Chapter 22Managed Care&National Health InsuranceLear

Chapter 22
Managed Care
&
National Health Insurance
Learning Objectives
Describe the common models of managed care
organizations.
Describe the purpose and process of utilization review.
Describe the purpose & various titles of the Patient Protection
and Affordable Care Act of 2010 (PPACA).
Describe the various court rulings involving PPACA.
Managed Care
Process of structuring or restructuring the healthcare system in
terms of financing, purchasing, delivering, measuring, &
documenting broad range of healthcare services & products.
Constraints of Managed Care Organizations
Limitations on the choice of providers by the consumer.
Requirements for prior authorization in order to obtain services.
Managed Care
Models
Health Maintenance Organizations (HMOs)
Preferred Provider Organizations (PPOs)
Exclusive Provider Organizations
Point of Service Plans
Experience-Rated HMOs

Managed Care
Models (cont’d)
Specialty HMOs
Independent Practice Associations
Group Practice
Group Practice Without Walls
Managed Care
Models (cont’d)
Physician Hospital Organizations
Medical Foundations
Management Services Organizations
Vertically Integrated Delivery System
Horizontal Consolidations
Managed Care (cont’d)
Federally Qualified HMOs
State Laws
Case Management Firms
Third-Party Administrators
Managed Care
Utilization Review
Utilization Review
Prospective
Concurrent
Retrospective
Utilization Management Firms
Negligent utilization review decisions

Managed Care (cont’d)
Liability for Nonparticipating Hospitals
Employee Retirement Insurance Security Act
Reducing Exposure to Liability
Health Care Quality Improvement Act (1986)
Open enrollment
Emergency care
Ethics in Patient Referral Act (1989)
Managed Care
Legal Actions
Financial Incentives Disclosed
Insurer & Tort-feasor
Benefit Denials
False & Misleading Statements
Managed Care
Price Fixing
Occurs when two or more competitors come together to decide
on a price that will be charged for services or goods
Considered a per se violation of the antitrust laws
Managed Care
Market Power
Product Market
Geographic Market
Provider Exclusion
Antitrust & Market Share

National Health Insurance
PPACA
Congress, after months of contentious debate, by a slim margin
enacted the Patient Protection and Affordable Care Act
(PPACA).
PPAC
Increases the number of Americans covered by health insurance
& decreases the cost of insurance
Eliminates discriminatory acts, such as exclusions due to
preexisting conditions, health status, & gender
PPACA
Reforms Immediately in Place
Eliminates lifetime & unreasonable annual limits on
benefits
Prohibits recessions of health insurance policies
Provides assistance for those who are uninsured because of
preexisting conditions
Requires coverage of preventative services
and immunizations
PPACA
Reforms Immediately in Place (cont’d)
Extends dependent coverage up to age 26 years
Develops uniform coverage documents so consumers can make
equal comparisons when shopping for health insurance
Caps insurance companies’ nonmedical, administrative

expenditures
PPACA
Reforms Immediately in Place (cont’d)
Ensures consumers have access to an effective appeals process
and provide a place to turn for help navigating the appeals
process and assessing their coverage
Creates a temporary reinsurance program to support coverage
for early retirees
Establishes an Internet portal to assist Americans in identifying
coverage options
Facilitates administrative simplification to lower health system
costs
PPACA
Act Titles
Title I. Quality Affordable Health Care for All Americans
Title II. The Role of Public Programs
Title III. Improving the Quality and Efficiency of Health
Care
Title IV. Prevention of Chronic Disease and Improving Public
Health
Title V. Health Care Workforce
PPACA
Act Titles (cont’d)
Title VI. Transparency and Program Integrity

Title VII. Improving Access to Innovative Medical Therapies
Title VIII. CLASS Act
Title IX. Revenue Provisions
Title IX. Strengthening Quality, Affordable Health Care for
All Americans
PPACA Challenged
Supreme Court 6/28/12
Agreed that the requirement for nearly all Americans to buy
health insurance
Court excised part of law requiring states to expand their
Medicaid coverage in a joint federal–state effort, to families
with incomes up to 133% of the federal poverty level (FPL)
Affordable Care Act
Controversy Continues
Politicians, Insurers, & Policyholders
Increasing Number of Insurance Companies Not Participating in
High Risk Markets
Excessive losses due to lower enrollment numbers
More costly medical conditions participate
Less costly do not participate
Increasing insurance premiums
Veterans Administration
The Veterans Administration
Provides care for 8.76 million Americans.
System problems include

Long waits for care
Falsified records
Veterans’ Healthcare Bill
Makes it easier to access health care benefits
Provides for more health professionals
Disciplines VA executives who are negligent
Review Questions
Discuss the purpose and various titles of the Patient Protection
& Affordable Care Act of 2010 (PPACA).
Describe the various court rulings involving PPACA.
Describe the common models of managed care
organizations.
Review Questions (cont’d)
Describe the purpose & process of utilization review.
Why did Congress pass the Health Care Quality Improvement
Act of 1986?
What is price fixing?

