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Econ Exam 2

  1. Risk Management Problems
    • Incentive to creat loss
    • Supplier-induced demand
    • Moral hazard
  2. Group Policies
    primary tool for managing risk of adverse selection and administration costs
  3. Coverage limitation
    • anual cost limit
    • life time cost limit
  4. Insurable Hazards
    • Probability in a population can be estimated
    • irregular event
    • loss must be accidental
    • substantial loss
    • measurable loss
    • insurable interest
  5. copay
    fixed $ for specific produc or service
  6. Co-insurance
    percentage of service paid for by consumer
  7. Deductible
    annual amount paid by consumer before insurer pays expenses
  8. Self insured employer
    • employer assumes financial risk of loss
    • large reserves held by employer instead of managed care org
    • actuarial and admin services provided by MCO, PBM...
  9. Private Health Insurace
    administered by MCO
  10. Conventional
    • Indemnity or FFS
    • Pt is reimbursed for 80% of what they spend
    • reimburses on a fee for servis basis
  11. Prescription coverage an insurable hazard?
    • no substantial loss
    • not used for accident (maintenance meds)
    • high admin costs
  12. Types of private health insurance
    • conventional
    • HMO
    • PPO
    • POS
    • High deductible/savings option
  13. actuarial analysis
    statistical estimate of income needed to cover expenses
  14. Components of actuarial analysis
    • cost for each service type
    • utilization rate
    • administrative expenses
  15. Administratice expenses
    • sales costs
    • operating costs
    • financial reserves to cover future loss
    • profits
    • wellness programs
  16. MLR
    % of premium income used to cover healthcare expenses
  17. Pharmacy Benefit Manager
    • process claims
    • benefit design
    • formulary development
    • PA & DUR
    • contract with manufacturer
    • pharmacy networks
    • cost minimization analysis
    • own or contract w/ specialty pharmacy
  18. Pharmacy Reimbursement
    Ingredient cost (EAC) + Dispensing Fee (COD) - Patient cost sharing
  19. Estimated acquisition cost
    • based on price benchmark (AWP or WAC)
    • usually 70-80% of Rx cost
  20. GM
    gross margin = ingredient cost reimbursement-AAC
  21. AAC
    • Actual cost of goods
    • purchaser specific
    • not a benchmark
    • anti-competitive
  22. AWP
    subject to manipulation
  23. WAC
    • manufacturer list price to wholesalers
    • used to calculate AWP
    • Closer to AAC than AWP
  24. AMP
    • avg mfg price paid by wholesalers to retail
    • calculated by CMS
    • Includes discounts
    • retrospective
  25. ASP
    • CNS calculation for part B drugs
    • includes most discounts
    • retrospective
    • not tied to NDC (only helpful to CMS)
  26. FUL
    • Federal upper limit
    • CMS calculation
    • maximum medicaid can pay for multi-source drugs.
    • FUL=175% x AMP
    • Retrospective
    • limited to multisource products
  27. MAC
    • Max allowable cost
    • PBMs and MCOs have their own lists
    • mostly for generics
  28. Benchmarc choice and calculation
    crucial to pharmacy income
  29. Reimbursement Payment
    • covers AAC, dispensing fee and profit margin
    • not > u & c
  30. Most reimburse the lower of:
    • EAC+COD
    • MAC+COD
    • U&C
  31. U&C
    cost in area to dispense
  32. Dispensing Fee
    • fixed amout paid to pharmacy
    • target for cost controls
    • likely lower than actuall dispensing costs
  33. PPACA
    • Patient protection and affordable care act
    • tools to manage risks are taken away
  34. PPACA 2010
    authorize biosimilars and grant manufacturers 12 ears of exclusivity
  35. PPACA 2011
    Impose new annual fees on the pharmaceutical manufacturers
  36. PPACA 2010-14
    • require minimum coverage w/o cost sharing for preventative services
    • provid tax credits to small employers that provide HI
    • temporary program covering retirees > 55
Author
Rx2013
ID
42022
Card Set
Econ Exam 2
Description
Private Health Insurance
Updated

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