Features of Private Payer and Consumer-Driven Health Plans
Features of Private Payer and Consumer-Driven Health Plans When it comes to health care plans there are government-sponsored programs and then there are private payer plans which consist of Preferred Provider Organizations (PPO), Health Maintenance Organizations (HMO), group Health Maintenance Organizations, Independent Practice Association Model (IPA), Point-of-Service Plans (POS), Indemnity Plans, and Consumer-Driven Health Plans (CDHP). When choosing a health-care plan it is important to research the basic definitions, what types of services are covered, and payment requirements (Axia College. 009. Week One Supplement Chapter 9). One of the most popular health care plans is the PPO which offers a discounted fee-for-service program which means specific providers get paid based on their discounted services. This type of plan requires a patient to pay an annual premium rate and deductible and can consist of either a low deductible, high premium or a high deductible, low premium. Patients must pay a copayment at the time of medical treatment and must be seen by a physician on this network’s list or pay a higher price for service (Axia College. 2009. Week One Supplement Chapter 9).
An HMO is licensed by the state and has lower costs because it consists of more regulated guidelines for their limited list of providers. Patients must be treated by physicians that are listed under their network to be covered. This plan charges annual premiums and copayments for each visit but there is no deductible that is required. This is called “first-dollar coverage” and patients do not have an out-of-pocket cost (Axia College. 2009. Week One Supplement Chapter 9). A group HMO is very similar to an HMO except that it has contracts with more than one group of physicians.
Medical facilities are paid by a per member per month (PMPM) rate for each patient they treat. Certain services may be hired out as needed and a flat fee is charged for services of any particular treatment (Axia College. 2009. Week One Supplement Chapter 9). An IPA is a type of HMO in which specific physicians with privately owned practices group together under contract to treat patients. This plan pays for services through negotiated fees directly to the IPA and the IPA pays the physicians (Axia College. 2009.
Week One Supplement Chapter 9). A POS plan is a combination of a PPO and an HMO. Patients can choose from providers on either network, they are charged an annual rate and must also provide a copayment at the time of visit. Monthly rates are usually higher but there is a broader selection for services (Axia College. 2009. Week One Supplement Chapter 9). Indemnity plans require that the patient pay a premium, a deductible, and coinsurance payments and the deductibles are usually a little higher so that the premiums are little less expensive.
This plan usually covers 70 to 80 percent of costs once the deductibles are met (Axia College. 2009. Week One Supplement Chapter 9). A CDHP has two specific parts: a high-deductable health plan and a savings account that is tax-preferred that the patient controls. These plans work hand-in-hand in that the health plan covers disastrous events and the savings account covers any other out-of-pocket costs and expenses. This type of plan was designed in hopes that the patient will manage their healthcare services efficiently and make responsible choices (Axia College. 009. Week One Supplement Chapter 9). An HRA is an account that is set by the employer and used it addition to a medical plan. The employee can take funds from this account to pay eligible medical expenses that are not covered by their plan and unused funds rollover to the next year (Select Account, 2005). A flexible savings account is similar to the HRA in that pretax dollars go into an account to pay for eligible medical expenses such as copayments and deductibles.
Employers can contribute to this account and it is set up so that unused funds are lost if not used during the annual time and they do not rollover to the next year (Flexible Spending Accounts, 2009). References Axia College. (2009). Claims Preparation II: Footing the Bill. Retrieved from HCR/230-Claims Preparation II course website. FlexibleSpendingAccounts. (2009). Flexible Spending Accounts. Retrieved October 10, 2010, from http://www. flexiblespendingaccountsonline. com. SelectAccount. (2005). Health Reimbursement Account. Retrieved October 10, 2010, from http://www. selectaccount. com.