ASSIGNMENT PART 1: OBSERVATION
Paramjeet Chada
Deepa Sivakumar
1/30/2021
ECE 1150 Observation and Documentation
Anecdotal Observation
Observer:
Videative Name: Avery1-50.mov
LOCATION: (in the hallway )
Videative
URL:https://drive.google.com/drive/folders/159gg3KHwCFr7pO
fLQTL9c_PV9AS8ENAS
Statement of Context (Include age of children)
The child is sitting in the hallway, calling the dog, covering the
dog with two towels, and patting the dog. She is just three years
old.
Observation:
The child is sitting in the hallway and calls her dog Jasmin to
come and sit in front of her on the carpet, after which she goes
and brings the towel from the hall of grey color, which she uses
to cover the dog. One towel she places on to the dog's legs, and

the second she places on the dog's back to cover the dog fully.
After covering the dog, she as the dog to lay down and get some
rest. She wants the dog to rest and keep dog warm. The girl is
trying to protect her dog so that the dog should not catch a cold.
Reflection:
Link Theory to Practice:
Observer:
Videative Name: ShovelGolf-50 LOCATION: (in the
garden )
Videative
URL:https://drive.google.com/drive/folders/1 59gg3KHwCFr7pO
fLQTL9c_PV9AS8ENAS
The child is playing in the garden. He is around four years with
a shovel and a ball like he is playing hockey.

Observation:
The child is trying to play hockey on the ground with his toy
hockey stick, and he is learning how that toy could be used to
hit the ball; whenever he tries to hit the ball, the hockey stick
slips from his hand.
It shows that still, the child experiences how to use the stick as
when he first hit the ball, he sees the ball moves a bit. The stick
slips from his hand. He again picks up the stick and tries to hit
the ball again, but this time he hits the ball very hardball
bounces away from him, and the stick also slips from his hand
again. So the child will gradually learn how to keep the stick in
his hand after hitting the ball
Reflection:
Observer:
Videative Name: averywaters.mov LOCATION: (In

the hallway)
Videative
URL:https://drive.google.com/drive/folders/159gg3KHwCFr7pO
fLQTL9c_PV9AS8ENAS
The child is playing in the hallway with her do. She is around
three years and is providing water to her dog and guiding her to
drink it.
Observation:
The child is with the dog in the hallway, and she is trying to
learn the act of kindness by offering water to her thirsty dog.
She places the water in the bowl on the carpet as the dog comes
to her and lays down.
She is also learning how to take care of the pets, which are also
part of human life. An act of kindness is what she has to do
when she sees anyone around to help. So this all is what she is
experiencing now, which will gradually adapt when she gets
older. Besides, her mother is also telling her that she likes
water. It will remain in her mind that water is an essential
element of life.
Reflection:

ASSIGNMENT PART 1: OBSERVATION
Paramjeet Chada
Deepa Sivakumar
1/30/2021
Observer:
Videative Name: A Clear Purpose Supports Persistence
LOCATION: (on the table in room )
Videative https://streaming-videatives-
com.lc.idm.oclc.org/assets/804
The child is sitting on the table in the room with his name
Sohum, 20 months. He is playing with blocks trying to create
buildings present in his imagination.
Observation:
The child is sitting on the table and has three blocks and plays
with them. In his first attempt, he successfully makes all the

