5. Discuss the difference between accreditation and certification. Discuss why a health plan may or may not participate in a voluntary accreditation program.
In the health industry, accreditation and certification are related but not interchangeable. Certification is a particular set of skills up to an established criterion that a certified individual should have the competence to perform. In most cases, certification includes testing; however certification can also include or be based on education and experience alone. (Roat, 2006) .On the other hand, accreditation is usually earned and applied to an entire organization instead of individuals. Within an accredited organization, certified individuals and programs may be present.
However, certification can become problematic when it excludes individuals who are competent but poor test takers which can be similar for accreditation, as a result, some health plans may or may not voluntary participate in accreditation programs .When organizations become accredited there is potential to “improve organizational performance, quality of care, safety standards and consumer satisfaction” (Braithwaite, 2011). In addition, Braithwaite (2011) suggests that accreditation programs can promote change in the standardization of services and organizational process (p.3); however there are not much evidence supports these findings. In addition, accreditation programs usually give the seal of approvals so voluntary participation can backfire on an organization because particular things may be overlooked or focused on causing some type of consequence such as probation or even worse loss of accreditation.
6. What is statutory accounting? What are a few of the key differences between statutory accounting principles and generally accepted accounting principles? Why is this important to an HMO?
To ensure managed care plans such as HMOs are financially viable and to protect investors’ interest, Kongstvedt (2007) states that HMOs are required to file financial statements with state department of insurance. However, these financial statements may be prepared using statutory accounting principles (SAP) or generally accepted accounting principles (GAAP).
The Statutory Accounting Principles (SAP) forms the basis for preparing the financial statements of insurance companies. As group 2 rightfully stated, SAP consist of rules and regulations which are establish by the National Association of insurance commissioners (NAIC). On the other hand, generally accepted accounting principles (GAAP) set accounting rules which are followed by all companies. Although both SAP and GAAP are accounting principles; they differ from each other as group 2 rightfully stated. Basically, in broad terms, Varadan (n.d) states that they differ in the accounting principles used to prepare the financial statements, governing agencies, the purpose of the financial statements, and valuation methods.
The significant difference between SAP...