Health Reimbursement Accounts and Health Savings accounts Essay


Chapter 5

  1. Discuss the differences between second-party payment and third-party payment. What led to the creation of the third-party payment system?

-Third-party payment is when payers are agents of the patient who contract with providers to pay all or a part of the patients bill.


– Second-party payment is the providers and created ethical and bad-debt concerns.



  1. Which groups were considered the first managed care organizations? How does one distinguish a managed care organization (MCO), a preferred provider organization (PPO), and a health maintenance organization (HMO)?Health Reimbursement Accounts and Health Savings accounts Essay


– The first managed care organizations are Baylor, Blue Cross, and Kaiser.

– MCO is an organization that manages the cost of healthcare, the quality of healthcare, and the access to healthcare.

– PPO provides discounted provider services to insurance carriers and employers.

– HMO integrates the financing and delivery of healthcare into one organization.


  1. Why did employers prefer managed care organizations? How have MCOs changed over the years?


MCO’s attempted to control costs with primary care providers, deductibles, co-pays, and networks. MCO’s have changed over the years under the legal challenges and consumer demands for more freedom of choice.



  1. What are some of the differences between open-panel and closed-panel HMOs?

– Open-panel HMOs are contracts with physicians to provide care for enrollees in the physicians’ offices

– Closed-panel HMOs are contracts with or employs physicians to provide care for enrollees on an exclusive basis. Health Reimbursement Accounts and Health Savings accounts Essay


  1. What are the benefits to the employer using a defined-contribution plan?

– Employees typically choose from a variety of healthcare options, with a specified amount of the premium paid for by the employer.


  1. How would you describe the two models of consumer-driven plans: spending account models and tiered models?

– Spending account models are health reimbursement accounts and health savings accounts. There is a High0deductible PPO plan is applied once health reimbursement accounts are depleted.

– Tiered models are amounts of deductible and coinsurance, with commensurate adjustments to the amount of premiums paid by the consumer.




  1. What are the different forms of payment to providers?

– charges: the amount patients are expected to pay for services

-cost plus a percentage for growth: the cost for care provided to the patients of third-party players, plus a small percentage that allows the organization to develop new service and products.

-per diem: a per-day reimbursement for care provided to the patients of third-party payers

-per-diagnosis: a flat fee for each given diagnosis, regardless of the actual service provided

-capitation: a fixed amount of money each month for every person enrolled in the plan, regardless of whether a given person receives care

-Bad-debt: the patient can but is unwilling to pay based on the hospital’s collection policy.

Charity care: provided to patients who the organization knowns cannot pay for the care.


  1. Why do organizations choose to shift costs to other payers?

– Organizations shift costs to other payers to offset losses from other payers. Health Reimbursement Accounts and Health Savings accounts Essay

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