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Accountable Health Partnerships

Published Oct. 6, 2005

Another in a weekly series designed to help readers with business terminology.

If discussions of health care reform sound like alphabet soup to you -- what with the CHPAs, HMOs and PPOs -- well, here is another acronym to add to the pot: AHPs.

AHPs, or Accountable Health Partnerships, are the entities that are allowed to solicit business from employers and employees belonging to "chippas" or Community Healthcare Purchasing Alliances (CHPAs).

AHPs can be formed by insurers or health maintenance organizations (HMOs), which take on the financial risk of health coverage. The AHPs link these insurers or HMOs to health care providers, such as doctors, hospitals, clinics or labs.

An insurer or HMO must be licensed by the state as an AHP to be empowered to pitch to chippa members. The chippas then standardize all of the pitches for the benefit of the chippa members.

Despite their narrow base, AHPs can offer a variety of health care plans and coverage options -- adding up once again to alphabet soup for health care consumers to digest.

Let's examine the many common types of health coverage offered by AHPs:

+ Indemnity insurance coverage: traditional insurance paying 100 percent of patients' costs regardless of the doctors they use.

+ HMOs: health maintenance organizations that usually cover 100 percent of the costs if patients see HMO doctors.

+ PPOs: preferred provider organizations, networks of care providers who negotiate discounted rates with insurers. Consumers can see a PPO doctor and have all or most of the cost covered, or they can visit a doctor not in the PPO but have to pay a higher percentage of the cost themselves -- usually 20 to 30 percent.

Here are some uncommon yet increasingly popular types of coverage offered by AHPs:

+ AHPs can offer POS HMOs, a newly popular kind of HMO that is less regimented. POS refers to point-of-service, meaning that the plan allows patients to see doctors outside the HMO, but it pays only most of the cost, usually 70 percent.

PC PPOs: PPOs that are similar to POS HMOs in that they offer patients choice but usually at a higher cost. The PC refers to "primary care," meaning a patient must get an okay for treatment from a "primary care" physician within the PPO to go to a specialty doctor and be covered 100 percent. If the patient doesn't receive approval, then visits the specialist, it is only partly covered.

+ EPOs: exclusive provider organizations are insurance companies' answer to HMOs. Insurers by law can't own HMOs directly, so some major insurers have formed EPOs, which employ doctors. Patients can only go to EPO doctors for full coverage.

With such an array of choices, "it is only getting more and more complex as health reform progresses," commented William Norsworthy, president of SunHealth Care Plans, a preferred provider organization in Clearwater.