three blocks stand, as while doing this, he was standing. After
achieving this, he loudly said I did it. He was very excited as he
had accomplished his goal. After that, he disarranges all the
blocks and sits down to rearrange them. This time he was
making a mistake. His legs were hindering in the process of
making the blocks stand. As he tries to do so each time, he
fails; besides that, he still was trying again and again and never
gave up, although he didn't realize where he was making a
mistake.
He was trying to achieve what he did just a few minutes ago and
was persistent in doing that. He was continuously thinking
about why he could not achieve that and trying hard. However,
he could not find what is the issue why he was not able to
achieve that again.
Reflection:
Notwithstanding, he doesn't zero in on his body position, just
the squares. Consider this distinction. To think, "My legs are
standing out" while he thinks, "I need this square to stand"
would require such a meta-cognizance or similar preparation.
Meta-insight alludes to pondering speculation, for example, "I
figured she would come, yet I wasn't right." For Sohum to
consider his legs while dealing with the squares would sound
something like, "I'm chipping away at the squares; however, my
method of working isn't working."
In any case, he endures and, in the long run, accomplishes his
objective of three-level squares remaining in succession on their
limited sides. Indeed, he reports this construction's status as
precisely what he has been attempting to do from the beginning.
Note, he isn't perseverating on some disastrous activities
rehashed without thinking about their structure. He is enduring
with activities that have prompted achievement as of late. The
last requires some general contemplating the type of his
activities.

Piaget's Cognitive Developmental Theory is the best theory that
fits this case. Sohum is at Sensorimotor Stage. A timeframe
between birth and age two during which a newborn child's
information on the world is restricted to their tactile insights
and engine exercises. Practices are restricted to essential engine
reactions brought about by substantial upgrades (Kholiq, 2020).
It is the best way for him to learn how to solve a problem he
faces while trying to achieve his goal. It is the initial phase for
him; a little help about what he is doing wrong can help him
understand things.
Observer:
Videative Name: A One-Year-Old Child Finds Multiple Bowls
Irresistible LOCATION: (in the Kitchen)
Videative URL:https://streaming-videatives-
The child is playing in the kitchen. He is around one year old,
and his name is Kaylee, and he is playing in the kitchen with
multiple bowls and colors. He tries to arrange them and then
rearrange them.

Observation:
The child is trying to play in the kitchen with multiple bowls of
different shapes and sizes, and colors. The child tries to arrange
them repeatedly to see how things fit once he arranges
everything, he rearranges them and starts the process again.
After some time, he opens the cabinet door and starts to place
all the items in the cabinet and close the cabinets' doors.
Then again, he opens the cabinet door and takes out everything
from the cabinet. While doing this, he finds another steel-made
bowl with a lid on it, so he tries to remove the lid and place the
bowls in them but fails to close the lid, so he again removes the
lid and takes out all the bowls. He makes sure that when he
places a bowl in it, he can close the lid, so he places one bowl
and tries again and successfully does this.
Reflection:
The child is playing with the bowls. When the bowls are stuck,
he gets angry. It seems he didn't like that after that, he
rearranged them and tried to fill in the yellow pot with all the
objects in it. After doing all this, he tries to empty the bowl. It
seems that he likes to see things falling.
In the same way, he keeps doing; he wants to make sure that he
can separate when things are stuck. Later after some time, he
tries to open up the cabinet and tries to place everything back,
but he stops and pretends to eat or drink from it when he sees
the blue bowl. But when he places the bowl back into the
cabinet, he slams the door. It seems he is not happy with what
he is doing and suddenly opens up the door and takes everything
out.

Piaget's Cognitive Developmental Theory is the best theory that
fits this case. Piaget accepted that we are ceaselessly attempting
to keep up the intellectual balance, or equilibrium, between
what we see and what we know (Tucker-Drob & Harden, 2011).
As the child learns from what is going on, how things are
managed. In this case, the child must have seen her mom
arrange things in the kitchen, so that's what he was doing,
placing all the bowls together trying to arrange them, and when
he failed in doing so, he got angry. The next indication which
could be affiliated with this theory is that the child tried to
place all the bowls back into the cabinet, knowing that he had to
place them in the cabinet. He must have seen his mother doing
that back home, so that's what he did. Children often learn from
what they see and how it is done.
Observer:
Videative Name: Clever Teamwork Works LOCATION:
(In the garden)
Videative URL:https://streaming-videatives-
Children play in the garden when they are 4 to five years old.
They found a plastic bottle thrown outside the fence of the
garden. All the children try to pick up the bottle from there.
Observation:
The children played in the garden when they saw a plastic bottle

