AHM 530 - Tests

Assignment 1: The Network Management Function Reading 1A: The Role of Network Management in a Health Plan Organization
Explain the meaning of network management and list some of the activities that are typically included in this function Describe the role of a network management director, a contracting specialist, and a provider relations representative in network management Define profiling and explain its significance in network management Describe some training and support approaches that health plan organizations (health plans) use to improve the performance of network management staff Explain the relationship between network management and medical management, risk management, member services, and claims administration
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1. By definition, a measure of the extent to which a health plan member can obtain necessary medical services in a timely manner is known as network management quality cost-effectiveness accessibility 2. Decide whether the following statement is true or false: The organizational structure of a health plans network management function often depends on the size and geographic scope of the health plan. With respect to the size of a health plan, it is correct to say that smaller health plans typically have less integration and more specialization of roles than do larger health plans. True False 3. The following paragraph contains an incomplete statement. Select the answer choice containing the term that correctly completes the statement. One important activity within the scope of network management is ensuring the quality of the health plans provider networks. A primary purpose of __________________ is to review the clinical competence of a provider in order to determine whether the provider meets the health plans preestablished criteria for participation in the network. authorization provider relations credentialing
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utilization management 4. One important aspect of network management is profiling, or provider profiling. Profiling is most often used to measure the overall performance of providers who are already participants in the network assess a providers overall satisfaction with a plans service protocols and other operational areas verify a prospective providers professional licenses, certifications, and training familiarize a provider with a plans procedures for authorizations and referrals 5. Network managers rely on a health plans claims administration department for much of the information needed to manage the performance of providers who are not under a capitation arrangement. Examining claims submitted to a health plans claims administration department enables the health plan to determine the number of healthcare services delivered to plan members monitor the types of services provided by the health plans entire provider network evaluate providers practice patterns and compliance with the health plans procedures for the delivery of care all of the above >---------- End of the Test ----------<
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Reading 1B: Environmental Considerations for Network Management
Understand the numerous legislative and regulatory requirements that affect network management Identify the expectations of purchasers and consumers with respect to network management Describe how health plans balance complex and sometimes competing interests and requirements in managing provider panels
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1. The Avignon Company discontinued its contract with a traditional indemnity insurer and contracted exclusively with the Minaret Health Plan to provide the sole healthcare plan to Avignons employees. By agreeing to an exclusive contract with Minaret, Avignon has entered into a type of healthcare contract known as a carrier guarantee arrangement open access total replacement coverage selective contract coverage 2. Federal lawsincluding the Ethics in Patient Referrals Act, the Health Maintenance Organization (HMO) Act of 1973, the Employee Retirement Income Security Act (ERISA), and the Federal Trade Commission Acthave impacted the ways that health plans conduct business. For instance, the Mosaic Health Plan must comply with the following federal laws in order to operate: Regulation 1: Mosaic must establish a mandated grievance resolution mechanism, including a method for members to address grievances with network providers. Regulation 2: Mosaic must not allow its providers to refer Medicare and Medicaid patients toentities in which they have a financial or ownership interest. From the answer choices below, select the response that correctly identifies the federal legislation on which Regulation 1 and Regulation 2 are based. Regulation 1 - The Ethics in Patient Referrals Act Regulation 2 The HMO Act of 1973 Regulation 1 - The HMO Act of 1973 Regulation 2 - The Ethics in Patient Referrals Act Regulation 1 - ERISA Regulation 2 - The Federal Trade Commission Act Regulation 1 - The Federal Trade Commission Act Regulation 2 ERISA
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3. In 1996, Congress passed the Health Insurance Portability and Accountability Act (HIPAA), which increased the continuity and portability of health insurance coverage. One statement that can correctly be made about HIPAA is that it applies to group health insurance plans only limits the length of a health plans pre-existing condition exclusion period for a previously covered individual to a maximum of six months after enrollment. guarantees access to healthcare coverage for small businesses and previously covered individuals who meet specified eligibility requirements. guarantees renewability of group and individual health coverage, provided the insureds are still in good health 4. After HIPAA was enacted, Congress amended the law to include the Mental Health Parity Act (MHPA) of 1996, a federal requirement relating to mental health benefits. One true statement about the MHPA is that it requires all health plans to provide coverage for mental health services requires health plans to carve out mental/behavioral healthcare from other services provided by the plans allows health plans to require patients receiving mental health services to pay higher copayments than patients seeking treatment for physical illnesses prohibits health plans that offer mental health benefits from applying more restrictive limits on coverage for mental illness than on coverage for physical illness 5. From the following answer choices, choose the term that best matches the description. An integrated delivery system (IDS), which controls most providers in a particular specialty, agrees to provide that specialty service to a health plan only on the condition that the health plan agree to contract with the IDS for other services. Group boycott Horizontal division of territories Tying arrangements Concerted refusal to admit 6. From the following answer choices, choose the term that best matches the description. Members of a physician-hospital organization (PHO) denied membership to a physician solely because the physician has admitting privileges at a competing hospital. Group boycott Horizontal division of territories Tying arrangements Concerted refusal to admit
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7. Some states have enacted any willing provider laws. From the perspective of the health plan industry, one drawback of any willing provider laws is that they often result in a reduction of a plans premium rates ability to monitor utilization number of primary care providers (PCPs) number of specialists and ancillary providers 8. In the paragraph below, two statements each contain a pair of terms enclosed in parentheses. Determine which term correctly completes each statement. Then select the answer choice that contains the two terms you have chosen. In most states, a health plan can be held responsible for a providers negligent malpractice. This legal concept is known as (vicarious liability / risk sharing). One step that health plans can take to reduce their exposure to malpractice lawsuits is to state in health plan-provider agreements, marketing collateral, and membership literature that the providers are (employees of the health plan / independent contractors). vicarious liability / employees of the health plan vicarious liability / independent contractors risk sharing / employees of the health plan risk sharing / independent contractors 9. The National Committee for Quality Assurance (NCQA) has integrated accreditation with Health Employer Data and Information Set (HEDIS) measures into a program called Accreditation 99. One statement that can correctly be made about these accreditation standards is that Health plans are required by law to report HEDIS results to NCQA HEDIS restricts its reporting criteria to a narrow group of quantitative performance measures, while NCQA includes a broad range of qualitative performance measures private employer groups purchasing health care coverage increasingly require both NCQA accreditation and HEDIS reporting HEDIS includes measures of a health plans effectiveness of care rather than its cost of care 10. The National Association of Insurance Commissioners (NAIC) Managed Care Plan Network Adequacy Model Act defines specific adequacy and accessibility standards that health plans must meet. In addition, the Model Act requires health plans to hold plan members responsible for unreimbursed charges or unpaid claims allow providers to develop their own standards of care adhere to specified disclosure requirements related to provider contract termination file written access plans and sample contracts with the Centers for Medicaid and Medicare Services (CMS)
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11. The following statement(s) can correctly be made about the TRICARE managed healthcare program of the U.S. Department of Defense. 1. Active-duty military personnel are automatically enrolled in TRICAREs HMO option (TRICARE Prime). 2. Eligible family members and dependents can enroll in TRICARE Prime, the PPO plan (TRICARE Extra), or an indemnity plan (TRICARE Standard). Both 1 and 2 1 only 2 only Neither 1 nor 2 >---------- End of the Test ----------<
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Assignment 2: Strategies for Network Development and Management Reading 2A: Analysis of Market and health plan Needs

