Insurance scenarios

With typical dream exigency—in the face of complete disorientation— I drive out of the hotel garage knowing full well that I have no specific rendezvous with Lia, who is still in the lobby with the rental car agents, who are actually insurance executives. And although I recognize this to be an insane scenario, I am not conscious of the now obvious fact that it is a dream. 

In the scenario described at the beginning of the chapter, the pharmacy manager at Good Service Pharmacy (Marcie Hawkins) was faced with the decision to accept or reject a new contract from Better Health Insurance. The reimbursement rates in the new contract were significantly lower than the current rates, and 20 percent of the pharmacy s prescriptions would be affected. 

The pharmacy manager knows that if she accepts the contract, the pharmacy risks sending a signal to other third parties that it will accept low reimbursement rates. The pharmacy may also have to raise its cash prices or decrease its level of service to decrease costs, but this may be necessary in either scenario. If she declines the contract, the pharmacy will lose long-term customers and may get a reputation for being a pharmacy that does not accept insurance plans. It may also have to reduce a pharmacist s hours. It is unlikely that the contract could be renegotiated, although Marcie could decline the contract and see how Better Health Insurance responds. 

Next, the data for each patient are forwarded electronically to the billing department, which then assembles the data into the proper format of a claim form, normally using a computer billing software. In some complicated studies, manual billing may be done and their paper records are saved. The computer-generated bill is then sent to the insurance company or Medicare who, after proper verification of whether it meets its criteria, accepts or rejects the claim for payment. In most cases, the amount for each examination is paid by the rate set by the insurance company or Medicare, not what is billed. There are several scenarios for Medicare payment. For hospital inpatients, Medicare pays the entire amount at the DRG rate. For hospital outpatient services, Medicare sets up a payment rate for a service, which is divided into... 

In the last seenario (tax), environmental taxes are imposed on inputs used only in the conventional sector in a magnitude that insures the same aggregate effect on the input of nitrogen and pestieides as in the preference scenario and Sub-B (Figures 5 and 6). 

A term used in the insurance industry that is normally defined as the worst case scenario under which an estimate is made of the maximum dollar amount that can be lost if a catastrophe occurs such as a hurricane or firestorm. See also Probable Maximum Loss (PML). 

In this scenario, the company accepts the loss when it occurs. This is true "self-insurance," a viable strategy for small losses, where the cost of insuring against the loss is greater than the cost of the loss. Losses that are not insured... 

In this scenario, the company transfers the risk, for a premium, to another party, usually an insurance company. The insurance company issues a policy (a contract), stating under what conditions it will be liable to pay for any unexpected occurrence. This scenario provides the policyholder a large resource for an unexpected occurrence, a viable alternative when the company can obtain the resource for an acceptable premium. 

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