on the other side of the fence. They decided to pick that up, so
one of the children tried to bring the bottle close to them and
kept the bottle in her hand. While one of the kids is
continuously motivating everyone by passing comments like a
good job, others are saying i will help bring this bottle to this
side. The child holding the bottle tries to bring the bottle above
ground level to pull that bottle out of that fence.
Everyone is playing their role in achieving the task, so they try
to pull the girl to apply the right amount of force to pull the
bottle out of the fence. Although pulling it, they try to use the
water pipe to pull it out, but by mistake, one of the children
pushes the bottle away from the fences. All the children then try
to bring it back close to the fence. They climb the fence and use
the water pipe to bring the bottle close to the fences
Reflection:
The issue continues – the container is too enormous to even
think about fitting through the open spaces in the fence, and the
fence is too high to even think about strolling the restrain to and
over the top.
Stunning at the number of methodologies the kids imagine "on
the fly," some more rash, others extremely purposeful and
astute. The kids' overall readiness to "take a stab at anything"
remunerates their consistent exertion. They are not limited by
"rules" as numerous grown-ups are – decides that will, in
general, oblige imagination and creative arrangements.
Children learn from each other, and they are trying to use
whatever they can find to achieve their target. That is called
innovation, as kids are not worried about anything, so they try
every possible way to pull out the bottle from the other side of
the fence. Everyone is motivated and helping out each other.
Kids learn well when they are in a group. Everyone has
different ideas and ways of thinking, which help them
understand the situation or try different ideas.

Cognitive Development in Children is the best fit for this case.
To adjust to the developing climate around us, people depend on
cognizance, adjusting to the climate and changing it(Perret-
Clermont, 1980).
The abilities gained from group building are significant
individual and gathering improvement in kids. During group
building exercises, kids get the opportunity to speak with one
another and run after a shared objective. By working on being
an influential colleague and group pioneer, youngsters create
trust in their own capacities.
References
· Kholiq, A. (2020). How is Piaget's Theory Used to Test The
Cognitive Readiness of Early Childhood in School?. Indonesian
Journal Of Early Childhood Education Studies, 9(1), 24-28. doi:
10.15294/ijeces.v9i1.37675
· Perret-Clermont, A. (1980). Social interaction and cognitive
development in children. London: Academic.
· Tucker-Drob, E., & Harden, K. (2011). Early childhood
cognitive development and parental cognitive stimulation:
evidence for reciprocal gene-environment transactions.
Developmental Science, 15(2), 250-259. doi: 10.1111/j.1467-
7687.2011.01121.x
Chapter 21
Professional Liability Insurance
Learning Objectives
Describe the purpose of an insurance policy, including risk

categories, and the importance of professionals to carry
professional liability insurance.
Explain the elements and conditions of an insurance
policy.
Describe the investigation and settlement of claims.
Insurance
A contract that creates legal obligations on the part of both the
insured and insurer.
The insurer agrees to assume certain risks of the insured for
consideration or payment of a premium.
Under terms of an insurance policy, the insurer promises to pay
a specific amount of money if a specified event takes place.
Insurance Policies
Necessary Elements
Identification of Risks Covered
Specific Amount Payable
Specified Occurrence
Insurance Policies
Risk Categories
Property Loss or Damage
Personal Injury or Loss of Life
Legal Liability Risk
Telemedicine
Can Involve Misdiagnosis
Healthcare providers should confirm their policies adequately

telemedicine services.
Obtain written verification of such coverage from the insurer.
Insurance Policy Provisions
Policy Period
Defense & Settlement
Settlements & Awards
Coverage: Amount Payable
Punitive Damages
Conditions of Insurance Policies
1. Notice of Occurrence
2. Notice of Claim
3. Assistance of the Insured
4. Other Insurance
5. Umbrella Insurance
Conditions of Insurance Policies
5. Assignment
6. Subrogation
7. Changes
8. Cancellation
Liability of the Professional
News: $44M Paid in Nurse Practitioner Liability Claims Over
Past 5 Years: Report
All Professionals Need Insurance.
Purpose of liability insurance is to spread risk of economic loss
among members of a group who share common risks.
As risks increase, premiums increase to cover associated risks.