Explain how the presence of provider organizations and the level of market maturity affect network strategies Explain how a health plan can use a competitive analysis to determine the size of the network Describe some differences between network needs for large employers and needs for small employers Describe some of the challenges that health plans face when developing networks in rural areas List several different areas for which a health plan should establish goals before beginning to develop or revise a provider network
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Select or enter the best answer for each of the 8 questions. Answer all the questions. Remember to scroll down if necessary. Click Complete the Test to score your answers and view a report.
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1. For this question, if answer choices (A) through C) are all correct, select answer choice (D). Otherwise, select the one correct answer choice. Understanding the level of health plan penetration in a particular market can help a health plan determine which products are most appropriate for that market. Indicators of a mature health plan market include a reduction in the rate of growth in health plan premium levels a reduction in the level of outcomes management and improvement an increase in the rate of inpatient hospital utilization all of the above 2. The Holiday Health Plan is preparing to enter a new market. In order to determine the optimal size of its provider panel in the new market, Holiday is conducting a competitive analysis of provider networks of the markets existing health plans. Consider whether, in conducting its competitive analysis, Holiday should seek answers to the following questions: Question 1: What are the cost-containment strategies of the health plans with increasing market shares? Question 2: What are the premium strategies of the health plans with large market shares? Question 3: What are the characteristics of health plans that are losing market share? In its competitive analysis, Holiday should most likely obtain answers to questions 1, 2, and 3 1 and 2 only 1 and 3 only 2 and 3 only 3. The sizes of the businesses in a market affect the types of health programs
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that are likely to be purchased. Compared to smaller employers (those with fewer than 100 employees), larger employers (those with more than 1,000 employees) are more likely to contract with indemnity health plans more likely to offer their employees a choice in health plans less likely to contract with health plans less likely to require a wide variety of benefits 4. Provider panels can be either narrow or broad. Compared to a similarly sized health plan that uses a broad provider panel, a health plan that uses a narrow provider panel most likely can expect to experience higher contracting costs encounter increased difficulty in utilization management have to charge higher health plan premiums experience lower provider relations costs 5. The following statements are about factors that health plans should consider as they develop provider networks in rural and urban markets. Three of the statements are true, and one of the statements is false. Select the answer choice that contains the FALSE statement. Compared to providers in urban areas, providers in rural areas are less likely to offer discounts to health plans in exchange for directed patient volume. In urban areas, limiting the number of specialists on a panel usually affects the networks market appeal more than does limiting the number of primary care physicians. The greatest opportunity to create competition in rural areas is among the specialty providers in other nearby communities. Typically, hospital contracting is easier in urban areas than in rural areas. 6. Lakesha Frazier, a member of a health plan in a rural area, had been experiencing heart palpitations and shortness of breath. Ms. Fraziers primary care provider (PCP) referred her to a local hospital for an electrocardiogram. The results of the electrocardiogram were transmitted for diagnosis via highspeed data transmission to a heart specialist in a city 500 miles away. This information indicates that the results of Ms. Fraziers electrocardiogram were transmitted using a communications system known as a narrow network an integrated healthcare delivery system telemedicine customized networking 7. A populations demographic factorssuch as income levels, age, gender, race, and ethnicitycan influence the design of provider networks serving that population. With respect to these demographic factors, it is correct to say that higher-income populations have a higher incidence of chronic illnesses than do lowerincome populations compared to other groups, young men are more likely to be attached to
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particular providers a population with a high proportion of women typically requires more providers than does a population that is predominantly male Health plans should not recognize, in either the design of networks or the evaluation of provider performance, racial and ethnic differences in the member population 8. In developing a provider network in an large city with a high concentration of young families, the Gypsum Health Plan has set goals focused on the needs of that particular market. The following statements are about this situation. Three of the statements are true, and one of the statements is false. Select the answer choice that contains the FALSE statement. Gypsum should attempt to recruit providers who offer extended office hours. Gypsum can use the cost-effectiveness of its own existing networks as a benchmark for its cost-savings goals in this market. Gypsum will most likely attempt to contract with HMOs. Gypsum most likely should set lower cost-savings goals in this market than it would in a rural market with few young families. >---------- End of the Test ----------<
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Reading 2B: Considerations for the Structure, Composition, and Size of the Network

