HIM 151 Chapter 5 MANAGED CARE PLANS

Balance Budget Act of 1997 and the CMS termed Managed Care Organizations as:

"Coordinated Care Plans"

In 1906, Western Clinic in Tacoma, Washington, offered its members medical services for how much?

$0.50 per month

In 1929, school teachers in this plan prepaid (how much?)

$6 per year for 21 days of hospitalization

MCOs most commonly use two prospective payment methods:

1) Capitation 2) Global Payment

3 Types of Special Needs Plan (SNPs):

1) D-SNP 2) I-SNP 3) C-SNP

Types of Consolidation

1) Horizontal Consolidation 2) Vertical Consolidation

Types of IDSs:

1) Integrated Provider Organization (IPO) 2) Group (Practice) Without Walls (GWW/GPWW) 3) Physician-Hospital Organization (PHO) 4) Management Service Organization (MSO) 5) Medical Foundation

States have 3 purposes in enrolling their Medicaid and CHIP beneficiaries in managed care:

1) Reduce spending 2) Increase predictability of spending 3) Improve quality of care and its coordination

Two common sets of measures/performance improvement initiatives to assess and improve quality follow:

1. AHRQ's Consumer Assessment of Healthcare Providers and Systems (CAHPS) 2. NCQA's Healthcare Effectiveness Data and Information Set (HEDIS)

The evidence from a review/study indicated that disease management programs could:

1. Improve health and the quality of life 2. Reduce hospital admissions 3. Decrease hospital and total healthcare costs

Evidence-based clinical practice guidelines outline:

1. Key diagnostic indicators 2. Timelines 3. Alternatives in interventions and treatments 4. Potential outcomes

Organizations with accreditation standards for managed care includes the following:

1. NCQA (National Committee for Quality Assurance) 2. URAC (formerly the Utilization Review Accreditation Commission) 3. AAAHC (Accreditation Association for Ambulatory Healthcare) also known as the Accreditation Association

Managed care evolved into numerous types of organizations and plans in addition to HMOs such as:

1. Preferred Provider Organizations 2. Point-of-Service Plans 3. Exclusive Provider Organizations.

Two Sorts of Integration are Important:

1. Process Integration 2. Functional Integration

CYU 5.2.2 Name the two types of integration important to IDS.

1. Process integration and 2. Functional integration Page 107

MCOs focus on high quality patient care. They achieve this goal through 4 main principles/4 main principles of quality patient care:

1. Selection of Providers 2. Health of Populations 3. Care Management Tools 4. Quality Assessment and Improvement *study Table 5.1 on page 95

Utilization Review is a cost-control because it answers the following two questions:

1. Should this healthcare service occur? 2. What setting is the most efficient in terms of delivery and cost?

Four Basic Types/Models of HMOs:

1. Staff Model 2. Group Practice Model 3. Network Model 4. Independent Practice Model

* 3 parts of managed care:

1. clinical 2. financial 3. administrative

Managed Care systemically merges:

1. clinical 2. financial 3. administrative processes to manage access, cost, and quality of healthcare

According to a review Disease Management could:

1. improve health and the quality of life, 2. reduce hospital admissions 3. decrease hospital and total healthcare costs

Conditions for becoming a federally qualified HMO:

1. minimum benefits package 2. open enrollment 3. community rating

a. Medical Necessity (definition)

= A service or supply provided for the diagnosis, treatment, cure, or relief of a health condition, illness, injury, or disease. = It must be necessary for and appropriate to the diagnosis, treatment, cure, or relief of a health condition, illness, injury, disease, or its symptoms.

1) Horizontal Consolidation

= Hospitals merge with hospitals

2) Vertical Consolidation

= Hospitals merge with other types of healthcare providers, such as home health agencies, nursing homes, physician practices, rehabilitation centers, and others. Example: Sentara, Riverside and Bon Secour, and CHKD has some as well

2. Health of Populations

= MCOs are responsible for the delivery of healthcare services across the continuum-of-care in terms settings and types. = The MCO is clinically responsible for the health outcome of its population = In addition, MCOs often support their members' participation in health and wellness management. These programs stressed the habits of healthy lifestyles such as exercise and proper nutrition. Other aspects of health and wellness management include smoking cessation, alcohol moderation, and harm reduction. = Examples of SETTINGS: 1. Physician Offices 2. Home Health Agencies 3. Hospitals **= Examples of TYPES OF CARE: 1. Preventive 2. Wellness Oriented 3. Acute 4. Chronic

I. Quality Patient Care

= MCOs focus on providing this through the use of the 4 main principles.

