
C) health insurance benefit providers
D) employers government programs Explanation
Employers,
insurers, and health benefit providers are typical groups that contract with PPOs. Although these groups do not mandate that individual members must use the PPO, benefits are reduced if members do not. For instance, members may pay a $100 deductible if they use PPO services and a $500 deductible if they go outside the PPO for health care services. All of the following are features of HMOs EXCEPT
A) gatekeepers
B) extensive choice of
providers
C) prepaid services
D) co-pays extensive choice of providers Explanation
One feature of HMOs is a limited choice of providers. Subscribers must choose a physician or provider that is under contract with the HMO. A limitation for new subscribers is if their current physician does not contract with the HMO, then the subscriber must choose a new doctor from a listing of those providers who are under contract.
Traditional indemnity plans are characterized by all of the following EXCEPT
A) The ability to access care from a specialist only with a referral from a primary care physician
B) Billing and submission of claim forms for reimbursement
C) The inclusion of a deductible and coinsurance requirement
D) Provision of care on a fee-for-service basis The ability to access care from a specialist only with a referral from a
primary care physician Explanation
Traditional indemnity plans provide access to any willing health care provider. Commercial insurance indemnity plans are structured on a fee-for-service basis with no requirement that a primary care physician manage care for the insured. Health maintenance organizations are known for stressing the provision of
A) preventive care
B) health care and services in hospital settings
C) health care
and services to government employees
D) health care and services on a fee-for-service basis preventive care Explanation
HMOs stress preventive care to reduce the number of unnecessary hospital admissions and duplication of services. What is another name for services provided to insureds at their residences?
A) Adult day care
B) Home health care
C) Acute care
D) Long-term
care Home health care Explanation
Home health care refers to services provided by a licensed home health agency to an insured in her place of residence. These services must be prescribed by the person's attending physician as part of a written plan of care. Disability insurers must make benefits for home health care available under group insurance policies. A point-of-service (POS) plan is most like a
health maintenance organization (HMO) in which of the following ways?
A) Both feature providers who are employees of the plan itself.
B) Both allow subscribers to use outside providers.
C) Both are generally nonprofit organizations.
D) Both use a primary care physician. Both use a primary care physician. Explanation
POS plans and HMOs both use primary care physicians as gatekeepers to provide cost control. Members of an HMO can generally
not use health care providers outside the organization. An HMO has employees, while a POS generally contracts with independent providers. HMOs are generally nonprofit, while POS plans are for-profit. Which of the following organizations contracts with select doctors and hospitals to be a health care provider for its members?
A) HMO
B) MIB
C) DPO
D) PPO HMO Explanation
A health
maintenance organization (HMO) contracts with select doctors and hospitals to be a health care provider for its members. Enrollees in the HMO receive services for a fixed premium paid in advance. All of the following are considered to be viable medical plan cost-saving options EXCEPT
A) specialized birthing centers
B) hospice care
C) skilled nursing facilities
D) emergency room preadmission testing emergency
room preadmission testing Explanation
Emergency care must be provided when needed, so many plans waive the deductible and coinsurance. Preadmission testing would be impractical. The other 3 choices are proven cost reducers. Which of the following is the best reason why a medical plan would require a concurrent review for hospital patients?
A) The doctor and the patient consult on discharge times.
B) The insurance company and the
health care providers make decisions jointly.
C) The patient is discharged in the shortest possible time.
D) Quality care is ensured at the most reasonable expense. Quality care is ensured at the most reasonable expense. Explanation
Concurrent review is a medical decision attempting to ensure that the hospital stay is as short as possible, yet still appropriate for the patient's medical condition. Providers may consult with other providers to
discuss alternatives, such as home health care or hospice care. Which of the following is a goal of managed care plans?
A) To provide low-cost health care to people who could not ordinarily afford health insurance
B) To protect insureds from insolvency of health insurers
C) To fight fraud in the insurance business
D) To apply financial incentives that reduce the quantity and cost of services To
apply financial incentives that reduce the quantity and cost of services Explanation
Managed care plans, such as HMOs, PPOs, and POS plans, offer comprehensive medical services to their members. They also apply financial incentives that encourage providers to keep both the quantity and cost of services in check and motivate members to select cost-effective providers. Which of the following statements concerning HMOs is CORRECT?
A) HMOs
are generally owned by life insurance companies.
B) HMOs place special emphasis on preventive health care.
C) Participants pay a onetime, fixed fee in advance for health care services.