Explain how a network-within-a-network approach can benefit a health plan with more than one product in a market Explain the difference between primary care HMOs and open access HMOs List several sources of laws, regulations, or guidelines on network access and adequacy Explain how a tiered network helps a health plan address the cost-access trade-off that health plans typically encounter when setting the size of the provider panel Describe the "build or buy" decision for networks and list some reasons why a health plan might lease a network or outsource development of a network
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Select or enter the best answer for each of the 7 questions. Answer all the questions. Remember to scroll down if necessary. Click Complete the Test to score your answers and view a report. Go to
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1. The Gardenia Health Plan has a national reputation for quality care. When
Gardenia entered a new market, it established a preferred provider organization (PPO), a health maintenance organization (HMO), and a pointof-service product (POS) to serve the plan members in this market. All of the providers included in the HMO or the POS are included in the broader provider panel of the PPO. The POS will be a typical two-level POS that offers a cost-based incentive plans for PCPs, and the HMO is a typical staff model HMO. The network strategy that Gardenia is using to establish its range of healthcare plans is known as the network-within-a-network approach gatekeeper approach tiered network approach preferred tier approach 2. The Gardenia Health Plan has a national reputation for quality care. When Gardenia entered a new market, it established a preferred provider organization (PPO), a health maintenance organization (HMO), and a pointof-service product (POS) to serve the plan members in this market. All of the providers included in the HMO or the POS are included in the broader provider panel of the PPO. The POS will be a typical two-level POS that offers a cost-based incentive plans for PCPs, and the HMO is a typical staff model HMO. The following statement(s) can correctly be made about Gardenias establishment of the PPO and the staff model HMO in its new market: 1. When establishing its PPO network, Gardenia most likely initiated outcomes measurement tools and developed collaborative process improvement relationships with providers. 2. To avoid high overhead expenses in the early stages of market evelopment, Gardenias HMO most likely contracted with specialists and ancillary providers until the plans membership grew to a sufficient level to justify employing these specialists. Both 1 and 2 Neither 1 nor 2 1 Only 2 Only 3. The Gardenia Health Plan has a national reputation for quality care. When Gardenia entered a new market, it established a preferred provider organization (PPO), a health maintenance organization (HMO), and a pointof-service product (POS) to serve the plan members in this market. All of the providers included in the HMO or the POS are included in the broader provider panel of the PPO. The POS will be a typical two-level POS that offers a cost-based incentive plans for PCPs, and the HMO is a typical staff model HMO. One statement that can correctly be made about Gardenias two-level POS product is that
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members who self-refer without first seeing their PCPs will receive no benefits both Gardenia and the PCPs stand to benefit if the non-provider panels are kept relatively narrow members will pay higher coinsurance or copayments if they first see their PCPs each time the plan offers no financial incentives to members to choose an innetwork specialist over a non-network specialist 4. Health plans are required to follow several regulations and guidelines regarding the access and adequacy of their provider networks. The Federal Employee Health Benefits Program (FEHBP) regulations, for example, require that health plans allow members direct access to OB/GYN services allow members direct access to prescription drug services provide access to Title X family-planning clinics provide average office waiting times of no more than 30 minutes for appointments with plan providers 5. Some jurisdictions have enacted corporate practice of medicine laws. One effect that corporate practice of medicine laws have had on HMO provider networks is that these laws typically require incorporated HMOs to practice medicine through licensed employees require HMOs to form exclusive contracts with physician groups who agree to dedicate all or most of their practices to HMO patients in return for a set payment or revenue-sharing restrict the ability of staff model HMOs to hire physicians directly, unless the physicians own the HMO encourage incorporated HMOs to obtain profits from their provisions of physician professional services 6. The actual number of providers included in a provider network may be based on staffing ratios. Staffing ratios relate the number of potential providers in a plans network to the number of individuals in the area to be served by the plan providers in a plans network to the number of enrollees in the plan providers outside a plans network to the number of providers in the plans network support staff in a plans network to the number of medical practitioners in the plans network 7. Before incurring the expense of assembling a new PPO network, the Protect Health Plan conducted a cost analysis in order to determine the costeffectiveness of renting an existing PPO network instead. In calculating the overall cost of renting the network, Protect assumed a premium of $2.52 per member per month (PMPM) and estimated the total number of members to be 9,000. This information indicates that Protect would calculate its annual network rental cost to be $42,857
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$56,700 $272,160 $680,400 >---------- End of the Test ----------< 1 2 3 4 5 6 7 A D D D C B C
Reading 2C: Delegation of Network Management Activities
Define delegation and sub-delegation Explain the difference between "authority" and "accountability" with regard to delegation List some reasons why health plans sometimes delegate activities Identify and describe the steps in the delegation process Describe the primary requirements of the National Committee for Quality Assurance (NCQA) and the American Accreditation HealthCare Commission (the Commission/URAC) for demonstrating appropriate oversight of credentialing delegation
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1. The Aegean Health Plan delegated its utilization management (UM) program to the Silhouette IPA. Silhouette, in turn, transferred authority for case management to Brandon Health Services. In this situation, Brandon is best described as the delegator, and Aegean is ultimately responsible for Brandons performance delegator, and Silhouette is ultimately responsible for Brandons performance subdelegate, and Aegean is ultimately responsible for Brandons performance subdelegate, and Silhouette is ultimately responsible for Brandons performance 2. Although a health plan is allowed to delegate many activities to outside sources, the National Committee for Quality Assurance (NCQA) has determined that some activities are not delegable. These activities include evaluation of new medical technologies overseeing delegated medical records activities developing written statements of members rights and responsibilities all of the above 3. The Brice Health Plan submitted to Clarity Health Services a letter of intent indicating Brices desire to delegate its demand management function to Clarity. One true statement about this letter of intent is that it creates a legally binding relationship between Brice and Clarity most likely contains a confidentiality clause committing Brice and Clarity to maintain the confidentiality of documents reviewed and exchanged in the process prohibits Clarity from performing similar delegation activities for other health plans most likely contains a detailed description of the functions that Brice will delegate to Clarity
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Assignment 3: Selecting Network Providers Reading 3A: Identifying and Recruiting Providers for a Health Plan Network
List and describe the types of providers included in the most managed care networks Discuss the factors that a health plan considers when identifying potential network hospitals and practitioners Explain the advantages and disadvantages of health plan contracting with individual practitioners and provider organizations Discuss the methods that health plans may use to recruit candidates for their provider networks
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1. The following statements are about the specialist component of a provider panel. Select the answer choice containing the correct statement. Ideally, a health plan should have every specialist category represented on its provider panel with appropriate geographic distribution. Most specialist contracts do not ensure the providers adherence to UM policies set up by the health plan. No-balance-billing clauses are not desirable in health plan contracts with specialists. In geographic regions where there is a shortage of PCPs, a health plan is not permitted to contract with specialists to perform primary care services, even for patients with chronic conditions. 2. In contracting with providers, a health plan can use a closed panel or open panel approach. One statement that can correctly be made about an open panel health plan is that the participating providers must be employees of the health plan, rather than independent contractors are prohibited from seeing patients who are members of other health plans typically operate out of their own offices operate according to their own standards of care, rather than standards of care established by the health plan 3. In open panel contracting, there are several types of delivery systems. One such delivery system is the faculty practice plan (FPP). One likely result that a health plan will experience by contracting with an FPP is that the health plan will be able to select most of the physicians in the FPP achieve the highest level of cost effectiveness possible experience limited control over utilization achieve the most effective case management possible 4. The following statement(s) can correctly be made about hospitalists.
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1. The hospitalists main function is to coordinate diagnostic and treatment activities to ensure that the patient receives appropriate care while in the hospital. 2. The hospitalists role clearly supports the health plan concept of disease management. Both 1 and 2 1 only 2 only Neither 1 nor 2 5. Salvatore Arris is a member of the Crescent Health Plan, which provides its members with a full range of medical services through its provider network. After suffering from debilitating headaches for several days, Mr. Arris made an appointment to see Neal Prater, a physicians assistant in the Crescent network who provides primary care under the supervision of physician Dr. Anne Hunt. Mr. Prater referred Mr. Arris to Dr. Ginger Chen, an ophthalmologist, who determined that Mr. Arris symptoms were indicative of migraine headaches. Dr. Chen prescribed medicine for Mr. Arris, and Mr. Arris had the prescription filled at a pharmacy with which Crescent has contracted. The pharmacist, Steven Tucker, advised Mr. Arris to take the medicine with food or milk. In this situation, the person who functioned as an ancillary service provider is Mr. Prater Dr. Hunt Dr. Chen Mr. Tucker 6. Open panel health plans can contract with individual providers or with various provider groups when developing their networks. The following statements are about factors that an open panel health plan might consider in contracting with different types of provider organizations. Select the answer choice that contains the correct statement. One limitation of contracting with multispecialty groups is that a health plan obtains only specialty consultants, but not PCPs. One benefit to a health plan in contracting with an integrated delivery system (IDS) is the ability to have a network in rapid order and to enter into a new market or one that is already competitive. A health plan that contracts with an individual practice association (IPA) has a greater ability to select and deselect individual physicians than when contracting directly with the providers. A health plan that contracts with an IDS is able to eliminate the antitrust risk that exists when contracting with an IPA. 7. Health plans use a variety of sources to find candidates to recruit for their provider networks. In general, two of the most effective methods of finding candidates are through word of mouth and on-site training programs word of mouth and direct mail
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advertisements in local newspapers and on-site training programs advertisements in local newspapers and direct mail >---------- End of the Test ----------< 1 2 3 4 5 6 7 A C C B D B B
Reading 3B: Collecting and Verifying Data for Credentialing Purposes