4. Quality Assessment and Improvement

= MCOs participate in rigorous accreditation processes and in performance improvement initiatives.

1. Selection of Providers

= MCOs stress the use of criteria in their selection of providers. = MCO select providers using pre-established and standards. = these criteria are based on quality, scope of services, cost, and location. = timelines for credentialing and re-credentialing are strictly followed. = this emphasis on the selection of providers ensures their members have access to superior and eminent providers throughout a geographic area.

B. Prospective Reimbursement Method

= MCOs use these methodologies = the purpose of this is to reduce the inflation of costs. = through this method, the MCOs share the risks of the costs of the patients' care with providers. = In this method, providers receive one predetermined amount for all the care a patient or client may receive during an episode-of-care. = the MCO does not increase payments for the complexity or extent of healthcare services, so the incentive to provide higher volumes of services to generate higher reimbursements is eliminated.

Utilization Review (definition)

= a component of utilization management, = is a process that determines the medical necessity of a procedure and the appropriateness of the setting for the healthcare service in the continuum-of-care (Inpatient or Outpatient). = saves money through its prevention of overutilization.

Special Needs Plan (SNPs)

= a form of MA plan, established by Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. = enrollment must be voluntary

2. Group Practice Model

= a type of HMO where in the HMO contracts with a medical group = the health professionals in this medical group provide services on a FEE-FOR-SERVICE or CAPITATION BASIS. = An advantage for the HMO and a disadvantage for the MEDICAL GROUP is that the MEDICAL GROUP BEARS THE RISK = An advantage for the medical group is a GUARANTEED CUSTOMER BASE.

d. Prior Approval (definition)

= also known as "Preauthorization" or "Precertification" = is also a cost control = is the formal administrative process of obtaining prior approval for healthcare services.

Medicare Advantage (MA)

= also known as Medicare Part C = is a form of managed care for Medicare beneficiaries = types of plans available include HMOs, POSs, PPOs, and PSOs. = deductibles and copayments are lower = these plans offer an expanded set of benefits that are not included in Medicare Part A or Part B. = because the elderly often present complex medical conditions, this plan may incorporate case management and disease management. = per federal law, a beneficiary's enrollment must be voluntary; a beneficiary cannot be mandated to enroll in MA. About 33 percent of Medicare beneficiaries are enrolled in MA.

1. Process Integration

= also known as clinical integration, is the coordination of direct patient care activities

e. Second and Third Opinions

= are cost containment measures to prevent unnecessary tests, treatments, medical devices, or surgical procedures. = are obtained from medical experts within the healthcare plan.

Managed Care Organizations (MCOs)

= are healthcare plans that attempt to manage care by integrating the financing and delivery of specified healthcare services. = implement provisions to manage both the cost and outcomes of healthcare.

Medicaid and Children's Health Insurance Program (CHIP)

= are joint federal and state healthcare programs. = these two programs finance healthcare coverage for over 91 million people, a little over one-quarter of the US population. = administered by the state = most states enroll their Medicaid and CHIP beneficiaries in managed care. = spending on managed care accounts for 46 percent of total Medicaid spending.

PCPs often are:

= are often called "the Gatekeepers" = In many MCOs, one PCP provides, supervises or arranges for a patient or client's healthcare and makes necessary and appropriate referrals Family Practitioners General practitioners Internists Pediatricians

PBMs or Pharmacy (Prescription) Benefit Managers

= are organizations that administer healthcare insurance companies' prescription drug benefits. = are the predominant infrastructure for administration of prescription benefits in the United States.

Dual Eligibles or Duals

= are people who qualify for both Medicaid and Medicare. = are Medicare beneficiaries whose low income also qualifies them for Medicaid benefits.

c. Evidence-based clinical practice guidelines (definition)

= are the foundation of members' care for specific clinical conditions. = are explicit statements that guide clinical decision making. = these guidelines are benchmarks of best practices in the medical care and treatments of patients and clients = are used to manage the wellness of members and to direct the care of acute illnesses and chronic conditions. = these guidelines serve to standardize optimal care for all patients and to deliver comprehensive, coordinated care across multiple providers

State Medicaid Programs

= are the secondary payers to Medicare. They aid as a wraparound, thus they fill the gaps in what Medicare does not pay.

Positive side of Consolidation:

= consolidation is believed to increase coordination of patients' care and efficiency in the delivery of services. Thus, consolidation could improve quality of patients' care and decrease costs. = for the entire healthcare system, the frequency of hospital admissions slightly decreased.

