Healthcare Questions and Answers

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Confused about Healthcare?

HMO, PPO, open enrollment, closed panel, copayment, fee-for-service; all these terms entered our vocabulary during the last decade. Sometimes the use of these words seems to make an already confusing situation even more confusing.

At Cedars-Sinai Medical Delivery Network, we take the job of educating our patients seriously, and education extends beyond telling you what pill to take at what time or what changes your body will go through during pregnancy. We want to make the total healthcare experience as painless as possible-and that includes helping you understand how healthcare works in Southern California today.

 

 

How Did Healthcare Develop into This?

As you probably know, healthcare expenses are increasing. New, more accurate, tests come out that are more expensive, new and better equipment is manufactured that is more expensive, new drugs are developed that are more expensive. All of these new tests, equipment and drugs are vital to fighting disease and illness, and Cedars-Sinai works hard to bring you the newest life-saving and life-enhancing products. But, they do cost money. Today the United States as a whole pays more than $1 trillion on healthcare every year.

The idea of managed care began as a reaction to the increasing costs of providing medical care in the United States. As early as 1973, the U.S. Congress passed The HMO Act, which funded some of the first health maintenance organizations (HMOs), which have evolved into today's managed care system. Leaders at that time wanted to create a structure that rewarded physicians for providing high-quality care but that kept them from ordering extra tests that simply increased their income. The idea was for the system to focus on preventive care-care that would keep you from going into the hospital or nursing home-not just react when you became ill or injured. Leaders were also looking for a solution that would use the marketplace, not the government, as the payer.

Now, 30 years later, we have all sorts of ways of paying for healthcare-Medicare, Medicaid (called Medi-Cal in California), managed care, fee-for-service (also called indemnity). All of these serve a different type of need.

 

What to Expect if You Are Part of a Managed Care Plan

People using managed care to pay for their healthcare have signed up with an insurance company using a type of insurance that puts some sort of restriction on how care is delivered. The term managed care means that the insurance company is taking responsibility for keeping the cost of providing care low while at the same time keeping the quality of the care high.

Southern California has been the leader in managed care's evolution. Many of the initial managed care concepts were tried here first. Some have succeeded; others haven't worked as well.

In Los Angeles, the main method of managed care works like this: You sign up with an insurance company's managed care plan either through work, Medicare or on your own. The insurance company negotiates with employers, physicians, physician groups (such as Cedars-Sinai Medical Group and Cedars-Sinai Health Associates) and hospitals to set rates for the various types of care given. In most cases, the insurance company pays physicians or medical groups a certain amount each month for each patient signed up with the doctor or medical group to provide basic medical care. This is called capitation. The capitation amount is to pay for most of your healthcare needs, such as giving you an annual physical, caring for you if you get the flu, watching your cholesterol levels, or giving treatments for cancer.

Under managed care, you, the patient, typically pay a small amount each time you see the physician, usually about $10 or $15 (called a copayment). These fees vary depending on your insurance plan.

When you sign up, or enroll, you become a member of that plan. If you sign up through work, you might have been given a choice of insurance companies, such as Aetna, Blue Cross, Cigna, HealthNet, or PacifiCare. Each of these companies has different managed care plans (sometimes called products), such as HMO, PPO (also called preferred provider organization), POS (called point of service). Each type of plan covers various procedures differently. Some might pay for infertility treatments while others might not. Some might pay for acupuncture while others do not.

It can be confusing figuring out which plan is right for you and your family. In the early days of managed care, the types of plans were clearly different. Now, responding to consumer demand for more choice, the plans are beginning to resemble each other.

Using the basic definitions, however, an HMO plan means you must chose a primary care physician and you must use the physicians who are signed up with that group and HMO for any care. If you do not, the HMO will not pay for the care.

Under a PPO plan, the insurance company will give you a list of physicians you can go to and still be covered, so you have more leeway in choosing a physician. If you go to a physician outside of that list, the insurance company might pay for some of the care, but will usually require you to pay a larger amount.

