Final answer:
When a member disenrolls from one health plan and enrolls in another, CMS determines the compensation type for the new plan. This can be either fee-for-service or health maintenance organization (HMO) model.
Step-by-step explanation:
When a member disenrolls from one health plan and enrolls in another, CMS (Centers for Medicare and Medicaid Services) determines the compensation type for the new plan. CMS is responsible for setting the rules and regulations for Medicare and Medicaid, including how health plans are compensated. This means that CMS decides whether the new plan will use a fee-for-service reimbursement model or a health maintenance organization (HMO) model.
With a fee-for-service model, medical care providers receive reimbursement according to the cost of services they provide. On the other hand, an HMO model involves reimbursement based on the number of patients handled by the providers. The type of compensation determines how medical care providers are paid for their services in the new health plan.
For example, if a member disenrolls from a fee-for-service plan and enrolls in an HMO plan, the compensation type in the new plan will be based on the number of patients handled by the providers. Conversely, if the member switches from an HMO plan to a fee-for-service plan, the compensation type will be based on the cost of services provided.