Negative side of Consolidation:

= consolidation may create systems so large that they can eliminate competitors and increase prices. Thus, outcome of consolidation may harm consumers and tax payers. = they found that as the level of hospital-physician integration increased, such as hospital owning physician practices, hospital prices increased. = a single health insurer created anticompetitive market conditions in these areas with negative consequences for consumers. = in the AMA's study, anticompetitive market conditions resulted in increased premiums and watered-down benefits.

f. Case Management

= coordinates an individuals care, specially in complex and high-cost cases. = individuals are assigned case managers who are typically nurses or physicians. = they coordinate the efforts of multiple healthcare providers at multiple sites over time. = often are assigned to patients or clients with catastrophic illnesses or injuries, such as a severe head injury

C. Financial Incentives

= exist for both providers and members; can be positive or negative = these cost controls prevent the waste of financial resources through the provision of excessive or unnecessarily expensive healthcare services. = For providers, these involve the provision of cost-efficient care. It can also mean meeting targets for cost efficiency, ordering less expensive drugs

2) Global Payment

= extends the scale of capitation = providers in an integrated delivery system (IDS) or other type of network receive one fixed amount for members of the MCO. = the providers include physicians, hospitals, and other care providers. = the scale of capitation is increased from the single provider to an entire delivery system. = single payment is divided among all providers.

Medicaid

= finances healthcare services for people with low incomes, including children, older adults, and persons with disabilities. = accounts for approximately 17 percent of total US healthcare spending.

CHIP

= finances healthcare services for uninsured children = is much smaller than Medicaid, with approximately nine million enrollees.

b. Disease Management

= focuses on preventing exacerbations (flare-ups) of chronic diseases and promoting healthier lifestyles for patients and clients with chronic diseases. = patients are monitored to promote adherence to treatment plans and to detect early signs and symptoms of exacerbations. = these programs often focus on diabetes, congestive heart failure, coronary heart disease, COPD, and asthma. = is closely aligned with coordination of care because the efforts of multiple providers must be synchronized.

4. Independent Practice Model

= in this HMO model, the HMO contracts with the IPA or Independent (Individual) Practice Association. The IPA in turn contracts with individual health providers. = the HMO reimburses the IPA on a CAPITATED or on a FEE-FOR-SERVICE basis. = the participating physicians have patients and clients who are members of the HMO as well as patients and clients who are not members. = Existing facilities of the independent health professionals are used rather than a freestanding facility. = local, county, or state medical society may sponsor this type of HMO.

3. Care Management Tools

= include: a. Coordination of Care/PCP b. Disease Management c. Application of Evidence-Based Clinical Practice Guidelines = Together, these tools foster continuity and accessibility of healthcare services and reduce fragmentation and misuse of resources and facilities. = normally done by the Primary Care Physician

Panel

= is a collection or a group = can be a group of patients or a group of providers

Consolidation

= is a current and increasing trend in the healthcare sector = include activities such as hospital mergers; healthcare system mergers; agglomerations of physicians' practices, nursing homes, and other providers.

Integrated Delivery Systems (IDS)

= is a generic term referring to the collaborative integration of healthcare providers. = financial agreements or contracts or both underpin the legal entity. = is formally defined as "a network of organizations that directly provides or arranges to provide a coordinated continuum of services to a defined population and is able and willing to be held accountable for the cost, quality, and outcomes of care and, (with others), the health status of the population served." = the goal is the seamless delivery of care along the continuum of care. = other terms are health delivery network, horizontally integrated system, integrated services network (ISN), and vertically integrated system.

2) GWW/GPWW = Group (Practice) without Walls or CWW = Clinic Without Walls

= is a group practice where the physicians maintain their separate clinics and offices in a geographic area. = they share administrative systems (such as billing and scheduling) to form the group practice. = is similar to an independent practice association. = the purpose is to gain bargaining power in the negotiation of managed care contracts. = Example: TPMG (Tidewater Physicians Medical Group)

3) Physician-Hospital Organization (PHO)

= is a legal entity formed by a hospital and a group of physicians. = the single corporate umbrella gives this organization the bargaining power when the provider organization negotiates contracts with MCOs. = also fosters the delivery of seamless healthcare to its patients and clients. = Example: Sentara, Bon Secour

5) Medical Foundation

= is a non-profit service organization. = members include physicians, and other healthcare providers. = are typically geographically based, such as local organization or county organization. = have many purposes other than serving as an MCO. = also involved themselves in some aspects of managed care. = have established PPOs, EPOs, and MSOs. = as physician-led organizations, their common characteristics are freedom of choice and preservation of the physician-patient relationship. = Example: may offer continuing medical education for their members

b. Utilization Management (definition)

= is a program that evaluates the healthcare facility's overall efficiency in providing necessary care to patients in the most effective manner. = includes plan that define criteria, timelines, and other aspects of the overall program.

