ECON 530 EXAM 2 QUESTIONS AND ANSWERS
Centers for Medicare & Medicaid Services (CMS) - CORRECT ANSWER✅✅the largest public health
insurer; operates public health insurance schemes that are financed primarily by government taxes
sets the reimbursement rates for drugs and medical devices, as well as prospective payment rates for
the programs that they operate. reimbursement rates for private payers are often based on these rates
and typically are now lower than this
includes Medicare, Medicaid, & CHIP
Medicare - CORRECT ANSWER✅✅the largest single payor in the U.S.
provides healthcare for those aged 65 and older regardless of their income and medical history, those
with permanent disabilities, and those with end-stage renal disease
Medicaid - CORRECT ANSWER✅✅provides coverage for individuals below the poverty level and to
those who cannot afford to pay for healthcare given their eligibility
jointly funded by federal and state government
Children's Health Insurance Program (CHIP) - CORRECT ANSWER✅✅a national health insurance
program for children under 18 years of age who are not eligible for other insurance plans
private financing sources - CORRECT ANSWER✅✅private health insurance plans and out-of-pocket
payments by individuals who are not insured via a public or private plan
Diagnostic Related Group (DRG) - CORRECT ANSWER✅✅widely used by CMS and many private payor as
a payment scheme for hospitals
these payments cover accommodation costs in a hospital, procedure costs, support staff, and
drug/medical device services
,does not cover physician fees
most inpatient drugs are reimbursed
Ambulatory Payment Classification (APC) - CORRECT ANSWER✅✅some expensive or innovative
outpatient drugs are reimbursed this way
Health Maintenance Organization (HMO) - CORRECT ANSWER✅✅this plan will provide both health
insurance and healthcare services to their enrollees, however, individuals are restricted to healthcare
services and providers only within their network
Preferred Provider Organization (PPO) - CORRECT ANSWER✅✅this plan contracts with specific
healthcare providers, restricting access to only those contracted physicians. enrollees with this plan
have the option to be treated by non-contracted providers, but would need to pay significantly more
out-of-pocket since the provider is considered out-of-network
fee-for-service (FFS) - CORRECT ANSWER✅✅physicians who are self-employed are reimbursed this
way. if the patient is covered, the price of service is based on the physician fee schedule
Patient Protection and Affordable Care Act (PPACA) - CORRECT ANSWER✅✅allowed for greater access
to healthcare, particularly among the uninsured. this bill aims to change the US healthcare system
intonations system with almost universal access to health insurance
makes it mandatory for most employers to provide health insurance coverage for full-time employees,
otherwise they face financial penalties. citizens who are not enrolled in health insurance also pay a
penalty
this law expands eligibility for Medicaid and allows people who do not have any insurance, or who could
not afford insurance previously, to be able to buy tax-payer subsidized coverage
it also makes it illegal for insurance companies to refuse coverage to people with pre-existing medical
conditions or to stop coverage when they become ill
, Department of Health and Human Services (HHS) - CORRECT ANSWER✅✅responsible for protecting the
health and providing essential human services for all Americans
Food and Drug Administration (FDA) - CORRECT ANSWER✅✅a regulatory body responsible for
approving and registering pharmaceutical drugs and medical products in the US, as well as monitor
safety and efficacy while on the market
Center for Drug Evaluation and Research (CDER) - CORRECT ANSWER✅✅the division within the FDA
that regulates over-the-counter and prescription drugs, including biological therapeutics and generic
drugs
Agency for Healthcare Research and Quality (AHRQ) - CORRECT ANSWER✅✅responsible for supporting
research designed to improve the quality of healthcare, reduce its costs, address patient safety and
medical errors, and broaden access to essential services
Pharmacy and Therapeutics (P&T) Committee - CORRECT ANSWER✅✅develops and manages the
formulary system used in many different settings. acts as the liaison between pharmacy and medical
staff in terms of choosing therapies that are effective, safe, and cost-effective for their particular facility
or insurance plans
Private Insurers - CORRECT ANSWER✅✅the key operators that make purchasing, coverage, and
payment decisions regarding healthcare services
Managed Care Organization (MCO) - CORRECT ANSWER✅✅operationalize health insurance for their
enrollees by providing a complete healthcare delivery system consisting of affiliated and/or owed
hospitals, physicians, and other providers who provide a wide range of coordinated health services
includes HMOs and PPOs
Pharmacy Benefit Manager (PBM) - CORRECT ANSWER✅✅design, implement, and manage pharmacy
benefits and coverage. payers (MCOs) often partner up with these and let the latter manage pharmacy-
related responsibilities
Centers for Medicare & Medicaid Services (CMS) - CORRECT ANSWER✅✅the largest public health
insurer; operates public health insurance schemes that are financed primarily by government taxes
sets the reimbursement rates for drugs and medical devices, as well as prospective payment rates for
the programs that they operate. reimbursement rates for private payers are often based on these rates
and typically are now lower than this
includes Medicare, Medicaid, & CHIP
Medicare - CORRECT ANSWER✅✅the largest single payor in the U.S.
