Managed Care and Insurance Operations Flashcards

What is a Health Maintenance Organization (HMO)?

Answer: A managed care plan requiring members to use network providers and a primary care physician gatekeeper

HMOs require members to select a primary care physician and use network providers, with the PCP acting as a gatekeeper for specialist referrals.

What does 'capitation' mean in managed care?

Answer: A fixed monthly payment per enrolled member regardless of services used

Capitation is a payment model where providers receive a fixed per-member-per-month payment regardless of how many services are actually provided.

What is a Preferred Provider Organization (PPO)?

Answer: A managed care plan that allows members to use out-of-network providers at a higher cost

PPOs allow members to visit any provider but offer lower cost-sharing when using in-network (preferred) providers, making out-of-network care available at higher out-of-pocket cost.

What is the primary purpose of a Utilization Review (UR) process?

Answer: To assess the medical necessity and appropriateness of healthcare services

Utilization review evaluates whether healthcare services are medically necessary, appropriate, and delivered in the most cost-effective setting.

Which term describes the process by which a patient must obtain permission from their insurance plan before receiving certain services?

Answer: Prior authorization

Prior authorization (preauthorization) requires patients or providers to get approval from the insurance plan before certain services or medications are provided.

What is a 'deductible' in health insurance?

Answer: The amount a patient must pay out-of-pocket before insurance begins covering costs

A deductible is the amount a member must pay for covered services before the insurance plan begins to pay its share.

What does 'coordination of benefits' (COB) mean in health insurance?

Answer: A process to determine which insurance plan pays first when a patient has multiple coverages

Coordination of benefits is the process used to determine the order in which multiple insurance plans will pay claims when a patient is covered by more than one plan.