HSM420 Course Discussions Week 2


HSM420 Course Discussions Week 2
small town insured individuals complain about having to drive many miles to receive care…

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HSM420 Course Discussions Week 2

HSM420 Course Discussions Week 2

All Students Posts – 63 Pages

Provider Networks – 31 Pages

Why do managed care organizations seek to establish a provider network? What are the primary reasons for contracting with providers?  Can an MCO survive without a provider network?

In a small town, how large can the provider network be?  It is often stated that the small town insured individuals complain about having to drive many miles to receive care. What is the average mileage an individual has to drive to receive care?  In many areas, patients have to travel 30 miles or more to receive basic care.  What can MCOs do to entice providers to practice in such areas?  You stated that purpose of managed care is to provide health care services.  To whom are these services to be provided?  Healthcare should be regarded as a right; however, it is being managed as a privilege.  Managed care was to make healthcare affordable, but unfortunately, the premiums continue to rise.  How are we to receive what is a right if we are unable to afford it? With knowing that an MCO cannot survive without a provider network, does this make the providers the authority?  Are they able to dictate reimbursement rates?  Since MCOs control costs, do providers feel the need to avoid certain testing or services to ensure that they remain compliant with the MCO?  Are providers foregoing quality care for compliance?  With an MCO, who benefits more a provider network or the patients?

Although it may be possible for a MCO to survive without a provider network, it is extremely difficult. Because there are many benefits to the MCO that come from establishing provider networks, MCOs without networks end up working much harder to remain viable. “Managed health care plans such as PPOs and HMOs are dependent on their networks to deliver medical care to their subscribers; even closed-panel HMOs depend to some degree on a network of private physicians and hospitals.”

If the MCO does not have an established network, there is no guarantee that their member will be treated by any providers. Not only can access to care be limited for members in MCOs without networks, when they do find a provider to treat them it could come at a must higher cost. One of the benefits of provider networks is that prices are reduced, and the payer never pays full price for services. If there is a higher cost to the payer, there will be a higher cost to the members. Members will probably not be happy to pay higher prices and premiums, so they will likely seek out a new insurance company. Eventually, this will result it losses for the MCO, and as stated earlier, it will be extremely difficult to remain viable. With higher costs, no guarantee of access to care for members, potential loss of members, and lower profits, it does not make sense for a MCO to choose not to have an established provider network. Although possible, it is not really probable because of all of the extra problems that come along with being without a network…

Legal Issues in Provider Contracting – 32 Pages

Describe and discuss the key issues associated with provider payment that should be addressed in any managed care contract.  The way that providers are reimbursed has been simplified.  Why are some providers having issues with receiving payment?

This form of reimbursement seems to be simple enough.  However, how are services administered outside of the bundle requirements paid?  Are providers allowed to bill additional services?  Overbilling/fraudulent billing is one of the major contributors to our healthcare deficit.  What more can be done to prevent such acts?  What is the grace period for errors?  Are providers being penalized for these errors?  Can you tell us what prompted the implementation of the ICD-10 codes?  Do you think that we should revert back to more of an indemnity environment?  Should we allow providers to determine pricing?  What are some examples of medical records being compromised?  What are the consequences?  What are more incentives that can be offered to encourage individuals to seek preventative care?

Under a competitive bidding system, hospitals might submit bids in advance indicating the payment they would accept for each type of episode. CMS could then exclude high bidders from Medicare or use an average of the bids to set its payment rate. In theory, bidding systems can quickly reveal the costs that efficient providers incur. In practice, however, providers that are not already integrated to deliver the full spectrum of patients’ care during an episode might have trouble determining an appropriate bid. As experience with bundled payments grew, those challenges could become more manageable; thus, one option might be for the payment-setting mechanism to evolve over time from administered pricing to competitive bidding. Even then, however, many hospitals and some medical specialists might not have strong incentives to bid their true costs, partly because of limited competition in their markets.

Method of Payment. The concept behind bundling payments is generally to make a fixed payment per bundle, so that providers collectively bear all of the excess costs if total spending exceeds the fixed payment and get to keep all of the savings if their costs are lower than that payment. One way to implement that approach would be to make a single, prospective payment to one individual or organization—such as the hospital responsible for the initial admission—and require that recipient to arrange payments to other providers delivering the care covered by the bundle. For bundles that applied only to services provided during a hospital stay (including physicians’ services), that approach would seem relatively easy to administer; it is the payment method that CMS adopted for Model 4 of its current demonstration. For bundles that included services provided after discharge from a hospital, however, a single prospective payment to the hospital could prove complex to administer: The hospital would need to have payment arrangements with—and oversee—all of the various providers that might be involved in delivering care after a patient was discharged…

HSM420 Course Discussions Week 2