Explain the data collection and verification processes used in credentialing and describe their importance to a health plan's selection of network physicians Describe the role played in data collection and verification by: American Board of Medical Specialties (ABMS) Federation of State medical Boards National Practitioner Data Bank (NPDB) Healthcare Integrity and Protection Data Bank (HIPDB) provider profiling Explain the liability issues involved with credentialing decisions, including: requirements of the Americans with Disabilities Act (ADA), confidentiality, vicarious liability, violation of due process, and negligent credentialing Describe how and why health plans delegate credentials verification to third parties Describe the data collection and verification services provided by hospitals and medical facilities, Physician Organization Certification (POC) program, and credentials verification organizations (CVOs)
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1. During the credentialing process, a health plan verifies the accuracy of information on a prospective network providers application. One true statement regarding this process is that the health plan has a legal right to access a prospective providers confidential medical records at any time must limit any evaluations of a prospective providers office to an assessment of quantitative factors, such as the number of doublebooked appointments a physician accepts at the end of each day is prohibited by law from conducting primary verification of such data as a prospective providers scope of medical malpractice insurance coverage and federal tax identification number must complete the credentialing process before a provider signs the network contract or must include in the signed document a provision that the final contract is contingent upon the completion of the credentialing process 2. The Festival Health Plan is in the process of recruiting physicians for its provider network. Festival requires its network physicians to be board certified. The following individuals are provider applicants whose qualifications are being considered: Applicant 1 has completed his surgical residency, and he recently passed a qualifying examination in his field. Applicant 2 has completed her residency in dermatology, and she is scheduled to take qualifying examinations in the next Six months. Applicant 3 completed his residency in pediatric medicine six years ago, but
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he has not yet passed a qualifying examination in his field. With regard to these applicants, it can correctly be stated that only Applicants 1 and 2 are board certified Applicants 2 and 3 are board certified Applicant 1 is board certified Applicant 3 is board certified 3. The Justice Health Plan is eligible to submit reportable actions against medical practitioners to the National Practitioner Data Bank (NPDB). Justice is considering whether it should report the following actions to the NPDB: Action 1A medical malpractice insurer made a malpractice payment on behalf of a dentist in Justices network for a complaint that was settled out of court. Action 2Justice reprimanded a PCP in its network for failing to follow the health plans referral procedures. Action 3Justice suspended a physicians clinical privileges throughout the Justice network because the physicians conduct adversely affected the welfare of a patient. Action 4Justice censured a physician for advertising practices that were not aligned with Justices marketing philosophy. Of these actions, the ones that Justice most likely must report to the NPDB include Actions 1, 2, and 3 only 1 and 3 only 2 and 4 only 3 and 4 only 4. The NPDB specifies the entities that are eligible to request information from the data bank, as well as the conditions under which requests are allowed. In general, entities that are eligible to request information from the NPDB include medical malpractice insurers and the general public medical malpractice insurers and professional societies that are screening applicants for membership the general public and state licensing boards state licensing boards and professional societies that are screening applicants for membership 5. Participating providers in a health plans network must undergo recredentialing on a regular basis. During recredentialing, a health plan typically reviews a providers current, updated application information, as well as
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providers peer reviews and performance reports on the provider a providers current, updated application information, as well as the providers education and prior work history a providers education and prior work history only peer reviews and performance reports on a provider and the providers prior work history only 6. With respect to hiring practices, one step that a health plan most likely can take to avoid violating the terms of the Americans with Disabilities Act (ADA) is to require a medical examination prior to accepting an application for employment include in the employment application questions pertaining to health status make a conditional offer of employment, and then require the candidate to have an examination prior to granting specific staff privileges require applicants to answer questions pertaining to the use of drugs and alcohol 7. Determine whether the following statement is true or false: The NCQA has established a Physician Organization Certification (POC) program for the purpose of certifying medical groups and independent practice associations for delegation of certain NCQA standards, including data collection and verification for credentialing and recredentialing. True False 8. For this question, if answer choices (A) through (C) are all correct, select answer choice (D). Otherwise, select the one correct answer choice. A credentials verification organization (CVO) can be certified to verify certain pertinent credentialing information, including liability claims histories of prospective providers hospital privileges of prospective providers malpractice insurance on prospective providers all of the above >---------- End of the Test ----------<
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Assignment 4: Provider Contracting: Part One Reading 4A: The Provider Contract
Explain why health plans enter into legal contracts with providers Describe the essentials elements of a contractual relationship Identify the differences and similarities between a comprehensive and a brief provider contract Describe the major elements in a comprehensive contract Discuss the goals that a health plan may try to reach through its contractual strategies
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1. The introductory paragraph of a provider contract is generally followed by a section called the recitals. The recitals section of the contract typically specifies the purpose of the agreement manner in which the provider is to bill for services definitions of key terms to be used in the contract rate at which the provider will be compensated 2. Most health plan contracts provide an outline of the criteria that a healthcare service must meet in order to be considered medically necessary. Typically, in order for a healthcare service to be considered medically necessary, the service provided by a physician or other healthcare provider to identify and treat a members illness or injury must be consistent with the symptoms of diagnosis furnished in the least intensive type of medical care setting required by the members condition in compliance with the standards of good medical practice all of the above 3. When the Rialto Health Plan determines which of the emergency services received by its plan members should be covered by the health plan, it is guided by a standard which describes emergencies as medical conditions manifesting themselves by acute symptoms of sufficient severity (including severe pain) such that a person who possesses an average knowledge of health and medicine could reasonably expect the absence of immediate medical attention to result in placing the health of the individual in serious jeopardy. This standard, which was adopted by the NAIC in 1996, is referred to as the medical necessity standard prudent layperson standard all-or-none standard reasonable and customary standard
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4. The provider contract between the Ocelot Health Plan and Dr. Enos Zorn, one of the health plans participating providers, is a brief contract which includes, by reference, an Ocelot provider manual. This manual contains much of the information found in Ocelots comprehensive provider contracts. The following statements are about Dr. Zorns provider contract. Select the answer choice containing the correct statement. All statements in the provider contract shall be deemed to be warranties, because all statements of facts contained in the contract must be true only in those respects material to the contract. Because the provider manual is part of the contract, Ocelot must make sure that its provider manual is comprehensive and up-to-date. Because the provider contract is a brief contract, Ocelot most likely is prohibited from amending the contract unilaterally, even if it gives Dr. Zorn advance notice of its intent to amend the contract. Areas that should be covered in the provider manual, and not in the body of the contract, include any specific legal issues relevant to the contract. 5. A provider contract describes the responsibilities of each party to the contract. These responsibilities can be divided into provider responsibilities, health plan responsibilities, and mutual obligations. Mutual obligations typically include provisions for marketing the plans product payment arrangements between the plan and the provider verification of the plans eligibility to do business management of the contents of members medical records 6. The Medea Clinic is a network provider for Delphic Healthcare. Delphic transferred the contract it held with Medea to the Elixir HMO, an entity that was not party to the original contract. The process by which Delphic transferred the contract it held with Medea to Elixir is known as most-favorednation arrangement a limit on action a consideration an assignment 7. Dr. Eve Barlow is a specialist in the Amity Health Plans provider network. Dr. Barlows provider contract with Amity contains a typical most-favorednation arrangement. The purpose of this arrangement is to require Dr. Barlow and Amity to use arbitration to resolve any disputes regarding the contract specify that the contract is to be governed by the laws of the state in which Amity has its headquarters require Dr. Barlow to charge Amity her lowest rate for a medical service she has provided to an Amity plan member, even if the rate is lower than the price negotiated in the contract state that the contract creates an employment or agency relationship, rather than an independent contractor relationship, between Dr. Barlow and Amity
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Reading 4B: The Negotiation Process for Provider Contracting
List some circumstances that may result in renegotiation of a provider contract List and describe some of the functions that are often represented on health plan and provider negotiating teams Describe some types of information that the health plan typically seeks about a provider, and vice versa, when preparing for provider contract negotiation Describe the process for setting objectives for negotiation
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1. Health plan contract negotiations with an integrated delivery system (IDS) or a hospital are usually lengthier and more complex than negotiations with a single-specialty provider. True False 2. An health plans contract negotiation team consists of several skilled individuals from different areas. At least one of the members is responsible for evaluating the wording of specific clauses to ensure that the health plans rights are protected, as well as to ensure that the contract is in compliance with state and federal regulation. By profession, this member of the contract negotiation team is typically a medical director an attorney a financial manager a claims manager 3. The following statements are about the negotiation process of provider contracting. Three of the statements are true and one of the statements is false. Select the answer choice containing the FALSE statement. While preparing for negotiations, the health plan usually sends the provider an application to join the provider network, a list of credentialing requirements, and a copy of the proposed provider contract, which may or may not include the proposed reimbursement schedule. In general, the ideal negotiating style for provider contracting is a collaborative approach. Typically, the health plan and the provider negotiate the reimbursement arrangement between the parties before they negotiate the scope of services and the contract language. The actual signing of the provider contract typically takes place after negotiations are completed. >---------- End of the Test ----------<