Under a POS plan, you have an HMO and a PPO option. When you need care, you choose to activate either the HMO or PPO option. The HMO and PPO options pay for different amounts (usually the HMO option covers more care but you are more restricted in the physicians you can choose from).

While we can't tell you to choose one plan over another, we can tell you it is important for you to consider various factors in making your choice, such as how much you can afford to pay out of pocket.

Your employer's human resources department can probably help you in distinguishing between the plans and might have resources to help you make a decision. If you use Medicare, your local Social Security office can help you.

If your employer has more than one plan to choose from, you can typically switch your plan once a year. The period for making this choice is called open enrollment. If you find you want to move from a PPO to an HMO, you can do so at this time. If you do change, however, be sure to tell your doctor's office, so they can make sure the information in your file is up-to-date. You should receive a new insurance card within a few days of signing up, but it often takes the health plan eight to 12 weeks to get that information to the doctor's office. If you need care during that time, there might be confusion about who pays for what.

When you sign up with a managed care plan, your insurance company will ask you to choose a primary care physician who is part of a medical group or independent physician association, who will oversee your medical care. This physician will interact with any specialists you might see and will ensure that you obtain the appropriate preventive care. Your employer will give you a book or directory listing hundreds, if not thousands, of physicians who accept the managed care plan you have chosen. Most such directories are sorted by city and state.

If you are looking for a Cedars-Sinai Medical Group or Cedars-Sinai Health Associates physician, you can find them listed under the cities of Beverly Hills or Los Angeles. Some directories refer to us as Cedars-Sinai Medical Care Foundation. Whatever name they print, however, be assured that when you choose Cedars-Sinai, you are choosing the highest-quality care in the Los Angeles area.

The physicians or hospitals who take these types of insurance programs agree to care for people signed up with that health plan. Insurance company asks you to choose a primary care physician-usually a general internist or family practice physician-who will direct your care. At Cedars-Sinai Medical Group and Cedars-Sinai Health Associates, all of our primary care physicians are board-certified internists or pediatricians who are able to diagnose and treat a variety of illnesses and injuries and who are able to assess what types of specialized care you might need. In most cases, your primary care physician will be able to care for most of your needs.

If you use an HMO or PPO plan and need to see a specialist--such as an orthopedist for an ankle injury or a neurologist for numbness or a cardiologist for a fast heart rate-the primary care physician (often called your PCP), will request a referral (also called an authorization) from the Utilization Management Department. This referral indicates to the insurance company that you have gone through the correct procedures for getting specialized care. At Cedars-Sinai Medical Group and Cedars-Sinai Health Associates, most of our referrals are automatic (or pre-approved), meaning they are given to you at the primary care physician's office and do not need further review. In some cases, particularly for complicated diseases, the medical director will want to discuss the treatment your PCP is recommending to make sure it is best suited to your needs. By law, all referrals needing further review are processed within a few days and you will be notified of its status by mail within seven to 10 days.

If you ever have questions about a referral, you can call our Member Services Department. Remember, in most cases, your referral will be automatic and you will have it with you when you leave your physician's office. This allows you to make an appointment with the specialist quickly.

 

Fee-for-Service

People who prefer unlimited choices of physicians, who don't want to deal with the restrictions of managed care, or who do not have healthcare coverage, typically end up paying cash for their services. This is called fee-for-service.

Sometimes someone who pays fee-for-service has insurance but simply requests refunds from the insurer after seeing the physician. This is only possible with certain types of insurance.

People paying fee-for-service can see any physician they want to, without needing a referral. The internist might refer a fee-for-service patient to a specialist, but the patient does not need to wait for approval from the insurance company.

 

Medicare

Medicare is a government-run program to pay for healthcare for people who meet certain criteria. Most people think of it as being for people over 65, but it also pays for the healthcare needs of people with end-stage renal disease or with certain disabilities.

For more information on Medicare and how it works, we suggest you visit the Medicare Web site at www.medicare.gov or visit your local Social Security office. 