4) Management Service Organization or Medical Service Organization (MSO)

= is a specialized entity that provides management services and administrative and information systems to one or more physician group practices or small hospitals. = may be owned by a hospital, a physician group, a PHO, an IDS, or investors. = the services and systems are infrastructure for the smaller healthcare organizations. Example of services: Patient billing, and Claims Management Example: Paralign

IPA = Independent (Individual) Practice Association or IPO = Independent (Individual) Practice Organization

= is a type of MCO in which participating physicians maintain their private practices.

1) D-SNP

= is a type of SNP plan for duals. = also known as disproportionate percentage SNPs, include some non-duals.

g. Prescription Management

= is also a cost control measure = expands the use of a formulary to a comprehensive approach to medications and medication administration. = specialty management organizations exist to provide the comprehensive service of pharmacy (prescription) benefit management.

IV. EPO (Exclusive Provider Organization)

= is an MCO that is sponsored by self-insured (self-funded) employers or associations. = is very much a hybrid of both HMOs and PPOs. = similar to HMOs, a small network of primary care physicians frequently acts as a gatekeeper. = similar to the system of PPOs, they reimburse providers on a discounted fee schedule. A few however, do reimburse providers through capitation. = Members are influenced to seek healthcare services from in-network providers. = Patients or clients who choose to receive care outside the network receive lower, and in some cases, no reimbursement. = Contracts are created between this organization and providers. = Because they offer greater choice, this type of MCO ensure cost efficiency by aggressively reviewing medical necessity and utilization.

II. PPO (Preferred Provider Organization)

= is an entity that contract with employers and insurers to render healthcare services to a group of members. = also contracts with providers for healthcare services at fixed or discounted rates. = the providers are a network of physicians, hospitals, and other healthcare providers. = members can choose to use the healthcare services of any physician, hospital, or other healthcare provider. However, this type of MCO influences members to use the healthcare services of in-network (in-Plan) providers. = members' cost sharing payments are lower if they use in-network providers; members' cost sharing payments are higher if they use the services of out-of-network (out-of-plan) providers. = this type of MCO may be a separate legal entity, or it may be a functional unit of another MCO, such as an HMO. = may also be a functional unit if a larger indemnity insurer. = the network of physicians, hospitals, and other healthcare providers may sponsor this type of MCO. = this type of MCO offer greater freedom of choice for patients and clients than HMOs. = because there is greater uncertainty about the number of referrals, this type of MCO typically reimburse providers at a higher rate than HMOs.

1) Integrated Provider Organization (IPO)

= is an entity that includes one or more hospitals, a large physician group practice, other healthcare organizations, or various configurations of these businesses. = is the corporate umbrella for the management of an IDS. = Example: CHKD

3) C-SNP

= is for Medicare beneficiaries with severe chronic or disabling conditions (such as end-stage renal disease or amyotrophic lateral sclerosis)

2) I-SNP

= is for institutionalized Medicare beneficiaries

III. POS (Point of Service Plan)

= is one in which members choose how to receive services at the time they need them. = For example: members can choose "at the point of service" whether they want an HMO, a PPO, or a fee-for-service plan. They do not need to make this decision during an open enrollment period. = these healthcare insurance plans are also known as Open-ended HMOs. = patients' cost sharing payments are increased if they receive services outside a referral network (out of network or out of plan).

3. Network Model

= is similar to the group practice model. The difference between this model and the group model is that, this model contracts with two or more independent group practices rather than just one medical group. = has the same advantages and disadvantages as the group practice model, with the added advantage of greater choice for members.

HMO Act of 1973

= is the initiative to control healthcare costs = included in the act were conditions for becoming a federally qualified HMO

2. Functional Integration

= is the integration, across all units in the IDS, of the functions that support the delivery of direct patient care, such as financial management, information systems (IT), human resources, and other support services.