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Assignment 5: Provider Contracting: Part Two Reading 5A: Responsibilities of health plans and Providers Under Provider Contracts
Describe a low-enrollment guarantee clause and explain how health plans use low-enrollment guarantee clauses in capitated contracts Explain two situations in which health plans modify existing provider contracts and two methods of modification Describe the issues about physician/patient communication that may be of concern to providers List several reasons why a contract with a primary care provider should describe the scope of service in detail List and describe three types of termination clauses Explain the role of the due process clause in the termination of providers
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1. The following statements are about some of the issues surrounding the contractual responsibilities of health plans. Select the answer choice containing the correct statement. Typically, health plans are required to pay completed claims within 10 days of submission. health plans typically are prohibited from examining the financial soundness of a self-funded employer plan that relies on the health plan to pay providers for services received by the plans members. Patient delivery is one of the most significant factors that health plans consider when determining whether provider services should be reimbursed on a capitated or fee-for-service (FFS) basis. health plans require all providers to agree to an exclusive provider contract. 2. From the following answer choices, choose the type of clause or provision described in this situation. The Idlewilde Health Plan includes in its provider contracts a clause or provision that allows the terms of the contract to renew unchanged each year. Cure provision Hold-harmless provision evergreen clause Exculpation clause 3. From the following answer choices, choose the type of clause or provision described in this situation. The provider contract between Dr. Olin Norquist and the Granite Health Plan specifies a time period for the party who has breached the contract to remedy the problem and avoid termination of the contract.
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Cure provision Hold-harmless provision Evergreen clause Exculpation clause 4. From the following answer choices, choose the type of clause or provision described in this situation. The Aviary Health Plan includes in its provider contracts a clause or provision that places the ultimate responsibility for an Aviary plan members medical care on the provider. Cure provision Hold-harmless provision Evergreen clause Exculpation clause 5. The following statements are about the responsibilities that providers are expected to assume under most provider contracts with health plans. Select the answer choice containing the correct statement. All health plans now include in their provider contracts a statement that explicitly places responsibility for the medical care of plan members on the health plan rather than on the provider. According to the wording of most provider contracts, the responsibility of providers to deliver medical services to a plan member is not contingent upon the providers receipt of information regarding the members eligibility for these services. Most health plans include in their provider contracts a clause which requires providers to maintain open communication with plan members regarding appropriate treatment plans, even if the services are not covered by the members health plan. Most provider contracts require participating providers to discuss health plan payment arrangements with patients who are covered by the plan. 6. With respect to contractual provisions related to provider-patient communications, nonsolicitation clauses prohibit providers from encouraging patients to switch from one health plan to another disclosing confidential information about the health plans reimbursement structure dispersing confidential financial information regarding the health plan discussing alternative treatment plans with patients 7. The provider contract that Dr. Huang Kwan has with the Poplar Health Plan includes a typical scope of services provision. The medical service that Dr. Kwan provided to Alice Meyer, a Poplar plan member, is included in the scope of services. The following statement(s) can correctly be made about this particular medical service: A. Dr. Kwan most likely was required to seek authorization from Poplar
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before performing this particular service. B. Dr. Kwan most likely was paid on a FFS basis for providing this service. Both A and B A only B only Neither A nor B 8. If a third party is responsible for injuries to a plan member of the Hope Health Plan, then Hope has a contractual right to file a claim for the resulting healthcare costs against the third party. This contractual right to recovery from the third party is known as subrogation partial capitation coordination of benefits a remedy provision 9. The Octagon Health Plan includes a typical indemnification clause in its provider contracts. The purpose of this clause is to require Octagons network providers to agree not to sue or file claims against an Octagon plan member for covered services reimburse Octagon for costs, expenses, and liabilities incurred by the health plan as a result of a providers actions maintain the confidentiality of the health plans proprietary information agree to accept Octagons payment as payment in full and not to bill members for anything other than contracted copayments, coinsurance, or deductibles 10. The provider contract between the Regal Health Plan and Dr. Caroline Quill contains a type of termination clause known as termination without cause. One true statement about this clause is that it requires Regal to send a report to the appropriate accrediting agency if the health plan terminates Dr. Quills contract without cause requires that Regal must base its decision to terminate Dr. Quills contract on clinical criteria only allows either Regal or Dr. Quill to terminate the contract at any time, without any obligation to provide a reason for the termination or to offer an appeals process allows Regal to terminate Dr. Quills contract at the time of contract renewal only, without any obligation to provide a reason for the termination or to offer an appeals process >---------- End of the Test ----------<
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Reading 5B: Compensation Arrangements Between health plans and Providers
Explain how an MCO transfers financial risk to providers through reimbursement arrangements Describe the primary advantages and disadvantages of fee-for-service, salary, and capitation payment systems List and describe four types of capitation Explain how health plans use incentives in compensation arrangements List and describe four ways to manage a provider's financial risk Describe some factors that influence the way a health plan compensates its providers
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1. The Ross Health Plan compensates Dr. Cecile Sanderson on a FFS basis. In order to increase the level of reimbursement that she would receive from Ross, Dr. Sanderson submitted the code for a comprehensive office visit. The services she actually provided represented an intermediate level of service. Dr. Sandersons action is an example of a type of false billing procedure known as cost shifting churning unbundling upcoding 2. The Sweeney Health Plan uses the discounted fee-for-service (DFFS) method to compensate some of its providers. Under this method of compensation, Sweeney calculates payments based on the standard fees of indemnity health insurance plans, adjusted by region the Medicare fee schedules used by other health plans, adjusted by region whichever amount is higher, the billed charge or the DFFS amount whichever amount is lower, the billed charge or the DFFS amount 3. One type of fee schedule payment system assigns a weighted unit value for each medical procedure or service based on the cost and intensity of that service. Under this system, the unit values for procedural services are generally higher than the unit values for cognitive services. This system is known as a wrap-around payment system relative value scale (RVS) payment system resource-based relative value scale (RBRVS) system capped fee system 4. One true statement about the compensation arrangement known as the case rate system is that, under this system,
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providers stand to gain or lose based on the number and types of treatments used for each case providers have no incentives to take an active role in managing cost and utilization payors cannot adjust standard case rates to reflect the severity of the patients condition or complications that arise from multiple medical problems payors have the opportunity to benefit from the providers cost savings 5. Health plans often negotiate compensation arrangements that transfer some or all of the financial risk associated with delivering healthcare services to network providers. The following statements are about these compensation arrangements. Select the answer choice containing the correct statement. A per diem system typically places a healthcare facility at risk for controlling utilization and costs internally. One likely reason that an health plan would use a fee schedule system to compensate providers is that this system transfers most of the financial risk to the provider. Under a salary system, a provider assumes no service risk. The use of a FFS or a salary system allows an health plan to transfer a greater proportion of financial risk to providers than does the use of capitation. 6. An health plan enters into a professional services capitation arrangement whenever the health plan contracts with a medical group, clinic, or multispecialty IPA that assumes responsibility for the costs of all physician services related to a patients care pays individual specialists to provide only radiology services to all plan members transfers all financial risk for healthcare services to a provider organization and the provider, in turn, covers virtually all of a patients medical expenses contracts with a primary care provider to cover primary care services only 7. The following statements are about incentive programs used for providers. Select the answer choice containing the correct statement. Risk pools based on aggregate provider performance eliminate problems associated with free riders. A hospital bonus pool is usually split between the health plan and the PCPs. Bonus pools based on the performance of specific providers are usually easier to administer than those based on the performance of the plan as a whole. For providers, withhold arrangements eliminate the risk of losing base income.
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8. To protect providers against business losses, many health plan-provider contracts include carve-out provisions to help providers manage financial risk. The following statements are examples of such provisions. The Apex Health Plan carves out immunizations from PCP capitations. Apex compensates PCPs for immunizations on a case rate basis. The Bengal Health Plan carves out behavioral healthcare services from the scope of PCP services because these services require specialized knowledge and skills that most PCPs do not possess.
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From the answer choices below, select the response that best identifies the types of carve-outs used by Apex and Bengal. Apex: disease-specific carve-out Bengal: specialty services carve-out Apex: disease-specific carve-out Bengal: specific-service carve-out Apex: specific-service carve-out Bengal: specialty services carve-out Apex: specific-service carve-out Bengal: disease-specific carve-out 9. The Athena Medical Group has purchased from the Corinthian Insurance Company individual stop-loss insurance coverage for primary and specialty care services with a $5,000 attachment point and 10 percent coinsurance. One of Athenas patients accrued $8,000 of medical costs for primary and specialty care treatment. In this situation, Athena will be responsible for paying an amount equal to $300, and Corinthian is obligated to reimburse Athena in the amount of $2,700 $2,700, and Corinthian is obligated to reimburse Athena in the amount of $5,300 $5,300, and Corinthian is obligated to reimburse Athena in the amount of $2,700 $7,700, and Corinthian is obligated to reimburse Athena in the amount of $300 10. The Ionic Group, a provider group with 10,000 plan members, purchased for its hospital risk pool aggregate stop-loss insurance with a threshold of 110% of projected costs and a 10% coinsurance provision. Ionic funds the hospital risk pool at $40 per member per month (PMPM). If Ionics actual hospital costs are $5,580,000 for the year, then, under the aggregate stoploss agreement, the stop-loss insurer is responsible for reimbursing Ionic in the amount of $30,000 $270,000 $300,000 $702,000 >---------- End of the Test ----------<
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Assignment 6: Network Management Considerations for Different Types of Providers Reading 6A: Strategies for the Specialist Component of the Provider Network
