Managed Care Overview

What is Managed Care?

Managed care is a complex system that involves the active coordination of, and the arrangement for, the provision of health services and coverage of health benefits.
The most common types of Managed Care Organizations (MCOs) include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Exclusive Provider Organizations (EPOs.)
Managed care usually involves three key components: oversight of the medical care given; contractual relationships and organization of the providers giving care; and the covered benefits tied to managed care rules.

In contrast, what is traditional health care?

Traditional health care is most identified with freedom of choice for patients and physicians. Patients can choose whatever physician they want to see, physicians can choose to order whatever services they feel are necessary.
Health Plans are mostly passive third parties, paying for all the services a physician orders, at the provider’s usual charges.
A Health Plan’s costs and premiums are based on prior experience and covered benefits of the population insured. There is no way to fix medical costs or know exactly what they’ll be in the future.
After medical services are rendered by providers, the health plan is billed, and patients must pay the difference between provider’s charges and what their health plan pays.

How are managed care health plans typically selected and paid for?

Large Employer Groups

Small Groups & Individuals

Medicare

Plan Selection

Employer get quotes from various plans (Benefit consultants or coalitions may arrange quotes and negotiate selections )

Employer Selects Multiple Plans

Employees select a plan from Employer list

Plan Selection

Owner or Individual get quotes from various plans (Agent may arrange quotes)

Owner or Individual selects a plan for themselves or their business

Plan Selection

Government contracts with Plans

Contracting Plans market to Medicare Consumers

Interested Medicare consumers select from list of available Plans

Payments

Employer pays each contracted plan premiums for covered employees

Employer withholds contribution from employee paychecks

Members pay copayments and other out-of-pocket expenses when they see providers

Payments

Individual/Employer pays plan premiums

Small Groups withhold contribution from employee paychecks

Members pay copayments and other out-of-pocket expenses when they see providers

Payments

Government pays each contracted plan premiums for covered person

Medicare members pay plan any additional required premium

Members pay copayments and other out-of-pocket expenses when they see providers