D) HMOs primarily provide emergency medical treatment for their members. HMOs place special emphasis on preventive health care. Explanation
HMOs place special emphasis on preventive health care. Subscribers pay a fixed, periodic fee for the broad range of
health care services provided. All of the following home health care services will be covered by group plans EXCEPT
A) physical therapy
B) nutritional consultation
C) occupational therapy
D) emergency surgery emergency surgery Explanation
Group medical benefits contracts must cover home care services. Home care services are services provided in a patient's residence, not in a hospital or
skilled nursing or rehabilitation facility. These services must be approved by a physician. They include the following: nursing and physical therapy, occupational therapy, speech therapy, medical social work, nutritional consultation, services of a home health aide, and use of durable medical equipment and supplies. Which of the following statements pertaining to health maintenance organizations (HMOs) is CORRECT?
A) If a person joins an HMO
and undergoes a physical examination, she will be billed for the exam and each subsequent medical service as it is performed.
B) An HMO offers comprehensive services on a prepaid basis to its subscribing members.
C) HMOs are funded by the federal government, and eligibility is determined by the income levels of the participants.
D) Any insurance company that markets group health insurance is an HMO. An HMO offers comprehensive services on a
prepaid basis to its subscribing members. Explanation
An insurance company may sponsor an HMO or assist an HMO by providing contractual services. Many HMOs are independent. HMO members pay fixed periodic fees whether or not they use the HMO services; they are not subsequently charged for medical services performed. The most costly type of medical care is
A) outpatient benefits
B) inpatient hospitalization
C) home health care
D) prescription drug costs inpatient hospitalization Explanation
Inpatient hospital care is the most costly type of medical care. Which of the following statements about health maintenance organizations (HMOs) is NOT correct?
A) HMOs stress preventive health care.
B) Federal law requires employers with 5 or more employees to implement an HMO plan for health care coverage.
C) HMOs must
provide comprehensive health care benefits.
D) Routine physicals and diagnostic services are covered expenses. Federal law requires employers with 5 or more employees to implement an HMO plan for health care coverage. Explanation
An HMO offers health care services to its subscribers and emphasizes preventive health care by providing full benefits for routine physical check-ups, immunizations, and the like. Full hospital and outpatient care for
sickness and injury is also provided, although the subscriber is limited to the HMO's physicians and hospitals. Federal law requires employers with 25 or more employees that provide health care benefits for their workers to offer enrollment in an HMO as an alternative to traditional forms of insurance. A formal technique designed to evaluate the clinical necessity, appropriateness, or efficiency of health care services, procedures, or settings
is known as
A) retrospective review
B) adverse selection
C) external review
D) utilization review utilization review Explanation
Utilization review is a set of techniques designed to evaluate the clinical necessity of health care services. Techniques include ambulatory review, prospective review, second opinion, certification, concurrent review, case management, discharge planning, and retrospective review.
All of the following are types of utilization management EXCEPT
A) concurrent review
B) prospective review
C) preauthorization review
D) retrospective review preauthorization review Explanation
Utilization management places oversight on medical care to make sure it is appropriate and effective. Those reviews can be prospective, concurrent, and retrospective. Which
of the following statements about preferred provider organizations (PPOs) is NOT true?
A) A PPO is typically a closed panel or a network with a primary care physician.
B) PPOs charge for services on a fee-for-service basis.
C) In-network care is offered at prearranged or negotiated rates.
D) PPOs must offer complaint resolution procedures to the insured. A PPO is typically a closed panel or a network with a primary care physician. Explanation
PPOs
are designed as open panels or networks that offer care to insureds or entities through both in-network and out-of-network providers. Deductibles and coinsurance are higher for out-of-network care, as those providers and their fees are not part of a negotiated arrangement. The primary difference between a preferred provider organization (PPO) and a point-of-service (POS) plan is that
A) a POS plan utilizes a gatekeeper, while a PPO does not
B) a PPO allows the individual to use any service provider, while a POS plan requires the individual to use only preselected providers
C) a POS plan allows the individual to use any service provider, while a PPO requires the individual to use only preselected providers
D) a PPO utilizes a gatekeeper, while a POS plan does not a POS plan utilizes a gatekeeper, while a PPO does not Explanation
The main difference between a preferred provider
organization and a point-of-service organization is that the POS organization uses a primary care physician (gatekeeper) to provide greater cost control. Both types of plans allow the individual to go outside the system, though the individual then pays a higher portion of the costs. Medical cost management is designed to
A) encourage people to seek medical help when other options are no longer available
B) discourage people from using
health care services
C) influence hospital charges and doctors' fees
D) control health claims expenses control health claims expenses Explanation
Medical cost management is designed to control health claims expenses. It does so in 4 ways: mandatory second opinions, precertification review, ambulatory surgery, and case management. Which of the following statements about point-of-service (POS)
plans is TRUE?