Describe some of the challenges health plans face when contracting with hospital-based specialists Describe the different reimbursement options that health plans typically use for specialists Discuss some common problems that health plans encounter when using capitation for specialty care
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1. The method that the Autumn Health Plan uses for reimbursing dermatologists in its provider network involves paying them out of a fixed pool of funds that is actuarially determined for this specialty. The amount of funds that Autumn allocates to dermatologists is based on utilization and costs of services for that discipline. Under this reimbursement method, a dermatologist who is under contract to Autumn accumulates one point for each new referral made to the specialist by Autumns PCPs. If the referral is classified as complicated, then the dermatologist receives 1.5 points. The value of Autumns dermatology services fund for the first quarter was $15,000. During the quarter, Autumns PCPs made 90 referrals, and 20 of these referrals were classified as complicated. Autumns method of reimbursing specialty providers can best be described as a disease-specific arrangement contact capitation arrangement risk adjustment arrangement withhold arrangement 2. The method that the Autumn Health Plan uses for reimbursing dermatologists in its provider network involves paying them out of a fixed pool of funds that is actuarially determined for this specialty. The amount of funds that Autumn allocates to dermatologists is based on utilization and costs of services for that discipline. Under this reimbursement method, a dermatologist who is under contract to Autumn accumulates one point for each new referral made to the specialist by Autumns PCPs. If the referral is classified as complicated, then the dermatologist receives 1.5 points. The value of Autumns dermatology services fund for the first quarter was $15,000. During the quarter, Autumns PCPs made 90 referrals, and 20 of these referrals were classified as complicated. In determining the first quarter payment to dermatologists, Autumn would
accurately calculate the value of each referral point to be $111.11 $125.00 $150.00 $166.67 3. Dr. Janet Dubois is a radiologist who practices exclusively at the Rightway Healthcare Center. This information indicates that Dr. Dubois is employed by Rightway as an academic practitioner an independent practitioner a network manager a hospital-based specialist 4. Promise, Inc., a corporation that specializes in cancer services, employs its physicians and support staff and provides facilities and ancillary services for cancer patients. Promise has contracted with the Cordelia Health Plan to provide all specialty services for Cordelia plan members who are undergoing cancer treatment. In return, Promise receives a capitated amount from Cordelia. Promise is an example of a type of specialty services organization known as a specialty IPA disease management company single specialty management specialist specialty network management company 5. If the Oconee Health Plan reimburses its specialty care physicians (SCPs) under a typical retainer method, then Oconee pays SCPs a separate amount for each service provided, and the payment amount is based solely on a resource-based relative value scale (RBRVS) a specified fee that remains the same regardless of how much or how little time or effort is spent on the medical service performed a set amount each month, and Oconee reconciles its payment at periodic intervals on the basis of actual utilization a set amount of cash equivalent to a defined time periods expected reimbursable charges >---------- End of the Test ----------<
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Reading 6B: Strategies for Contracting with Hospitals and Subacute Care Facilities
Explain why health plans sometimes contract with centers of excellence List issues that a health plan considers when selecting a center of excellence List and describe methods that health plans commonly use to reimburse hospitals for inpatient and outpatient services Define ambulatory payment classifications (APCs) and compare this system to diagnosis-related groups (DRGs) Explain why health plans contract with facilities for subacute care and describe the main criteria for selecting subacute care providers
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1. One reimbursement method that health plans can use for hospitals is the ambulatory payment classifications (APCs) method. APCs bear a resemblance to the diagnosis-related groups (DRGs) method of reimbursement. However, when comparing APCs and DRGs, one of the primary differences between the two methods is that only the APC method is typically used for outpatient care assigns a single code for treatment applies to treatment received during an entire hospital stay is considered to be a retrospective payment system 2. Four types of APCs are ancillary APCs, medical APCs, significant procedure APCs, and surgical APCs. An example of a type of APC known as an ancillary APC is a biopsy a medical APC is radiation therapy a significant procedure APC is a computerized tomography (CT) scan a surgical APC is an emergency department visit for cardiovascular disease 3. The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method. The per diem reimbursement method will require Gladspell to pay Ellysium a fixed rate for each day a plan member is treated in Ellysiums subacute care facility discounted charge for all subacute care services given by Ellysium rate that varies depending on patient category fixed rate per enrollee per month 4. The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method.
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If Gladspells per diem contract with Ellysium is typical, then the per diem payment will cover such medical costs as laboratory tests respiratory therapy semiprivate room and board radiology services 5. The Gladspell HMO has contracted with the Ellysium Hospital to provide subacute care to its plan members. Gladspell pays Ellysium by using a per diem reimbursement method. If the Ellysium subacute care unit is typical of most hospital-based subacute skilled nursing units, then this unit could be used for patients who no longer need to be in the hospitals acute care unit but who still require daily medical care and monitoring regular rehabilitative therapy respiratory therapy all of the above >---------- End of the Test ----------<
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Reading 6C: Pharmacy Networks
Describe the advantages early pharmacy networks had over direct pay and cost-sharing pharmacy systems Identify the features that distinguish pharmacy networks from other health plan networks Describe the impact of pharmacy benefits management in managed care Explain the advantages and disadvantages of maintaining in-house management of pharmacy benefits or outsourcing benefits through a pharmacy benefit management company (PBM) Describe the options available for delivering pharmacy services Identify the methods that health plans and PBMs use to reimburse network pharmacies
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1. The method of pharmaceutical reimbursement under which a plan member obtains prescription drugs from participating network pharmacies by presenting proper identification and paying a specified copayment is the wholesale acquisition cost (WAC) approach reimbursement approach service approach cognitive approach 2. In most health plan pharmacy networks, the cost component of the reimbursement formula is based on the average wholesale price (AWP). One true statement about the AWP for prescription drugs is that AWPs tend to vary widely from region to region of the United States the AWP is often substantially higher than the actual price the pharmacy pays for prescription drugs a health plans contracted reimbursement to a pharmacy for prescription drugs is typically the AWP plus a percentage, such as 5% the AWP usually is lower than the estimated acquisition cost (EAC) for most prescription drugs 3. In the paragraph below, two statements each contain a pair of terms enclosed in parentheses. Determine which term correctly completes each statement. Then select the answer choice that contains the two terms you have chosen. A formulary lists the drugs and treatment protocols that are considered to be the preferred therapy for a given managed population. The Fairfax Health Plan uses the type of formulary which covers drugs that are on its preferred list as well as drugs that are not on its preferred list. This information indicates that Fairfax uses the (closed / open) formulary method. In using the formulary approach to pharmacy benefits management, Fairfax most likely experiences (higher / lower) costs for its members prescription drugs than it would if it did not use a formulary. closed / higher
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closed / lower open / higher open / lower 4. The following statements are about the inclusion of unified pharmacy benefits in health plan healthcare packages. Select the answer choice containing the correct statement. When pharmacy benefits management is incorporated into an health plans operations as a unified benefit, the health plan establishes pharmacy networks, but a pharmacy benefits management (PBM) company manages their operations. Under a unified pharmacy benefit, an health plan cannot use mail-order services to provide drugs to its members. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs typically give health plans more control over patient access to prescription drugs. Compared to programs that do not manage pharmacy benefits in-house, unified pharmacy benefits programs make drug therapy interventions for plan members more difficult. 5. The following statements can correctly be made about the advantages and disadvantages to an health plan of using the various delivery options for pharmacy services. A disadvantage of using open pharmacy networks is that the health plans control over costs is limited to setting reimbursement levels. An advantage of using performance-based systems is that they tend to increase participation in the health plans pharmacy network. A disadvantage of using customized pharmacy networks is that these networks typically can be implemented only in companies with fewer than 500 employees. All of these statements are correct. 6. The Walton Health Plan uses the fee-for-service pharmaceutical reimbursement approach known as the maximum allowable cost (MAC) method. If Waltons MAC list specifies a cost of 8 cents per tablet for a particular drug but the participating pharmacy pays 10 cents per tablet for the drug, then Walton will be obligated to reimburse the pharmacy for 8 cents per tablet, but the pharmacy can bill the subscriber for the remaining 2 cents per tablet 8 cents per tablet, and the pharmacy cannot bill the subscriber for the remaining 2 cents per tablet 10 cents per tablet, but the pharmacy must refund the extra 2 cents per tablet to the subscriber 10 cents per tablet, and the pharmacy is not required to refund the extra 2 cents per tablet to the subscriber 7. One reason that an health plan would want to use the actual acquisition cost (AAC) pricing system to calculate its drug costs is that, of the systems commonly used to calculate drug costs, the AAC system provides the lowest level of cost for the health plan
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most closely represents what pharmacies are actually charged for prescription drugs offers the best control over multiple-source pharmaceutical products is the least expensive pricing system for the health plan to implement >---------- End of the Test ----------<
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Reading 6D: Considerations and Strategies for Specialty Services
Explain some of the different carve-out arrangements that an MCO may use to arrange access to specialty services Describe the criteria a health plan uses to select a sole-source provider for specialty services Explain how the role of the PCP in behavioral healthcare varies among health plans Explain health plan's options for arranging access to clinical eye care and routine eye care Distinguish between ophthalmologists, optometrists, opticians List some reasons health plans often find the development and management of alternative healthcare networks to be challenging List some ways in which a home healthcare agency can prepare itself to accept capitated contracts
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1. The Omni Health Plan is interested in expanding the specialty services it offers to its plan members and is considering contracting with the following providers of specialty services: The Apex Company, a managed vision care organization (MVCO) The Baxter Managed Behavioral Healthcare Organization (MBHO) The Cheshire Dental Health Maintenance Organization (DHMO)
