Chapter 8: Financing Health Care

Balanced Budget Act of 1997 (BBA)
This act took important incremental steps to extending healthcare to uninsured children through a $16 billion allocation for a new Children’s Health Insurance Program (SCHIP). It also proposed to reduce growth in Medicare and Medicaid spending by $125.2 billon in 5 years.
Bundled payment for care initiatives (BPCI)
This initiative recognizes that separate Medicare fee-for service payments for individual services provided during a beneficiary’s single illness often result in fragmented care with minimal co-cordination across providers and settings and results in rewarding service quantity rather than quality.
Community-rated insurance
Insurance plans in which all individuals in a defined group pay premiums without regard to age, gender, occupation, or health status. Community rating helped ensure nondiscrimination against groups with varying risk characteristics to provide coverage at reasonable rates for the community as a whole.
Consumer-Driven Health Plan (CDHP)
Developed in a reaction to the managed care backlash, the goals of those plans were to have employees take more responsibility for the healthcare decisions and exercise more cost consciousness.
Department of Health and Human Services (DHHS)
The federal government’s principal agency concerned with the health protection and promotion and provision of health and other human services to vulnerable populations.
Disease Management Programs
MCO programs that attempt to control costs and improve care quality for individuals with chronic and costly conditions through methods such as the use of evidence-based clinical guidelines, patient self-management education, disease registries, risk stratification, proactive patient outreach, and performance feedback to providers.
Emergency Medical Treatment and Labor Act (EMTALA)
This act requires hospitals to treat everyone who presents in their emergency departments, regardless of ability to pay. Stiff financial penalties, and as a risk of Medicare decertification by hospitals inappropriately transferring patients, accompanies the EMTALA legal provisions.
Experience-related insurance
Insurance plans in which insurance on historically documented patterns of healthcare service utilization for defined populations of subscribers to determine premium charges.
Financial risk-sharing
A concept used by MCOs to transfer some measure of financial risk from insurers to beneficiaries. Such transfers of financial risk to beneficiaries commonly take form the form of copayments and deductibles.
Healthcare Effectiveness Data and Information Set (HEDIS)
Provides a standardized method for MCOs to collect, calculated, and report information about their performance to allow employers, other purchasers, and consumers to compare different health insurance plans.
HMO Act of 1973
Federal legislation enacted by the Nixon administration that provided loans and grants for the planning, development, and implementation of combined insurance and healthcare delivery organizations and required that a comprehensive array of preventative and primary care services be included in the HMO arrangement.
Indemnity insurance
A form of insurance in which the insurance company sets allowable charges for services that it will reimburse after the services are delivered and allows providers to bill patients for any uncovered excess costs.
Independent Payment Advisory Board (IPAB)
Created by the ACA. The mission of this entity is to recommend policies to Congress to curb Medicare spending including suggestions to improve coordination of care, eliminate waste, encourage best practices, and prioritize primary care.
National Committee on Quality Assurance (NCQ)
Primary functions of this entity are accredation for MCOs, PPOs, managed behavioral healthcare organizations, new health plans, and disease management programs; certifying organizations that verify provider credentials and consultations on physician organizations, utilization management organizations, patient-centered medical homes, and disease management organizations and programs.
Self-funded health insurance
A mechanism through which, the employer (or other group, such as a union or trade association) collects premiums and pools these into a fund or account that it uses to pay for medical benefit claims instead of using a commercial carrier