A) A POS plan does not include the use of a deductible or coinsurance.
B) Out-of-network care is billed on a prepaid basis.
C) A POS plan does not require a primary care physician to manage in-network care.
D) A POS plan allows a subscriber to access care both in-network and out-of-network. A POS plan allows a subscriber to access care both in-network and out-of-network. Explanation
A point-of-service (POS) plan, sometimes
referred to as a gatekeeper PPO, affords in-network managed care as well as out-of-network care that is not supervised. Out-of-network care will increase the individual's out-of-pocket costs due to higher coinsurance levels. All out-of-network care is on a fee-for-service basis. As a cost-containment method in medical plans, all of the following are examples of case management provisions EXCEPT
A) concurrent review
B) second surgical
opinion
C) reduction provision
D) precertification provision reduction provision Explanation
Though it is one of the other health insurance provisions, the reduction provision does not fall under the category of case management provisions. All of the other answer choices are examples of case management provisions. A managed health care system that finances and delivers health care services
through contract providers is called
A) a contract health provider
B) an accident and health guaranty association
C) a major medical expense association
D) a health maintenance organization a health maintenance organization Explanation
A health maintenance organization (HMO) is a managed health care system that finances and delivers health care services through contract providers. HMOs usually are corporations that enter into contracts
with various physicians, hospitals, and other medical and dental professionals to provide health care services to HMO members in a specified geographical area. Which of the following statements accurately describes a health maintenance organization (HMO)?
A) It is not required to be approved by the state before offering services to its subscribers.
B) It arranges for health care services for its members on a prepaid basis.
C) It does
not organize or deliver health care services.
D) It provides health insurance coverage specifically to people who cannot obtain coverage from insurance companies. It arranges for health care services for its members on a prepaid basis. Explanation
Health maintenance organizations (HMOs) finance health care services for their members primarily on a prepaid basis. They organize and deliver the services. Subscribers pay a fixed periodic fee (usually
monthly) and in return receive a broad range of health services, from routine doctor visits to emergency and hospital care. The subscriber's fee is payable whether or not the services are used. HMOs rarely charge deductibles; when charges are assessed, they typically take the form of nominal co-payments. Which of the following is NOT a cost containment method used to reduce hospital care costs?
A) Preauthorization
B) Indemnification of
medical expenses
C) Mandatory second opinions
D) Outpatient benefits Indemnification of medical expenses Explanation
Insurers implement measures to reduce the amount spent on medical care. These include outpatient benefits, second surgical opinions, preauthorization, and limits on length of stay. Co-payments are paid by
A) the plan administrator
B) the subscriber
C) the HMO
D)
the provider the subscriber Explanation
HMOs introduced the concept of the co-payment (or co-pay), whereby the subscriber pays a small or relatively flat dollar amount per visit to a health care provider. Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide medical services at a prearranged cost to the insured?
A) DPO
B) MIB
C) HMO
D) PPO PPO Explanation
Preferred provider organizations (PPOs) are groups of doctors and hospitals that contract with an insurer to provide medical services at a prearranged cost, thus allowing insureds to choose among these groups. Which of the following statements regarding health insurance benefits is CORRECT?
A) Premium amounts are determined only by the age of the insured.
B) The
greater a policy's benefits, the more expensive the premium.
C) Policyowners who have the same jobs pay the same premiums.
D) Policyowners who have policies with identical benefits pay the same premiums. The greater a policy's benefits, the more expensive the premium. Explanation
With health insurance, the greater the benefits, the more expensive the premium. Policyowners who have identical policies with identical benefits will not necessarily
pay the same premiums because premiums are determined by a number of factors, such as age, sex, and occupation. HMOs can be a key factor in reducing
A) the number of physicians needed
B) health care costs
C) nurses' unemployment
D) the number of hospitals health care costs Explanation
An HMO is a prepaid health care delivery system in which a physician, hospital, or other provider
contracts to provide basic health care services to enrollees of the plan on a prepaid basis, except for enrollee responsibility for co-payments or deductibles. HMOs have become a competitive alternative for health care providers and those concerned with reducing costs. A relatively small flat dollar amount that HMO subscribers pay for each doctor visit is known as
A) co-payments
B) coinsurance
C) deductibles
D) capitation
fees co-payments Explanation
Co-payments were introduced by HMOs and are flat dollar fees paid per visit by subscribers. Cost-saving measures of managed care include all of the following EXCEPT
A) wellness programs
B) smoking cessation
C) unlimited mental and nervous benefits
D) annual physical visits unlimited mental and nervous benefits Explanation
Managed
care cost savings include well checks, annual visits, routine visits, wellness plans, smoking cessation, and weight loss programs. All of the following are examples of medical cost management EXCEPT
A) denying claims
B) precertification review
C) ambulatory surgery
D) mandatory second opinion denying claims Explanation
Medical cost management is an effective means of controlling costs.
