Question

A Medicare risk program is a federally qualified HMO or CMP that meets specified Medicare requirements and provides Medicare-covered services under a(n):

a. quality assurance program
b. adverse selection
c. risk contract
d. flexible benefit plan

Answer 1

A Medicare risk program is affiliated with HMOs or CMPs that provide services under a risk contract, differing from the traditional fee-for-service model by offering preventive care and managing health services efficiently.

Step-by-step explanation:

A Medicare risk program is a type of health plan where federally qualified Health Maintenance Organizations (HMOs) or Competitive Medical Plans (CMPs) provide Medicare-covered services to beneficiaries under a risk contract. This approach is an alternative to traditional fee-for-service insurance and aligns with the goal of managing and balancing the risks associated with providing health care services. Under such arrangements, HMOs receive a fixed monthly payment per enrolled patient regardless of how many services that patient uses, and thus assume the risk of covering the costs themselves.

This is in contrast to the fee-for-service system where medical providers are reimbursed for each service provided. The fixed payment model incentivizes HMOs to focus on preventive care and the efficient management of health services to maintain profitability, which can help to mitigate issues such as moral hazard and adverse selection, prevalent in different insurance systems.