provides healthcare for those aged 65 and older regardless of their income and medical history, those
with permanent disabilities, and those with end-stage renal disease
Medicaid - CORRECT ANSWER✅✅provides coverage for individuals below the poverty level and to
those who cannot afford to pay for healthcare given their eligibility
jointly funded by federal and state government
Children's Health Insurance Program (CHIP) - CORRECT ANSWER✅✅a national health insurance
program for children under 18 years of age who are not eligible for other insurance plans
private financing sources - CORRECT ANSWER✅✅private health insurance plans and out-of-pocket
payments by individuals who are not insured via a public or private plan
Diagnostic Related Group (DRG) - CORRECT ANSWER✅✅widely used by CMS and many private payor as
a payment scheme for hospitals
these payments cover accommodation costs in a hospital, procedure costs, support staff, and
drug/medical device services
,does not cover physician fees
most inpatient drugs are reimbursed
Ambulatory Payment Classification (APC) - CORRECT ANSWER✅✅some expensive or innovative
outpatient drugs are reimbursed this way
Health Maintenance Organization (HMO) - CORRECT ANSWER✅✅this plan will provide both health
insurance and healthcare services to their enrollees, however, individuals are restricted to healthcare
services and providers only within their network
Preferred Provider Organization (PPO) - CORRECT ANSWER✅✅this plan contracts with specific
healthcare providers, restricting access to only those contracted physicians. enrollees with this plan
have the option to be treated by non-contracted providers, but would need to pay significantly more
out-of-pocket since the provider is considered out-of-network
fee-for-service (FFS) - CORRECT ANSWER✅✅physicians who are self-employed are reimbursed this
way. if the patient is covered, the price of service is based on the physician fee schedule
Patient Protection and Affordable Care Act (PPACA) - CORRECT ANSWER✅✅allowed for greater access
to healthcare, particularly among the uninsured. this bill aims to change the US healthcare system
intonations system with almost universal access to health insurance
makes it mandatory for most employers to provide health insurance coverage for full-time employees,
otherwise they face financial penalties. citizens who are not enrolled in health insurance also pay a
penalty
this law expands eligibility for Medicaid and allows people who do not have any insurance, or who could
not afford insurance previously, to be able to buy tax-payer subsidized coverage
it also makes it illegal for insurance companies to refuse coverage to people with pre-existing medical
conditions or to stop coverage when they become ill
, Department of Health and Human Services (HHS) - CORRECT ANSWER✅✅responsible for protecting the
health and providing essential human services for all Americans
Food and Drug Administration (FDA) - CORRECT ANSWER✅✅a regulatory body responsible for
approving and registering pharmaceutical drugs and medical products in the US, as well as monitor
safety and efficacy while on the market
Center for Drug Evaluation and Research (CDER) - CORRECT ANSWER✅✅the division within the FDA
that regulates over-the-counter and prescription drugs, including biological therapeutics and generic
drugs
Agency for Healthcare Research and Quality (AHRQ) - CORRECT ANSWER✅✅responsible for supporting
research designed to improve the quality of healthcare, reduce its costs, address patient safety and
medical errors, and broaden access to essential services
Pharmacy and Therapeutics (P&T) Committee - CORRECT ANSWER✅✅develops and manages the
formulary system used in many different settings. acts as the liaison between pharmacy and medical
staff in terms of choosing therapies that are effective, safe, and cost-effective for their particular facility
or insurance plans
Private Insurers - CORRECT ANSWER✅✅the key operators that make purchasing, coverage, and
payment decisions regarding healthcare services
Managed Care Organization (MCO) - CORRECT ANSWER✅✅operationalize health insurance for their
enrollees by providing a complete healthcare delivery system consisting of affiliated and/or owed
hospitals, physicians, and other providers who provide a wide range of coordinated health services
includes HMOs and PPOs
Pharmacy Benefit Manager (PBM) - CORRECT ANSWER✅✅design, implement, and manage pharmacy
benefits and coverage. payers (MCOs) often partner up with these and let the latter manage pharmacy-
related responsibilities
