Under the Compensation Arrangement That the Falcon Health Plan Has

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

Correct Answer:

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