It is the process of controlling how policyholders use their policies. There are 5 general approaches insurers use for cost management: mandatory second opinion, precertification review, ambulatory surgery, case management, and utilization management. Denying claims outright is not a legal or ethical method of controlling costs. In a health maintenance organization, the role of gatekeeper is performed by the insured's
A) claims adjuster
B) insurer
C) primary physician
D) insurance broker primary physician Explanation
Employees who join a managed care organization that is not a point-of-service plan must consult their primary care physician before they receive any medical care. The primary care physician then either provides the care an employee needs or refers the employee to a specialist, a hospital, or an ancillary health care professional. In so doing, the primary care
physician acts as a guide, or gatekeeper, for patients in the health care system. Which of the following is NOT an example of a managed care health plan?
A) PCP
B) POS
C) HMO
D) PPO PCP Explanation
Health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service (POS) plans are all managed care plans that offer comprehensive medical services to their
members. A primary care physician (PCP) is a physician who provides or authorizes all care for a member of an HMO. As part of the gatekeeper system that HMOs often have, members are typically required to involve the PCP in all service decisions to ensure claims will be paid. All of the following are basic health care services offered by HMOs EXCEPT
A) x-ray services
B) inpatient hospital care
C) rehabilitative and home health
services
D) emergency care rehabilitative and home health services Explanation
Basic health care services include emergency care, inpatient hospital and physician care, outpatient medical and chiropractic services, laboratory and x-ray services, coverage for certain low-protein food products, optional coverage for mental health services for alcohol or drug abuse, and chiropractic services on a referral basis as an optional service. Rehabilitative
and home health services are not considered basic health care services; instead, they are characterized as health care services. Which of the following statements about preferred provider organizations is NOT correct?
A) They operate on a fee-for-service basis.
B) Physicians who are part of a PPO are in private practice.
C) They offer health care services to their members at discounted rates that are negotiated in advance.
D)
They offer health care coverage to low-income individuals. They offer health care coverage to low-income individuals. Explanation
A PPO (preferred provider organization) is similar to an HMO, but members pay for services as they are provided at rates that have been discounted in advance for the PPO. Physicians offering their services through a PPO are in private practice. PPOs are not insurers and, thus, do not offer health care coverage.
What is the name of the fixed monthly fee paid by the HMO to the provider?
A) Capitation
B) Fee for service
C) Prepaid fee
D) Primary care fee Capitation Explanation
In addition to the co-pay paid by the provider, the HMO pays a fixed monthly fee to the provider based on the number of HMO subscribers, without consideration for the number of subscriber visits or services provided.
HMOs may provide supplemental health care services. Which of the following is NOT a supplemental health care service?
