Managed Care Plans is also called as Health Insurance Plans. It is a system that controls the financing and delivery of health services to members who are enrolled in a specific type of health care plans.
Overview of Managed Care Plans:
- Liability is always a fixed amount (Co-pay).
- Operates mainly with network of providers.
- Only participating providers render the service.
- Referral Authorization Number plays an important role.
- Mainly focuses on preventive medicine.
The goals of Managed Care plans is to ensure that
- Providers deliver high-quality care in an environment that manages or controls costs.
- The care delivered is medically necessary and appropriate for the patient’s condition.
- Care is rendered by the most appropriate provider.
Types of Managed Care Plans:
- HMO-Health Maintenance Organizations
- PPO-Preferred Provider Organizations
- POS-Point of Service
Let us discuss step by step about characteristics and difference between HMO, PPO and POS to understand more about managed care plans.
Health Maintenance Organizations (HMO):
- An HMO enters into contractual arrangements with health care Professionals.
- In HMO Managed Care plan, members have to see only network providers listed to have their healthcare paid.
- HMO won’t encourage Out of Network Provider. It means they won’t pay for Health care, if the member receives services from out of network provider unless if it is an Emergency or Pre-Authorized by the HMO.
- A member has to select Primary Care Physician (PCP) in HMO, often called a gatekeeper. Gatekeeper is the one who provides, coordinates and authorizes all aspects of the member’s health care services.
- If the member sees a specialist without a referral from PCP, the HMO won’t pay for the care. Members can only visit specialist after getting authorization by PCP. So referral is must and plays an important role in HMO plan to see a Specialist.
- HMO provides a health benefits for lower cost.
- This plan is more restrictive than all other plans, for members to select the health care providers.
Preferred Provider Organizations (PPO):
- In PPO members don’t have to visit PCP nor do they have to use an in-network provider for their health care services.
- PPO offers higher reimbursement with lower deductibles and co-payments, if member use In-Network providers.
- Members typically don’t have to get a referral from PCP to see a specialist. However, as mentioned above, there are higher reimbursements to use a PPO’s provider network.
- In this PPO plan, “Out of Pocket” payment is high.
- In this member can choose their own health care providers, as they are less restrictive than HMO’s in the choice of health care provider.
Point-Of-Service Plans (POS):
- In this plan, member will choose HMO or PPO option at the time of healthcare service. This is the reason this plan is called as point of service.
- Point of Service (POS) managed care plans encourage, but don’t require members to choose a primary care physician (PCP).
- Even this plan has a contracted provider network like an HMO and PPO.
- If the member opts to visit an Out of Network provider, then member has to pay high copay, coins and deductible.
- POS plans offer more flexibility and popular than HMO and PPO.
Conclusion: As we stated in our previous article medical billing process we have covered the most important concept that is types of Managed Care plans (HMO, PPO, and POS) and difference between HMO and PPO of United States