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As part of its credentialing process, Omni would like to verify that each of these providers has met NCQAs accreditation standards. However, with regard to these three specialty service providers, an NCQA accreditation program currently exists for Apex and Baxter only Apex and Cheshire only Baxter and Cheshire only Baxter only 2. Many health plans opt to carve out behavioral healthcare (BH) services. However, one argument against carving out BH services is that this action most likely can result in slower access to BH care for plan members increased collaboration between BH providers and PCPs fewer specialized BH services for plan members decreased continuity of BH care for plan members 3. The following statements are about managed dental care. Three of these statements are true, and one is false. Select the answer choice containing the FALSE statement. Managed dental care is federally regulated. Dental HMOs typically need very few healthcare facilities because almost all dental services are delivered in an ambulatory care setting. Currently, there are no nationally recognized standards for quality in
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managed dental care. Processes for selecting dental care providers vary greatly according to state regulations on managed dental care networks and the health plans standards. 4. Jay Mercer is covered under his health plans vision care plan, which includes coverage for clinical eye care but not for routine eye care. Recently, Mr. Mercer had a general eye examination and got a prescription for corrective lenses. Mr. Mercers vision care plan will cover. both the general eye examination and the prescription for corrective lenses the general eye examination only the prescription for corrective lenses only neither the general eye examination nor the prescription for corrective lenses 5. An increasing number of health plans offer coverage for alternative healthcare services. One such alternative healthcare service is biofeedback. Biofeedback is an approach that is based on an ancient Chinese system of healing in which needles are inserted into specific sites on the body to relieve pain treats diseases with tiny doses of substances which, in healthy people, are capable of producing symptoms like those of the disease being treated uses electronic monitoring devices to teach a patient to develop conscious control of involuntary bodily functions, such as heart rate and body temperature incorporates a variety of therapies, such as homeopathy, lifestyle modification, and herbal medicines, to support and maintain the bodys ability to heal itself 6. The provider contract that the Danube Health Plan has with the Viola Home Health Services Organization states that Danube will use a typical flat rate reimbursement arrangement to compensate Viola for the skilled nursing services it provides to Danubes plan members. A portion of the contracts reimbursement schedule is shown below: Home Health Licensed Practical Nurse (LPN): $45 per visit or $90 per diem Home Health Registered Nurse (RN): $50 per visit or $110 per diem
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Last month, an LPN from Viola visited a Danube plan member and provided 1 hours of home healthcare, and an RN from Viola visited another Danube plan member and provided 7 hours of home healthcare. The following statement(s) can correctly be made about Danubes payment to Viola for these services: A. Danube most likely owes $90 for the LPNs skilled nursing services and $110 for the RNs skilled nursing services.
B. Danubes payment amount could be different from the amount called for in the reimbursement schedule if the level of care provided to one of these plan members was significantly different from the level of care normally provided by Violas RNs and LPNs. Both A and B A only B only Neither A nor B >---------- End of the Test ----------<
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Assignment 7: Establishing Networks for Government-Sponsored Programs Reading 7A: Special Considerations for Medicare Networks
Identify federal legislation that has affected the Medicare program and describe its impact on Medicare health plan List the three types of health plans that are authorized to apply for Medicare contracts under the Medicare + Choice programs, and identify the two types of health plans that are allowed to establish closed networks of providers Describe the steps that Medicare + Choice health plans must take to ensure that network services are available and accessible to enrollees Describe the restrictions on the use of physician incentive plans by Medicare + Choice health plans Discuss several other HCFA regulations affecting the relationship between Medicare + Choice health plans and network providers Discuss some special needs of Medicare beneficiaries that health plans should consider when establishing Medicare networks
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1. Prior to the enactment of the Balanced Budget Act (BBA) of 1997, payment for Medicare-covered primary and acute care services was based on the adjusted average per capita cost (AAPCC). The AAPCC is defined as the average cost of services delivered to all patients living in a specified geographic region actuarial value of the deductible and coinsurance amounts for basic Medicare-covered benefits fee-for-service amount that the Centers for Medicaid and Medicare Services (CMS) would pay for a Medicare beneficiary, adjusted for age, sex, and institutional status average fixed monthly fee paid by all Medicare enrollees in a specified geographic region 2. The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 allowed competitive medical plans (CMPs) to participate in the Medicare program on a risk basis. Under the terms of Medicare risk contracts, CMPs were required to deliver all medically necessary Medicare-covered services in return for a fixed monthly capitation payment from CMS fee-for-service payment from the appropriate state Medicare agency mandatory premium paid by plan enrollees fee equal to twice the actuarial value of the Medicare deductible and coinsurance paid by plan enrollees 3. Social health maintenance organizations (SHMOs) and Programs of AllInclusive Care for the Elderly (PACE) are federal programs designed to provide coordinated healthcare services to the elderly. Unlike PACE, SHMOs are reimbursed solely through Medicaid programs provide extensive long-term care are reimbursed on a fee-for-service basis
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limit benefits to a specified maximum amount 4. Franklin Pitt selected a Medicare+Choice option under which he is covered by a catastrophic health insurance policy with a high annual deductible and a $6,000 out-of-pocket expense maximum. CMS pays the premiums for the insurance policy out of the usual Medicare+Choice payment and deposits any difference between the capitated amount and the policy premium in a savings account. Mr. Pitt can use funds in the savings account to pay qualified medical expenses not covered by his insurance policy. At the end of the benefit year, Mr. Pitt can carry any remaining funds into the next benefit year. The Medicare+Choice option Mr. Pitt selected is known as a coordinate care plan (CCP) medical savings account (MSA) plan competitive medical plan (CMP) Medicare Risk HMO program 5. The BBA of 1997 specifies the ways in which a Medicare+Choice plan can establish and use provider networks. A Medicare+Choice plan that operates as a private fee for service (PFFS) plan is allowed to limit the size of its network to the number of providers necessary to meet the needs of its enrollees require providers to accept as payment in full an amount no greater than 115% of the Medicare payment rate refuse payment to non-network providers who submit claims for Medicare-covered expenses shift all risk for Medicare-covered services to network providers 6. As an authorized Medicare+Choice plan, the Brightwell HMO must satisfy CMS requirements regulating access to covered services. In order to ensure that its network provides adequate access, Brightwell must allow enrollees to determine whether they will receive primary care from a physician, nurse practitioner, or other qualified network provider base a providers participation in the network, reimbursement, and indemnification levels on the providers license or certification define its service area according to community patterns of care require enrollees to obtain prior authorization for all emergency or urgently needed services 7. Dr. Ahmad Shah and Dr. Shantelle Owen provide primary care services to Medicare+Choice enrollees of health plans under the following physician incentive plans: Dr. Shah receives $40 per enrollee per month for providing primary care and an additional $10 per enrollee per month if the cost of referral services falls below a specified level Dr. Owen receives $30 per enrollee per month for providing primary care and an additional $15 per enrollee per month if the cost of referral services falls below a specified level
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The use of a physician incentive plan creates substantial risk for
both Dr. Shah and Dr. Owen Dr. Shah only Dr. Owen only neither Dr. Shah nor Dr. Owen 8. Stop-loss insurance is designed to protect physicians who face substantial financial risk as a result of physician incentive plans. Medicare+Choice health plans must ensure that a physician has adequate stop-loss protection if the physician has a patient panel that exceeds 25,000 patients physician receives a bonus that is based solely on quality of care, patient satisfaction, or physician participation difference between the physicians maximum potential payments and his or her minimum potential payments is less than 25% of the maximum potential payments physician is subject to a withhold that is greater than 25% of his or her potential payments 9. CMS Medicare+Choice regulations include a provision that allows health plans to deny benefits for any services the health plan objects to on moral or religious grounds. The provision that exempts health plans from providing such services is known as a conscience protection exception a hold harmless clause a medical necessity determination an intermediate sanction >---------- End of the Test ----------<
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Reading 7B: Special Considerations for Medicaid Networks
Explain the origin and purpose of the Medicaid program Describe the characteristics of the three major segments of the Medicaid population and the challenges these groups present for health plans Define a safety net provider and explain the role that safety net providers can play in Medicaid managed care Define the two types of Medicaid managed care entities (MCEs)- managed care organizations (MCOs) and primary care case managers (PCCMs) Explain the differences between open contracting and selective contracting Discuss some of the challenges that health plans face in applying managed care strategies to Medicaid Describe the type of information a health plan might include in its response to a Medicaid Request for Proposal (RFP) Explain some of the important considerations in a Medicaid-MCO managed care contract List some of the questions a health plan might ask when credentialing providers for a Medicaid network Discuss the compensation of Medicaid providers, including creative compensation methods that health plans can use
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1. Medicaid is a joint federal and state program that provides healthcare coverage for low-income, medically needy, and disabled individuals. Under the terms of this joint sponsorship, the federal government is responsible for making all claim payments federal government is responsible for determining the basic benefits that must be provided to eligible Medicaid beneficiaries state governments are responsible for setting minimum standards regarding eligibility, benefit coverage, and provider participation and reimbursement state governments are responsible for establishing overall regulation of the Medicaid program 2. Medicaid beneficiaries pose a challenge for health plans attempting to establish Medicaid provider networks. Compared to membership in commercial health plans, Medicaid enrollees typically require access to greater numbers of obstetricians and pediatricians have stronger relationships with primary care providers are less reliant on emergency rooms as a source of first-line care need fewer support and ancillary services 3. Martin Breslin, age 72 and permanently disabled, is classified as duallyeligible. This information indicates that Mr. Breslin qualifies for coverage by both Medicare and private indemnity insurance, and Medicare provides primary coverage Medicare and Medicaid, and Medicare provides primary coverage Medicaid and private indemnity insurance, and Medicaid provides
