Managed Care Advantages

Managed care plans cover over half of the American population with health insurance. Plans such as health maintenance organizations, preferred provider organizations and point-of-service are standard offerings of managed care organizations (MCO). In general, these plans work by covering the cost of approved health-care services delivered by in-network providers. This model reduces cost of care for consumers, making this the biggest advantage of managed care.

Controlled Care Costs

• The principal factor in managed care is cost savings to consumers and purchasers of health insurance. The process to control care cost is to require or encourage consumers to seek in-network services from providers who have agreed to lower reimbursement rates. Most specialist doctor visits, hospitalizations, behavioral health, surgeries and procedures need approval by the managed care organization. Care requests are reviewed for medical necessity and provider and care-setting appropriateness against a set of established criteria. Though some plans allow out-of-network care reimbursement, consumers experience lower out-of-pocket costs when enrolled in a managed care plan.

Claims Processing

• Managed care allows streamlining of the claims submission and payment process. Larger MCOs allow providers to submit claims for reimbursement electronically. This simple, online process reduces paperwork and need to fill out long claims forms and mail them to the payer. Instead, claims submission is quicker, the providers (and patient) often have the ability to check the claims status online, and the turnaround time for payment is much faster. Additionally, other than paying copays and deductibles, patients do not need to submit any paperwork when seeing an in-network provider.

Provider Networks

• Provider networks are the crux of a managed care organizations. Providers, hospitals and medical supplier join a managed care network to provide care to the MCOs members. This arrangement allows members a wide selection of network providers, as MCOs must have a certain number of providers within a geographic area. Providers sign an agreement with predetermined pay rates and cannot bill members for any balances outside of this rate. MCOs complete a full credentialing review of each network provider and have a formal avenue for members to report quality of care and fraud concerns.

Accreditation

• Most large MCOs obtain accreditation from organizations such as the National Committee for Quality Assurance and the URAC. Accreditation requires strict standards on things such as specific policies and procedures to benefit members, credentialing standards, treatment records, confidentiality, the usage of clinical guidelines and other things. Most MCOs have a quality department that manages quality activities and outcomes, required by accreditors, to identify opportunities for improvement of the delivery of health-care services. You can be assured that an accredited MCO is one that adheres to firm standards of quality.