MHA-FP5014 Assessment 2 Context

MHA-FP5014 Assessment 2 Context

Regulations, Risk Management, Risk Sharing, and Risk Financing Leading in today’s ever-changing health care industry requires constant adjustment to emerging laws, regulations, and industry standards. Organizations must quickly and effectively reposition to meet new, existing, and emerging laws. MHA-FP5014 Assessment

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Two examples of laws that have driven a multitude of new and sometimes confusing regulations are the Patient Protection and Affordable Care Act of 2010 and the Healthcare Insurance Portability and Accountability Act of 1996. The shift to electronic health records is another example of the need to create new structures, processes, and policies to meet legal and regulatory requirements. Government surveying bodies and industry accrediting bodies assess basic compliance as well as best practices. Effective leadership is not only necessary for the pursuit of excellence, but also for organizational survival.

Policy changes drive regulatory requirements and, consequently, requirements for provider organizations that depend upon Medicare and Medicaid as reimbursement sources. MHA-FP5014 Assessment

In The New England Journal of Medicine article, Inglehart (2011) creates a context for the health care environment relating to regulations, risk management, and risk sharing:

One of the hottest issues debated within the administration was whether ACOs should bear financial risk in their quest to achieve savings. CMS supported awarding a bonus to an ACO when its stated goals were achieved but imposing no penalty if it failed in that regard for the first 2 years. MHA-FP5014 Assessment

This approach (used in Medicare’s Physician Group Practice [PGP] demonstration) is designed for start-up ACOs, while they gain experience.

After White House intervention, a second, two-sided approach to risk was added to the rule, aimed at larger medical groups with stronger management structures. Such groups could choose to bear some of the financial risk, which currently Medicare totally assumes, in exchange for modestly higher bonuses if they succeed.

CMS is uncertain how many large groups will opt for this at-risk approach. A companion program offering even greater risk sharing is expected to be tested by CMS’s innovation center, and it may have more appeal to integrated systems that already accept capitation payments or other larger risk-sharing arrangements.

Risk Management Risk management has taken an increasingly important role in organizational viability. Conditions of participation for government-supported programs, standards for provider status required by insurance companies, and quality metrics requisite for industry accreditation must all be considered within the context of the organization’s directional strategy. It is wise to revisit the vision, mission, and directional strategy of an organization when considering how to assess and manage risk, as well as how to become a top-performing organization. There is an ever-present tension between management of medical errors and the improvement of quality of care. The goal is to determine how to assess risk, manage it, and create a culture of patient safety.

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Assessment 2 Context

MHA-FP5014 Assessment 2 Context

Risk Financing Risk management entails prevention of adverse consequences and minimization of negative effects from accidental loss. Risk financing refers to reducing the financial impact of risk, as well as determining the best approach, from a financial standpoint to handling adverse situations. MHA-FP5014 Assessment

Risk financing means looking at the operations of the organization as well as determining what financial preparation is needed to ensure a minimal financial loss. Concepts such as risk pooling, purchasing insurance, and taking risk reduction measures are key to financial preparation in risk management.

Risk financing may include all aspects of both legal protection and compliance with government regulations. It is important to note that many health care organizations have legal obligations to carry liability insurance under either their accreditation or license type as a means of financial loss protection. Some key concepts relating to risk financing include: MHA-FP5014 Assessment

1. Identifying and managing a risk financing issue. 2. Examining issues related to risk financing. 3. Analyzing existing organizational structures. 4. Determining the best risk financing options for a specific organization. 5. Understanding various insurance types related to financial risk reduction and asset

protection for a health care organization.

While health care leaders may expend great effort to avoid liability, it is wise and realistic to plan for human error. Inadequate risk financing exposes organizations to losses that can potentially threaten future viability.

References Inglehart, J. K. (2011). The ACO regulations – Some answers, more questions. New England

Journal of Medicine, 364(17), e35.

Overview Assessment 2-6.docx

· Overview

Create a 2–3-page internal memo for a risk-management team. Summarize a risk financing issue for a selected organization in the memo. MHA-FP5014 Assessment

Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in a sequence. MHA-FP5014 Assessment

Financial risk-management helps reduce the financial impact of risk. It also determines the best approach for handling adverse situations from a financial standpoint. Health care leaders must have a solid understanding of the basics of regulation, government and public risk sharing, and also the era of ACOs.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria: MHA-FP5014 Assessment

· Competency 2: Apply a risk-management model or framework to a specific risk-management priority.

· Identify key performance indicators and measures associated with a specific risk-management issue.

· Discuss strategies used to identify risk financing issues in a selected organization.

· Provide recommendations for risk financing options related to an identified financial risk issue.

· Competency 4: Analyze applicable legal and ethical institution-based values as they relate to quality assessment.

· Summarize the legal and ethical financial risk obligations of an accountable care organization.

· Competency 5: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration. MHA-FP5014 Assessment

· Prepare a professional memo summarizing a risk financing issue for a specified organization.

Context

There is a constant tension between the management of medical errors and the improvement of the quality of care. You may be asked to participate in risk-management and risk financing activities in your role as a health care leader.

If a risk management team asked you to research and summarize financial risks in your organization today, would you know the following: MHA-FP5014 Assessment

· What information to include?

· What format to use?

· How to present alternatives and make a recommendation?

· How to locate credible data from which the issue is to be evaluated?

Read further in the Assessment 2 Context [PDF] document, which contains important information on the following topics: Attached

· Regulations.

· Risk Management.

· Risk Sharing.

· Risk Financing.

Questions to Consider

As you prepare to complete this assessment, you may want to think about other related issues to deepen your understanding or broaden your viewpoint. You are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of your professional community. Note that these questions are for your own development and exploration and do not need to be completed or submitted as a part of your assessment.

Imagine that a supervisor enters your work setting accompanied by an unexpected visitor from CMS. Your supervisor introduces you to the Medicare surveyor, who will be interviewing you.

· What is the risk-management process in your organization?

· What criteria would you use to determine how well your organization is performing as an ACO?

· What data or resources would be helpful to you?

· How would you explain the concepts of risk management and risking financing activities to your subordinates?

· How would you explain a risk financing continuum to your subordinates?

MHA-FP5014 Assessment

Resources