A) Outpatient care
B) Vision care
C) Home health care
D) Dental care Outpatient care Explanation
HMOs may, at their option, provide certain supplemental health care services for a fee. These include dental care, substance abuse care, vision care, and home health care. Outpatient care is a
basic health care service required by law. The fixed monthly fee paid to the healthcare provider is called
A) the fee-for-service
B) the capitation fee
C) coinsurance
D) the deductible the capitation fee Explanation
HMOs pay a capitation fee which is a fixed monthly fee to a healthcare provider based on the number of HMO members. HMOs
include all of the following features EXCEPT
A) a fee-for-service policy
B) managed care
C) prepaid services
D) a gatekeeper (primary care physician) a fee-for-service policy Explanation
An HMO features managed care, prepaid services, co-pays, a gatekeeper primary care physician, a limited choice of providers, and a limited service area. According to federal law, HMO basic health care
services include all of the following EXCEPT
A) emergency services
B) inpatient and outpatient hospital services
C) vision care services
D) physician services vision care services Explanation
The HMO Act of 1973 specified requirements that must be met for an HMO to receive federal qualification. For example, federally qualified HMOs must provide basic health care services and charge a community rate. Basic health care services include
physician services; inpatient and outpatient hospital services; emergency services; short-term mental health outpatient care, medical treatment, and referral for alcohol or drug abuse; diagnostic laboratory and diagnostic therapeutic radiology; home health services; and preventive health services. However, basic health care services do not include vision care services. All of the following are methods to reduce hospital care costs EXCEPT
A)
second surgical opinions
B) outpatient benefit utilization
C) preauthorization and limits on length of stay
D) nursing home benefits nursing home benefits Explanation
Insurers use many methods to reduce inpatient costs, including outpatient services, second surgical opinions, preauthorization, and limits on length of stays. All the following are alternatives to hospital care EXCEPT
A)
rehabilitative facilities
B) intermediate nursing facilities
C) meal delivery programs
D) skilled nursing facilities meal delivery programs Explanation
Skilled nursing, home health care, and rehabilitative and intermediate nursing facilities all can be less expensive alternatives to hospitals. Lisa is in the hospital awaiting surgery. The doctors meet in the morning to discuss the best way
to proceed as a routine procedure in their PPO. This is an example of
A) concurrent review
B) retrospective review
C) gatekeeping
D) provider credentialing concurrent review Explanation
This is a cost-containment process known as concurrent review, whereby providers review cases on an ongoing basis and assess the best course of action. Which of the following statements about a health
maintenance organization (HMO) is CORRECT?
A) It provides or arranges for health care services for the benefit of its subscribers.
B) It does not need to be approved by the state before offering services to its subscribers.
C) It generally hires medical professionals as employees to provide health care services to the general public.
D) It provides health insurance coverage specifically to people who cannot obtain coverage from insurance companies. It
provides or arranges for health care services for the benefit of its subscribers. Explanation
HMOs finance health care services for their members primarily on a prepaid basis. They also organize and deliver the services. Subscribers pay a fixed periodic fee and receive a broad range of health services. The fee is payable whether or not the services are used. HMOs rarely charge deductibles but may charge a nominal co-payment. To control
costs, medical insurance plans available from commercial insurers and fraternal organizations are likely to provide care through
A) a Blue Cross/Blue Shield plan
B) an HMO
C) an open-network PPO
D) a closed-network PPO an open-network PPO Explanation
Many commercial insurers and fraternals contract with independent physician groups and hospitals, creating extensive, often loosely organized preferred provider organizations for their
insureds. Insureds are given lists of approved providers in their areas. Insureds have the option to go outside the system. However, reimbursements are higher when they use approved providers who are contracted at reduced rates. Which of the following statements regarding PPOs is TRUE?
A) PPOs do not use managed care procedures.
B) Health care services offered by out-out-network providers have lower deductibles and coinsurance than those
offered by in-network providers.
C) Health care services offered by in-network providers are contracted between the PPO and the providers.
D) PPOs do not afford access to a primary care physician. Health care services offered by in-network providers are contracted between the PPO and the providers. Explanation
PPOs do contract with health care providers, starting with primary care providers and including a wide range of medical specialists.
These providers agree, in a contract with the PPO, to accept reduced fees to gain access to the wide base of PPO subscribers. The U.S. Congress passed the Health Maintenance Organization Act in what year?
A) 1973
B) 1960
C) 1968
D) 1979 1973 Explanation
Congress passed the Health Maintenance Organization Act in 1973. The act encouraged the formation of HMOs by providing federal assistance
for planning and development of federally qualified HMOs.
Which of the following regulates the quality of care provided by a health maintenance organization HMO )?
The US Health Care Financing Administration (HCFA) regulates HMOs and has instituted guidelines for reporting and quality assessment in an accreditation approach to quality assurance (see Chapter 15).
What is a health maintenance organization or HMO quizlet?
Health Maintenance Organization (HMO) An organization that provides its members with basic healthcare services for a fixed price and for a given time period.
How does a health maintenance organization HMO work quizlet?
The HMO contracts with an independent medical group to provide a variety of medical services to subscribers. Under the agreement, the HMO pays a capitation fee to the medical group entity directly. A capitation fee is a fixed amount paid monthly per subscriber.
What is the goal of the HMO quizlet?
(6) Preventative Care Services - Main goal of the HMO Act was to reduce the cost of health care by utilizing preventive care. HMOs offer free annual check-ups for the entire family. Also, HMOs offer free or low-cost immunizations to members in an effort to prevent certain diseases.
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