RISK-SHARING POOLS – Class 4

Individual Group Pool – Responsible For:

  • Optometry
  • Outpatient prescription drugs
  • Drug and alcohol rehabilitation services
  • Psychiatry
  • Outpatient physical or rehabilitation therapy

Collective Pool for all of the Network of Contracted Providers – Responsible For:

  • Inpatient hospital costs
  • In-area emergency room services
  • Out-of area emergency care
  • Inpatient professional fees
  • Long-term care facility
  • Durable medical equipment

Remaining Amount, if any, distributed per Contract as a bonus to providers

There are different types of risk sharing pools. Some may consist of a percentage of payment the plan withholds from physicians and returns if target costs are met. Others may be specific funds set aside by MCO’s to cover certain designated medical services, such as stop-gap coverages. For example, an HMO might create two pools, one for the individual group of contracted providers such as an IPA and another collective pool for all of the network of Providers contracted with the MCO. Certain designated charges as spelled out in the contract between the MCO and the group would be deducted from the risk pools for payment for those specified services if such services are rendered. Then the remaining amount would be paid to the individual group.

For example, the individual type pool might say certain services would be paid from this pool like optometry, outpatient prescription drugs, drug and alcohol rehabilitation services, psychiatry, outpatient physical or rehabilitation therapy. The amount left over after a certain period of time might or might not be paid to the individual group, depending on how the contract is structured. The contract might say certain services would be paid from the collective pool such as inpatient hospital costs, in-area emergency room services, out-of area emergency care, inpatient professional fees, long-term care facility, durable medical equipment. Then after a designated time as spelled out in the contract the collective groups would receive their portion of funds from the collective pool.

Hint to Providers: Be Specific in Contracts with Managed Care Organizations (MCOs) terms of risk sharing pools including:

  • Who is participating in the pools
  • Specify deductions to pools and if stop loss (limitations of dollar amounts provider is responsible for) apply
  • Timing of distribution of funds to Providers

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