This pack of HSM 340 Week 7 Quiz covers:
Question 1.1. (TCO 7) Employee covered health plans are most likely to be? (Points : 5)Question 2.2. (TCO 7) Capitation plans are more common for physician payment because: (Points : 5)Question 3.3. (TCO 7) The James Clinic is an organization of 100 physicians in a variety of specialties. They recently contracted with Prudential Health Plan on a capitated basis to provide all medical services to Prudential’s members for the next three years. This HMO model would be defined as a: (Points : 5)Question 4.4. (TCO 7) Suppose that AT&T had made an offer to acquire Merck Pharmaceuticals. Ignoring potential antitrust problems, this merger would be classified as a: (Points : 5)Question 5. 5. (TCO 7) An HMO has a Point of Service (POS) option for its members, but will pay only 80 percent of approved charges. If a member goes out of network for a medical procedure with a charge of $2,000, of which $1,200 is approved, how much must the member pay? (Points : 10)Question 6. 6. (TCO 7) A hospital incurs $10 million of cost to treat Medicaid patients and receives $7 million in payment. Actual charges for these Medicaid patients were $20 million. The net community benefit expense that would be reported in Schedule H of IRS Form 990 would be? (Points : 10)Question 7. 7. (TCO 7) How is charity care usually defined? (Points : 10)
Expert Solution Preview
As a medical professor in charge of creating college assignments and answers, I have designed this set of questions based on the topic of healthcare financing and reimbursement. These questions will test the students’ understanding of different types of healthcare plans and payment methods, as well as their ability to calculate net community benefit expense and charity care.
Answer to Question 1.1:
Employee covered health plans are most likely to be group health plans, which are typically sponsored by employers and provide health insurance coverage to a group of employees and their dependents. These plans can be self-funded or fully insured and often offer more comprehensive coverage and lower costs than individual health plans.
Answer to Question 2.2:
Capitation plans are more common for physician payment because they encourage preventive care and cost-effective treatments while reducing unnecessary procedures and tests. Under a capitation plan, physicians receive a fixed amount of payment per patient per month, regardless of the services provided. This incentivizes physicians to focus on keeping patients healthy and avoid costly procedures.
Answer to Question 3.3:
The James Clinic’s contract with Prudential Health Plan on a capitated basis to provide all medical services to Prudential’s members for the next three years would be defined as a staff model HMO. In a staff model HMO, the medical services are provided by physicians and other healthcare professionals who are employed by the HMO or by a medical group that contracts exclusively with the HMO.
Answer to Question 4.4:
If AT&T made an offer to acquire Merck Pharmaceuticals, ignoring potential antitrust problems, this merger would be classified as a vertical merger. A vertical merger is a merger between companies in different stages of the same industry’s supply chain. In this case, AT&T is a telecommunications company, and Merck Pharmaceuticals is a pharmaceutical company.
Answer to Question 5.5:
If a member goes out of network for a medical procedure with a charge of $2,000, of which $1,200 is approved, the member must pay the remaining 20% of the approved charges, which is $240. Therefore, the member must pay $800 ($1,200 – $240) for the procedure.
Answer to Question 6.6:
The net community benefit expense that would be reported in Schedule H of IRS Form 990 would be $3 million. This is calculated as the cost of providing care to Medicaid patients ($10 million) minus the payment received ($7 million), which equals $3 million.
Answer to Question 7.7:
Charity care is usually defined as medical services provided to individuals who are unable to pay for them and who do not qualify for other types of financial assistance, such as Medicaid or insurance. These services are provided as a form of community benefit and are often offered by non-profit hospitals and clinics. The cost of charity care is typically reported on the Schedule H of IRS Form 990.
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