Premiums are placed in a shared risk fund from which funds are
drawn to cover costs of lawsuits.
Liability of the Professional cont’d
Insurance coverage is especially important for
Volunteer at a clinic or health fair not sponsored by his or her
employer.
Independent Contractor providing a service in a patient’s home
for an independent agency or registry.
Organization covered by an insurance policy that has an
exclusionary provision by which the insurance company
disclaims liability for a professional’s malpractice actions
brought against the insured organization.
Liability of the Professional, cont’d
Advanced Practice Nurse Practitioner
Registered Nurse
Private Duty Nurse
Students
Intentional Tort: Coverage Denied
No duty to cover intentional torts
Therapist’s sexual affair with patient
Sexual assault
Medical Liability Insurance
Covers
Individuals
Healthcare institutions
Outpatient facilities and clinics

Medical Liability Insurance (cont’d)
Insuring clause provides payment on behalf of insured if an
injury arises from:
Malpractice, error, or mistake
Acts or omissions on the part of the insured during policy
period
Medical Liability Insurance (cont’d)
Varies according to policy
Common risks covered
Negligence
Assault and battery as a result of failing to obtain
consent
Libel and slander
Invasion of privacy for betrayal of professional
confidence
Self-Insurance
Healthcare facility self-insures its malpractice risks.
Organizations should consult legal counsel before self-insuring.
Trustee Coverage
Coverage provided by organization.
Helpful in attracting qualified board board members.
For coverage to be effective.
Trustee must have acted in good faith within the scope of his or
her responsibilities.

Trustee Coverage (cont’d)
Coverage for board members should include
Counsel Fees & Expenses
Judgments
Fines & Penalties
Coverage that extends to actions taken while in office or
thereafter
Mandated Medical Staff Coverage
Malpractice Insurance
Right to require physicians carry malpractice
coverage
Right to suspend physician for not having coverage
Case: Right to Suspend Physician
Investigation and
Settlement of Claims
An insurance company may decide to settle a claim based on the
risk, usually because of:
Costs associated with a trial.
Higher payout could occur should the case go to trial.
Review Case
Sexual Assault
Does sexual assault generally constitute rendering professional
services within the coverage provisions of a physician’s

insurance policy?
Should a malpractice insurer be required to indemnify a
physician for liability resulting from the sexual assault of a
minor?
Review Case
Sexual Assault (cont’d)
No!
Sexual assault does not constitute rendering professional
services within coverage provisions of an insurance policy.
New Mexico Physicians Mut. Liab. Co. v. LaMure held the
malpractice insurer not required to indemnify a physician for
liability resulting from the sexual assault of a minor.
Review Questions
What is the purpose of an insurance policy?
Describe the conditions of an insurance policy.
What are the primary components of an insurance
policy?
What are the primary categories of a risk?
What are the distinct parts of an insurance policy?
Under what circumstances should a healthcare professional self-
insure?
Should a board member have personal liability insurance
coverage?
Describe what acts a professional liability policy covers, as well
as the risks it does not cover.

Chapter 5
Tort Reform
and
Risk Reduction
Learning Objectives
Describe the meaning of defensive medicine.
Describe various tort reform programs designed to lower the
cost of malpractice insurance.
Describe the various ways to manage and reduce the number of
malpractice claims.
Tort Reform
The tort system is inadequate to prevent medical
malpractice.
Damage awards as deterrents have failed.
Exorbitant jury awards and malpractice insurance premiums
cost billions of dollars annually.
State legislatures call for reform.
Physician Practice
Defensive Medicine
Undertreatment
Avoiding high-risk tests and procedures
Overtreatment
Excessive use of diagnostic tests
Tort Reform Schemes
Mediation and Arbitration

Statute of Limitations
Structured Awards
Medical Malpractice Screening Panels
Collateral Source Rule
Contingency Fee Limitations
Tort Reform Schemes (cont’d)
Countersuits: Frivolous Claims
Joint and Several Liability
Malpractice caps
No-Fault System
Tort Reform Schemes (cont’d)
Regulations of insurance practices
Statutes of limitations
Reducing the Risks of Malpractice
Risk management
Performance Improvement
Continuous quality improvement (CQI)
Peer review
Collaboration
Tort Reform
A concerted effort must be made to include all health
professionals in the process of tort reform.
The present system of punishment for all because of the
inadequacies of the few has proven to be costly and far
from effective.
The key to improving quality and controlling costs is
cooperation, not alienation.
Policymakers have failed in this arena and must return to a
commonsense approach to policy development by including

those who are most directly involved.
Review Questions
Describe various tort reform programs designed to lower the
cost of malpractice insurance. Should there be limits placed on
malpractice awards? Support your opinion.
Discuss what a structured award is and how it might reduce the
costs associated with large-sum malpractice awards.
Discuss which of the schemes for tort reform discussed
previously you consider most helpful in addressing the
malpractice insurance crisis.
Describe how risk management, performance improvement, and
peer review can be helpful in improving patient care and
reducing the number of malpractice claims.

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