Under the compensation arrangement that the Falcon Health Plan has with some of its providers, Falcon holds back 10% of the negotiated payments to these providers in order to offset or pay for any claims that exceed the budgeted costs for referral or hospital services. If the providers keep costs within the budgeted amount, Falcon distributes to them the entire amount of money held back. This way of motivating providers to control costs while providing high-quality, appropriate care is known as a:
A) Risk pool arrangement
B) Withhold arrangement
C) Cost-shifting arrangement
D) Bonus pool arrangement

Question

Quizplus · Accepted Answer

The arrangement described in the question is known as a withhold arrangement. This is a type of financial incentive where a fixed percentage of the negotiated payment is held back by the payer (in this case, Falcon Health Plan) and then released to providers if they keep costs within a certain budgeted amount. It is designed to motivate providers to control costs while maintaining the quality of care provided to patients.

Under the Compensation Arrangement That the Falcon Health Plan Has