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primary coverage Medicare and Medicaid, and Medicaid provides primary coverage 4. Since 1981, states have had the option to experiment with new approaches to their Medicaid programs under the freedom of choice waivers. Under one such waiver, a Section 1915(b) waiver, states are allowed to give Medicaid recipients complete freedom in choosing healthcare providers give Medicaid recipients the option to choose not to enroll in a healthcare plan mandate certain categories of Medicaid recipients to enroll in health plans establish demonstration projects to test new approaches for delivering care to Medicaid recipients 5. There are several approaches to providing Medicaid health plan. One such approach involves the use of organizations who contract with the states Medicaid agency to provide primary care as well as administrative services. These organizations are known as enrollment brokers primary care case managers (PCCMs) certified medical assistants (CMAs) prepaid health plans (PHPs) 6. State Medicaid agencies can contract with health plans through open contracting or selective contracting. One advantage of selective contracting is that it allows enrollees to choose from among a greater variety of health plans reduces the competition among health plans increases the ability of new, local plans to participate in Medicaid programs encourages the development of products that offer enhanced benefits and more effective approaches to health plans 7. The Portway Hospital is qualified to receive Medicaid subsidy payments as a disproportionate share hospital (DHS). The DHS payments that Portway receives are made for services rendered to specific patients made with matching state and federal funds included in the Medicaid capitation payment made to patients health plans defined as cost-based reimbursement (CBR) equal to 100% of Portways reasonable costs of providing services to Medicaid recipients >---------- End of the Test ----------<
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Reading 7C: Provider Networks for Workers' Compensation
Explain why a state might want to institute managed workers' compensation Explain why the selection process for workers' comp providers differs from that for other types of networks Describe some of the nonfinancial tools that a health plan can use to manage the performance of its workers' comp providers
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1. Grant Pelham is covered by both a workers compensation program and a group health plan provided by his employer. The Shipwright Health Plan administers both programs. Mr. Grant was injured while on the job and applied for benefits. Mr. Pelhams group health insurance plan and workers compensation both provide benefits to cover expenses incurred as a result of illness or injury. However, unlike traditional group insurance coverage, workers compensation provides reimbursement for lost wages requires employees who suffer a work-related illness or injury to obtain care from specified network providers covers all injuries and illnesses, regardless of their cause requires employees to share the cost of treatment through deductible, coinsurance, and benefit limits 2. Grant Pelham is covered by both a workers compensation program and a group health plan provided by his employer. The Shipwright Health Plan administers both programs. Mr. Grant was injured while on the job and applied for benefits. Because Mr. Pelham was injured on the job, he is entitled to receive benefits through workers compensation. Under the terms of the state-mandated exclusive remedy doctrine included in the workers compensation agreement, Mr. Pelham will most likely be prohibited from receiving workers compensation benefits unless he can show that the employer was at fault for his injury obtaining care from providers who are not members of a workers compensation network suing his employer for additional benefits claiming benefits from both workers compensation and his group health plan 3. Grant Pelham is covered by both a workers compensation program and a group health plan provided by his employer. The Shipwright Health Plan administers both programs. Mr. Grant was injured while on the job and applied for benefits.
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The provider network that Shipwright uses to furnish services for its workers compensation program will most likely emphasize primary care and consist mostly of generalists focus treatment approaches on rapid recovery rather than cost offer workers compensation beneficiaries the same types and levels of treatment that Shipwrights traditional network furnishes to group health plan members exempt participating providers from meeting standard credentialing requirements 4. Health plans can often reduce workers compensation costs by incorporating 24-hour coverage into their workers compensations programs. Twenty-four-hour coverage reduces costs by maximizing the effects of cost shifting eliminating the need for utilization management requiring members to use separate points of entry for job-related and non-job related services combining administrative services for workers compensation and nonworkers compensation healthcare and disability coverage 5. In most states, workers compensation is first-dollar and last-dollar coverage, which means that workers compensation programs can place limits on the benefits they will pay for a given claim can deny coverage for work-related illness or injury if the employer is not at fault must pay 100% of work-related medical and disability expenses can hold employers liable for additional amounts that result from court decisions >---------- End of the Test ----------<
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Assignment 8: Ongoing Management of Provider Networks Reading 8A: Continuing Management of Network Adequacy and Provider Satisfaction
Describe some situations that may indicate a need to review network adequacy List several factors that health plans examine when reassessing access and availability Explain the importance of provider retention Describe several methods that health plans use to provide continuing education to network providers and their staff Explain how direct referral and self-referral programs assist providers with utilization management List some of the issues that a health plan typically addresses through surveys of providers and their staffs Explain why health plans often seek to involve network providers in network management and medical management operations
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1. Before or during the orientation process, health plans generally provide new network providers with a provider manual. One of the primary purposes of the provider manual is to provide a directory of contracted providers help providers and their staffs develop methods of improving the operation of their practices provide feedback to providers regarding their performance reinforce and document contractual provisions 2. The Elizabethan Health Plan uses a direct referral program, which means that PCPs in Elizabethans network can make most referrals without obtaining prior authorization from Elizabethan PCPs in Elizabethans network must always refer plan members to other specialists within the network Elizabethans plan members can bypass the PCP and obtain medical services from a specialist without a referral Elizabethans plan members must obtain referrals directly from Elizabethan 3. The Blanchette Health Plan uses a method of claims submission that allows its providers to submit claims directly to Blanchette through a computer application-to-application exchange of claims using a standard data format. This information indicates that Blanchette allows its providers to submit claims using technology known as telemedicine an electronic referral system electronic data interchange encounter reporting
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4. Dr. Sarah Carmichael is one of several network providers who serve on one of the Apex Health Plans organizational committees. The committee reviews cases against providers identified through complaints and grievances or through clinical monitoring activities. If needed, the committee formulates, approves, and monitors corrective action plans for providers. Although Apex administrators and other employees also serve on the committee, only participating providers have voting rights. The committee that Dr. Carmichael serves on is a utilization management committee peer review committee medical advisory committee credentialing committee >---------- End of the Test ----------<
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Reading 8B: Managing Provider Performance
Explain why health plans measure the performance of network providers Describe how provider profiling is important in performance measurement and performance management Describe the following types of performance measures: Structure Process Outcomes Patient satisfaction Explain how outcomes research and outcomes measurement can be used to benchmark provider performance Describe some of the methods health plans can use to change provider behavior
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1. The Azure Health Plan strives to ensure for its plan members the best possible level of care from its providers. In order to maintain such high standards, Azure uses a variety of quantitative and qualitative (behavioral) measures to determine the effectiveness of its providers. Azure then compares the clinical and operational practices of its providers with those of other providers outside the network, with the goal of identifying and implementing the practices that lead to the best outcomes. Qualitative measures that Azure could use to assess provider performance include an evaluation of how quickly the provider responds to plan members inquiries effectively the provider communicates with plan members often the provider refers plan members for ancillary services many plan members visit the provider per month 2. The Azure Health Plan strives to ensure for its plan members the best possible level of care from its providers. In order to maintain such high standards, Azure uses a variety of quantitative and qualitative (behavioral) measures to determine the effectiveness of its providers. Azure then compares the clinical and operational practices of its providers with those of other providers outside the network, with the goal of identifying and implementing the practices that lead to the best outcomes. The comparative method of evaluation that Azure uses to identify and implement the practices that lead to the best outcomes is known as case mix analysis outcomes research benchmarking provider profiling 3. Dr. Sylvia Cimer and Dr. Andrew Donne are obstetrician/gynecologists who
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participate in the same provider network. Dr. Comer treats a large number of high-risk patients, whereas Dr. Donnes patients are generally healthy and rarely present complications. As a result, Dr. Comer typically uses medical resources at a much higher rate than does Dr. Donne. In order to equitably compare Dr. Comers performance with Dr. Donnes performance, the health plan modified its evaluation to account for differences in the providers patient populations and treatment protocols. The health plan modified Dr. Comers and Dr. Donnes performance data by means of a case mix/severity adjustment an external performance standard structural measures behavior modification 4. The Edgewood Health Plan uses a combination of structural, process, outcomes, and customer satisfaction measures to evaluate its network providers performance. Edgewood would correctly use outcomes measures to evaluate a providers compliance with specific regulatory or accrediting requirement appropriate use of specified procedures patient progress following treatment patient perceptions about how well the provider addresses medical problems 5. Member satisfaction surveys help an health plan determine whether its providers are consistently delivering services to plan members in a manner that lives up to member expectations. Member satisfaction surveys allow the health plan to gather information about a members reaction to services received during a specific encounter the reactions of specific subsets of the health plans membership members positive and negative experience with the plans services all of the above >---------- End of the Test ----------<
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AHM 530 - Tests

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Assignment 1: The Network Management Function Reading 1A: The Role of Network Management in a Health Plan Organization

Reading 1B: Environmental Considerations for Network Management

$56,700 $272,160 $680,400 >---------- End of the Test ----------< 1 2 3 4 5 6 7 A D D D C B C

Reading 2C: Delegation of Network Management Activities

>---------- End of the Test ----------< 1 2 3 C D B

Reading 3B: Collecting and Verifying Data for Credentialing Purposes

>---------- End of the Test ----------<

Reading 4B: The Negotiation Process for Provider Contracting

Reading 5B: Compensation Arrangements Between health plans and Providers

Reading 6C: Pharmacy Networks

Reading 6D: Considerations and Strategies for Specialty Services

The use of a physician incentive plan creates substantial risk for

Reading 7B: Special Considerations for Medicaid Networks

Reading 7C: Provider Networks for Workers' Compensation

Reading 8B: Managing Provider Performance

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