MCOs
HMO
Healthcare maintenance organization
- HMO Act of 1973: promotes development of HMOs which fulfill certain requirements
- subscribers pay annual premium in exchange for access to physicians
- staff model (HMO employs doctors), group model (HMO contracts with doctor group), network model (combination)
- Example: Kaiser Permanente (captive group model)
This federal agency, in addition to other responsibilities, also actively inspects and rates every long-term care facility in the US.
Centers for Medicare & Medicaid Services (CMS)
- agency within Dept of Health and Human Services
- administers Medicare program
- works with states to administer Medicaid, and Children's Health Insurance Program (CHIP)
- responsible for clinical laboratory standards
- oversees Healthcare.gov
HCC
Hierarchical Condition Categories
- risk adjustment model using diagnoses (HCC are linked to ICD10 diagnoses) and demographic data
- CMS-HHS applies to Medicare Advantage population
- HSS-HCC applies to commercial population and Medicaid (HSS = Dept of Health and Human Services)
- "Hierarchical" because more complex diagnoses incorporate simpler ones
e.g. HCC 38 = Diabetes with Glycemic, Unspecified, or No Complications
https://hiacode.com/blog/hierarchical-condition-categories-model-v28
IPA
Independent Practice Association
- group of physicians (single or multi-specialty) and other providers (e.g. social services) that contract with managed care organizations
- most often paid via capitation
- can share services e.g. payroll, compliance, marketing
- example: AAMG which contracts with Aetna, Blue Cross, SFHP...
This program was enacted in 1965 and covers about 65 million Americans.
Medicare
- Originally had two parts: A (inpatient) and B (outpatient)
- In 1980s, part C was added
- in 2006, part D (self-administered drugs) was added
- Provides health insurance for those aged 65 or older, and younger individuals with certain disabilities
RAF
Risk adjustment factor
- HCCs + demographics are used in a model to calculate RAF
- Average RAF is 1. Greater than 1 is higher risk, less than 1 is lower risk
- RAF is used to adjust the amount a provider is paid for taking care of a patient
E.g. Most large Medicare Advantage insurers have been accused to over-diagnosing/fraud.
https://www.nytimes.com/2022/10/08/upshot/medicare-advantage-fraud-allegations.html
PPO
Preferred Provider Organization
- group of doctors and facilities who contract with insurance company
- patients pay membership fee to insurance
- insurance pays "access fee" to PPO
- PPO providers charge lower rates for plan members
- similar to HMO but no gatekeeper PCP
This program, also known as Medicare Part C, covers about half of all Medicare beneficiaries.
Medicare Advantage
- Rules set by 1985
- Medicare pays a Medicare Advantage plan a fee to cover the healthcare expenses of enrollees
- Medicare Advantage plans must cover equivalent of Part A (inpatient) and Part B (outpatient). Many also cover part D (prescription drugs)
- Most plans are HMO or PPO
- Covers about half of Medicare beneficiaries
- Example: Anthem MediBlue
CRG
Clinical Risk Group
- risk adjustment model (made by 3M?)
- similar to HCC, but used by commercial payers and state agencies to estimate risk based on patient's diagnoses and interactions with healthcare system
ACO
Accountable care organization
- A group of health care practitioners who assume responsibility for quality, cost, and overall care of traditional Medicare beneficiaries.
- Guidelines established in 2011 under Affordable Care Act
- Includes physicians, hospitals, post-acute care
- Accountable for at least 5000 beneficiaries
- Actual costs are compared to a benchmark (estimated cost if there were no ACO); ACO then shares part of the savings (or losses)
- Example: Hills Physicians + Dignity Health + Blue Shield of CA formed ACO to cover 41k retirees
This program provides health coverage to about 40% of Californians.
Medi-Cal
- state implementation of federal Medicaid program, established in 1965
- covers adults and children with limited income/resources
- 14% enrolled in fee-for-service, 86% in contracted managed care organizations
MIPS
Merit-based Incentive Payment System
- payment adjustments on Medicare services based on performance metrics
- one of two tracks of QPP (Quality Payment Program) established in 2017
- 4 categories of metrics: Quality, Promoting Interoperability, Improvement Activities, and Cost
- Score translates to adjustment ranging from -9% to 9% (subject to budget neutrality)
e.g. "Percentage of patients 18-75 yo with diabetes who had Hgb A1c > 9.0% during measurement period"
UM
Utilization Management
- managed care techniques used by payers to reduce costs by assessing appropriateness before paying
- criteria may be in-house or external
- e.g. prior authorizations, retrospective denials
This type of insurance covers co-pays and other healthcare costs not covered by Medicare.
Medigap (also known as Medicare Supplement Health Insurance)
- subject to federal/state laws
- different types of plans standardized by CMS
- prices can vary from around $100 to $500/month
- 14 million enrollees as of 2018
Example: Anthem Medicare Supplement Plans (A, F, G, and N)
PMPM
Per-member-per-month
- the capitation a provider is paid per-patient-per month
- risk factors and performance (quality metrics) can increase or decrease this amount
E.g. Anthem in 2020 gave $3 PMPM for maximum performance in quality measures. Assuming panel 1000 patients for 12 months, additional incentive pay would be 1000 x 12 x $3 = $36,000
https://providers.anthem.com/docs/gpp/IN_CAID_COVID19_PQIPEssentials2020.pdf?v=202207202312