GBA 1 Exam Study Guide | 2024 Questions
& Answers | 100% Correct | Verified
What was the purpose of the Health Maintenance Organization Act of 1973? - ✔✔The health
maintenance organization action of 1973 provided federal initiatives - consisted of federal grants and
loans to organizations wishing to investigate the feasibility of "federally qualified HMO"
How did the passage of the Health Maintenance Organization Act of 1973 affect the growth of HMOs? -
✔✔The government began to withdraw its funding during the Reagan administration. Smaller plans did
not survive.
Briefly explain why the preferred provider organization (PPO) concept was developed? - ✔✔PPO was
sponsored by national insurance companies, third party administrators, BCBS plans, and hotel
organizations. PPO gained quick popularity with employers that wanted cost savings but were unwilling
to reduce provider choice as much that required HMOs
Why didnt many employers realize long-term costs savings with PPO? - ✔✔Because they were primarily
discounted fee-for-service arrangements with little focus on utilization control.
What steps did PPO companies take to correct this problem? - ✔✔Increase the monitoring of utilization,
implementing quality control and surveying member satisfaction.
What do opponents of the PPO approach argue is the reason they are more expensive than HMOs? -
✔✔They argue that PPOs are weak form of managed care with rich benefits, making them more
expensive than HMOs.
Is there a universally accepted and used definition of managed care? - ✔✔There is no specific and
uniformly accepted definition of the term "managed care"
What is the definition of managed care provided in the text to include the broad range of managed
indemnity plans, HMOs, PPOs, and PO plans? - ✔✔Managed care includes those programs intended to
influence and direct the delivery of health care through: 1) plan design failure 2) Restricted access to a
specified group of preselected providers 3) Utilization management programs
, Define the concept of steerage - ✔✔Is the managed care company's way of directing members to in-
network providers. Commonly accomplished through setting benefit differentials between in-and out-of-
network care between 10%-30%. It is critical to maximize financial results of managed care.
Utilization Management (UM) prgrams - ✔✔1) Precertification of inpatient admissions
2)Concurrent review of ongoing confinements for medical necessity
3)Discharge planning
4)Precertification for selected outpatient services
5)Second surgical opinion
6)Case management for high-dollar cases
Incentive design of PPO plan - ✔✔Primary objective was to introduce a managed care plan with the least
amount of employee disruption. It offered members richer preferred benefit while maintaining existing
benefit levels for nonpreferred benefits.
Ex.: 100% for preferred expenses, 80% for standard comprehensive medical plans
Disincentive design of PPO Plan - ✔✔The primary objective was cost savings with preferred benefits
equal to the prior plan and nonpreferred benefits being significantly reduced.
Ex.: 80% preferred expenses. 60% higher deductible.
Combination approach of PPO Plan - ✔✔Some improvement in benefits while at the same time saving
money. Preferred benefits were set at a slightly higher level, for example 90%, and the non preferred
benefits at a lower level, 70%.
What is the key component of the point-of-service plan concept? - ✔✔The primary care physicians (pcp)
is the key component of the POS concept, and preferred benefits are available only for care rendered by
or coordinated through the member PCPs. The PCP acts like a gatekeeper to specialist care. The primary
care generally is family practitioner, general practitioner, internist or pediatrician.
What plan features are often included in POS plan to encourage care within the network through the
PCP? - ✔✔1) No deductible and 100% coverage after a small copay.
& Answers | 100% Correct | Verified
What was the purpose of the Health Maintenance Organization Act of 1973? - ✔✔The health
maintenance organization action of 1973 provided federal initiatives - consisted of federal grants and
loans to organizations wishing to investigate the feasibility of "federally qualified HMO"
How did the passage of the Health Maintenance Organization Act of 1973 affect the growth of HMOs? -
✔✔The government began to withdraw its funding during the Reagan administration. Smaller plans did
not survive.
Briefly explain why the preferred provider organization (PPO) concept was developed? - ✔✔PPO was
sponsored by national insurance companies, third party administrators, BCBS plans, and hotel
organizations. PPO gained quick popularity with employers that wanted cost savings but were unwilling
to reduce provider choice as much that required HMOs
Why didnt many employers realize long-term costs savings with PPO? - ✔✔Because they were primarily
discounted fee-for-service arrangements with little focus on utilization control.
What steps did PPO companies take to correct this problem? - ✔✔Increase the monitoring of utilization,
implementing quality control and surveying member satisfaction.
What do opponents of the PPO approach argue is the reason they are more expensive than HMOs? -
✔✔They argue that PPOs are weak form of managed care with rich benefits, making them more
expensive than HMOs.
Is there a universally accepted and used definition of managed care? - ✔✔There is no specific and
uniformly accepted definition of the term "managed care"
What is the definition of managed care provided in the text to include the broad range of managed
indemnity plans, HMOs, PPOs, and PO plans? - ✔✔Managed care includes those programs intended to
influence and direct the delivery of health care through: 1) plan design failure 2) Restricted access to a
specified group of preselected providers 3) Utilization management programs
, Define the concept of steerage - ✔✔Is the managed care company's way of directing members to in-
network providers. Commonly accomplished through setting benefit differentials between in-and out-of-
network care between 10%-30%. It is critical to maximize financial results of managed care.
Utilization Management (UM) prgrams - ✔✔1) Precertification of inpatient admissions
2)Concurrent review of ongoing confinements for medical necessity
3)Discharge planning
4)Precertification for selected outpatient services
5)Second surgical opinion
6)Case management for high-dollar cases
Incentive design of PPO plan - ✔✔Primary objective was to introduce a managed care plan with the least
amount of employee disruption. It offered members richer preferred benefit while maintaining existing
benefit levels for nonpreferred benefits.
Ex.: 100% for preferred expenses, 80% for standard comprehensive medical plans
Disincentive design of PPO Plan - ✔✔The primary objective was cost savings with preferred benefits
equal to the prior plan and nonpreferred benefits being significantly reduced.
Ex.: 80% preferred expenses. 60% higher deductible.
Combination approach of PPO Plan - ✔✔Some improvement in benefits while at the same time saving
money. Preferred benefits were set at a slightly higher level, for example 90%, and the non preferred
benefits at a lower level, 70%.
What is the key component of the point-of-service plan concept? - ✔✔The primary care physicians (pcp)
is the key component of the POS concept, and preferred benefits are available only for care rendered by
or coordinated through the member PCPs. The PCP acts like a gatekeeper to specialist care. The primary
care generally is family practitioner, general practitioner, internist or pediatrician.
What plan features are often included in POS plan to encourage care within the network through the
PCP? - ✔✔1) No deductible and 100% coverage after a small copay.