Medicare

= is the primary payer

c. Gatekeeper role of the PCP

= is to control cost. = as the coordinator of all healthcare services that a member may access, this person determines whether referrals are warranted

a. Closed Panel

= means that members of the HMO must seek care inside this group of providers or its contracted providers. = the members are "closed" withing this group of providers. = members must request referrals to use specialists or other providers outside the HMO. = types of HMO in this panel are the Staff Model and Group Practice Model

The Health Maintenance Organization (HMO) Act of 1973

= provided federal grants and loans for new HMOs. = this act initiated the proliferation of several types of managed care organizations.

1) Capitation

= providers are reimbursed a predetermined fixed amount per member per period. Per member per month (PMPM). = the volume of services and their expense do not affect the reimbursement. = typically involves a group of physicians or an individual physician.

1. Staff Model

= provides hospitalization and physicians' services through its own staff. = it owns its facility = its physicians are employees of the HMO and paid on SALARY or on a CAPITATED BASIS. = the most controlled of the HMOs. = Primary Care Physicians strictly control referrals to specialists within the HMO. = members who seek healthcare services outside the HMO receive no compensation for their healthcare costs. = Example: Kaiser Permanente

I. HMO (Health Maintenance Organization)

= represent the most controlled/most restrictive form of MCO because they allow the least amount of freedom in choosing a provider which reduces cost. Offsetting this loss of freedom are the reduced cost sharing payments and wide range of benefits. = combine the provision of healthcare insurance and the delivery of healthcare services. = emphasize preventive care in the belief that in the long term, preventive care saves money by preventing acute illness and chronic conditions.

Provider-Sponsored Organization (PSO)

= similar to point-of-service plan in some respects; however, the PSO differs from the point-of-service plan in that the physicians who practice in a regional or community hospital organize the plan.

Community Rating

= the rates for healthcare premiums are determined by geographic area (community) rather than by age, health status, or company size.

a. Initial Clinical Review

= the responsible party is a licensed health professional = the activity or resource involve review against established criteria

b. Peer Clinical Review

= the responsible party is a peer clinician = the activity or resource involve a clinician (or physician) who is qualified to render clinical opinion performs the clinical review

c. Appeals Consideration

= the responsible party is a qualified expert clinician in the same specialty = the activity or resource involves a clinician who is not involved in the initial decision but is qualified to render clinical opinion can then perform a clinical review

Medical Necessity and Utilization Management

= these cost controls contain and monitor the use of healthcare services by evaluating the need for and intensity of the service prior to it being provided. = are often performed concurrently *study Table 5.3 on page 98

b. Open Panel

= uses incentives, such as increased cost sharing, to influence members to select providers within the plan. = the members are "open" to seeking care outside this group of providers = types of HMO in this panel are Network Model and Independent Practice Model

Goals of Case Management include:

> Continuity of Care > Cost-effectiveness > Quality > Appropriate Utilization

CYU 5.1.5 List two types of MCOs.

> Health Maintenance Organization > Preferred Provider Organization > Point-of-Service Plan > Exclusive Provider Organization Page 102

Types of IDSs along the continuum include the following:

> Hospitals, physicians, and healthcare plans that are owned by or have exclusive contracts with each other, such as: KAISER PERMANENTE and the VETERANS ADMINISTRATION. The VA is the largest integrated delivery system in the US. > Common ownership of hospitals and exclusive staff-model relationships with physicians (no healthcare plan), such as GEISINGER CLINIC and MAYO CLINIC. > Hybrids with both employed physicians and non-employed physicians and with or without healthcare plans, such as ADVOCATE HEALTH CARE and INTERMOUNTAIN HEALTHCARE

HMOs share the following characteristics:

> Organized system of healthcare delivery to a geographic area > Established set of basic and supplemental health maintenance and treatment services > Voluntarily enrolled members > Predetermined, fixed, and periodic prepayments of enrollees

Medicare Advantage (MA) benefits may include:

> Preventive Care > Prescription drug plan > Eyeglasses and hearing aids > Day care, respite care, assisted care, and long-term care insurance > Health transport > Education and health promotion programs

Common characteristics of PPOs:

> Virtual rather than physical entity > Decentralized > Flexibility of choice for members > Negotiated fees (may include discounts) > Financial incentives to induce members to choose preferred option > No prepaid capitation (retains aspects of fee-for-service) > Not subject to regulatory requirements of HMOs > Limited financial risk for providers

The following types of healthcare services are the focus of incentives:

> referrals to specialists > use of laboratory or other ancillary services > inpatient admission or days > settings of care, such as physician's office preferred to emergency department > productivity, in terms of number of visits per day > pharmaceuticals

Healthcare organizational leaders' purposes of consolidation are:

> to increase economies of scale > to gain negotiating leverage > to increase the diversity of business lines

Various forms/3 Categories of cost controls:

A. Service management tools B. Prospective reimbursement C. Financial incentives *study Table 5.2 page 95

CYU 5.2.3 How are IPOs and PHOs similar?