 

The Cedars-Sinai Medical Delivery Network

The Cedars-Sinai Medical Delivery Network strives to make your healthcare experience as painless as possible-both clinically and administratively. We understand the frustrations of dealing with insurance companies when you or someone you love is ill. We also know that coming in for a routine physical should not be a hassle. We want to be part of your support network and provide the highest quality care that meets your needs.

The Cedars-Sinai Medical Delivery Network provides medical care in two ways: We have a medical group- , and an independent physician organization-Cedars-Sinai Health Associates.

 As a patient of Cedars-Sinai Medical Group, you benefit from convenient access to over 100 primary and specialty care physicians and seamless coordination of your care between them. The group is comprised of multi-specialty practices ranging from internal medicine, dermatologists, endocrinologists, gastroenterologists, general surgeons, obstetricians and gynecologists, hand surgeons, pediatricians, plastic surgeons, rheumatologists and other specialists. Therefore, if you need to see a specialist, often you can see someone who belongs to Cedars-Sinai Medical Group.

The physicians in Cedars-Sinai Medical Group accept most forms of payment, including fee-for-service and managed care plans. Our offices are designed to serve all patients, regardless of how they pay.

Cedars-Sinai Health Associates is a group of mostly private practice physicians who are contracted through Cedars-Sinai to be able to provide care for managed care patients. Many of these physisicans see other patients not associated with managed care or CSHA. 

 

What Does This Mean When I Need to See a Doctor?

Our physicians will provide the same high-quality, compassionate care no matter how you pay. The only difference is in the paperwork.

If you are a fee-for-service patient, you can simply find the physician you want to see and call for an appointment.

If you are in a managed care plan and have already chosen a primary care physician with Cedars-Sinai Medical Group or Cedars-Sinai Health Associates, you, too, can simply call that physician for an appointment. If you are new to the area or new to Cedars-Sinai Medical Network, we suggest you call our Patient Services Department. Our representatives will be happy to work with you to find a physician who meets your needs.

As it says in our mission statement, our mission is to provide the finest professional medical care in a comfortable, caring and state-of-the-art environment.

 

Healthcare and Managed Care Terms or Phrases

Capitation

The insurance company pays physicians or medical groups a certain amount each month for each patient.

Copayment

An amount of money the insured person pays each time he or she sees a doctor, gets a prescription, or has a medical service rendered.

Enroll

A term to describe the process of signing up with a managed care health plan.

Fee-for-Service

Paying for medical services when they are provided or when a bill is received. Payment can be in cash or as an insurance reimbursement.

HMO Plan

A benefit plan in which you must chose a primary care physician and you must use the physicians who are signed up with that group and HMO for any care or the HMO will not pay for the care.

Independent Physician Association (IPA)

An organization in which private-practice physicians agree to work together to negotiate with insurance companies but the physicians run their own offices.

Managed Care

A concept of overseeing the use of medical services to keep the cost of providing care low while at the same time keeping the quality of the care high, typically by having the patient go through a primary care physician before seeing specialists, thus ensuring the proper use of specialty care.

Medicare

A government-funded insurance program that covers people over age 65 and some people with certain diseases or disabilities.

Member

A person who has signed up with a managed care health plan.

Medical Group

A group of physicians who have created a company devoted to providing medical care.

Open Enrollment

A period of time in which a person can change insurance plans offered by his or her employer.

Out of Pocket

Any fee paid by the patient. Can be a copayment, deductible or the entire bill.

POS Plan

You have an HMO and a PPO option. When you need care, you choose to activate either the HMO or PPO option.

PPO Plan

The insurance company will give you a list of physicians you can go to and still be covered; if you go to a physician outside of that list, the insurance company might pay for some of the care, but will usually require you to pay a larger amount.

Primary Care Physician

A doctor who coordinates the care for a person with managed care insurance. All managed care insurance plans require members to choose a primary care physician or medical group before seeking care.

Referral or Authorization

What the primary care physician writes if you need specialized medical care. print button
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