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15 Cards in this Set

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Kong 69
State Regulation of Managed Care (pp. 1322-1341)
Blank
THE STATE REGULATORY PROCESS
MCO Activities regulated by the State:
Licensing
Information for Enrollees (Disclosure)
Access to Medical Services
Provider Issues
Annual Reports / Premium Rate Filings
Quality Assurance (QA) and Utilization Review (UR)
Grievance Procedures
External Appeals allowed on denial of coverage
Solvency Standards; Insolvency Protections
Financial Audits & Site Visits by regulators
Utilization Review Organizations (URO’s) are regulated.
Licensing
Company must submit:
 sample contracts (with providers, with er groups)
 financial statements
 sound financial plan
 description of the service area
 patient grievance procedure
 corporate by-laws
Information for Enrollees (Disclosure)
 Eligibility reqs
 benefits
 out-of-pocket expenses
 limitations and exclusions
 grievance procedures
 right to continue/convert
 The “Evidence Of Coverage” document (describes essential features)
Access to Medical Services
 during reasonable hours
 Emergency care 24 hours.
Provider Issues
 credentialing
 provider incentives — not too much incentive to deny care
 “Hold Harmless Clause”
Annual Reports / Premium Rate Filings
 premiums not excessive or inadequate
 community rating
Quality Assurance (QA) and Utilization Review (UR)
 written procedures of how they’re done
 including peer review and clinical evidence
Grievance Procedures
 written procedures req’d
 two-level system, including face-to-face hearing.
External Appeals allowed on denial of coverage
blank
Solvency Standards; Insolvency Protections
 Reserve requirements
 RBC requirements, reflecting:
 affiliate risk
 asset risk
 underwriting risk
 credit risk
 business risk
 Minimum net worth of $1.5 million
 Reinsurance req’d
 insolvency protection req’d
HIPAA - requires:
 Access for indivs / small groups
 Portability
 renewability
 limits on pre-ex condition exclusions
 nondiscrimination
POS and PPO offerings
 MCO must cover POS costs through external ins cpy (wrap-around)
 Or, not have >20% of costs from out-of-network.
 Must measure in-network vs. o-o-n.
OTHER LAWS GOVERNING MANAGED CARE
 “Any Willing Provider”
 Access to specialty care
 “Direct Access” (especially for OB/GYNS)
 “Flexible Gatekeeper”
 Drug Formularies — must be disclosed
 Physician Antitrust exemptions — phys’s can jointly negotiate
 State-mandated benefits
PROBLEMS WITH RIGOROUS STATE REGULATIONS
 Vulnerability to malpractice lawsuits
 MCO’s and providers will order “defensive utilization.”
 unnecessary testing. Increases costs.

 Solution: limit malpractice liability.