Both types of IDS combine multiple groups of providers together under one corporate umbrella. Page 107

Examples of Positive and Negative Financial Incentives for MEMBERS involve:

For members it can be positive by being offered varying rates of cost sharing For members it can be negative when coinsurance or copayment is higher if they use out-of-network providers. Also having higher copayment for ED visit then urgent care.

Examples of Positive and Negative Financial Incentives for PROVIDERS involve:

For providers it can be positive when they receive bonuses for maintaining low costs For providers it can be negative when it involves reduction in their salary when targets are not met or the loss of withholds (also known as physician contingency reserve or PCR).

CYU 5.2.4 In which type of integrated delivery system do the physicians maintain their separate clinics, but share their administrative systems?

Group (practice) without walls (also known as clinic without walls) Page 107

CYU 5.1.1 What piece of legislation encouraged the growth of managed care organizations in the United States?

Health Maintenance Organization Act of 1973 Page 94

In the US between 1966 and early 1970s, the cost of healthcare has escalated quickly. To control cost and provide affordable quality healthcare, federal legislation encouraged the growth of..

Health Maintenance Organizations (HMOs)

Types of MCOs:

I. HMO (Health Maintenance Organization) II. PPO (Preferred Provider Organization) III. POS (Point of Service Plan) / PSO (Provider Sponsored Organization) IV. EPO (Exclusive Provider Organization)

3 Main Characteristics of MCOs:

I. Quality Patient Care II. Cost Controls III. Prospective Reimbursement Methods

II. Cost Control

Managed Care Plans strive to provide cost-effective care. To achieve this goal, MCOs implement various forms of cost controls.

CYU 5.2.5 With which type of integrated delivery system would a small group practice contract for administrative and information systems?

Management Service Organization Page 107

What type of Medicare is considered Managed Care?

Medicare Part C (Medicare Advantage Plan)

CYU 5.1.4 What types of physicians are generally considered primary care physicians?

Primary Care Physicians are often: > Family practitioners > General practitioners > internists > or pediatricians Page 95

CYU 5.2.1 What is the goal of integrated delivery systems?

Provide seamless delivery of care along the continuum of care Page 106

CYU 5.1.2 How does a member of a staff model HMO obtain coverage for a specialist, such as an oncologist?

To have visits to an oncologist - or any other specialist --- managed care organization (MCO) member obtains a referral from the primary care provider. Page 95

In the 1930s, Kaiser Construction Company established a plan for it's workers. Today, what is it known as and how many members does it currently have?

Today, as Kaiser Permanent, the healthcare plan has more than 10 million enrolled members.

True of False: Managed care came about to manage access, control cost, and provide quality care

True

True or False: The first Blue Cross plan, established in Dallas, Texas, was a form of managed care.

True

CYU 5.1.3 In terms of the health of populations, what type of program, supported by MCOs, stresses the habits of healthy lifestyles, such as exercise and proper nutrition?

Wellness program Page 95

Variations in the amount of freedom members have in selecting providers:

a. Closed Panel b. Open Panel

MCOs and other insurers review medical necessity and utilization in a 3 step process:

a. Initial Clinical Review b. Peer Clinical Review c. Appeals Consideration Table 5.3 on page 98

A. Service management tools: (all of these are put in place to control costs)

a. Medical Necessity b. Utilization Management c. Gatekeeper/PCP d. Prior Approval/Preauthorization e. Second & Third Opinions f. Case Management g. Prescription Management

Health Maintenance Organizations (HMOs)

are health entities that combine the provision of healthcare insurance and the delivery of healthcare services using the principles of managed care.

Withhold

is a part of the provider's capitated payment that the MCO deducts and holds to pay for excessive expenditures for expensive healthcare services, such as referrals to specialists. These transfer the risk to the providers.

Referral

is a process in which a PCP makes a request to a Managed Care Plan on behalf of a patient to send that patient to receive medical care from a specialist or provider outside the Managed Care Plan

a. Coordination of Care

is achieved using a primary care physician (PCP)

Overutilization

is the unnecessary consumption of healthcare services or the consumption of unnecessarily expensive or sophisticated healthcare services.

The origin of managed care can be traced back to

the early 1900s.

The purpose of Managed Care is

to provide affordable, high-quality healthcare.