Why is managed care a broad term

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What is managed care? This, too, helps to manage your care. Quite often, as part of a prior authorization, your insurer will ask for additional information from your provider before deciding to approve it or not. This helps them understand the medical need for a more costly treatment, a certain surgical procedure, or a specialty medication, for example. Prescription drug tiers: If you have prescription coverage, your health plan may provide more coverage for generic medications than brand names.

This is another common feature of managed care plans. Generics typically have the same formula and the same active ingredients, but they cost much less. This furthers the goals of managed care, which is to help keep costs lower, while still ensuring you receive quality care and equally effective medications.

What are types of managed care plans? Here are the basic types of managed care organizations or plans: Health Maintenance Organization HMO manages care by requiring you to see network providers, usually for a much lower monthly premium. HMOs also often require you to see a PCP before going elsewhere, and do not cover you to see providers outside the network. HMOs cost less, but offer less flexibility. Preferred Provider Organization PPO gives you the option to see any doctor you like, in- or out-of-network.

You may pay less in-network, though. There may be no requirements to get referrals from a PCP, either. For this flexibility, your costs are usually higher. You get the flexibility to see in- or out-of-network doctors like a PPO, but your share of the costs will be higher.

Goal of a POS is similar—offer you options, while still managing to keep costs lower. How does managed care work? How to Choose the Right Plan. By evaluating the patient health outcomes, the providers are held to a minimum standard and if their services do not meet these standards, the providers do not get paid.

This saves the entire health economy from paying for subpar health services. This is further shown in the reimbursement model for episode-of-care payments, or bundled payments. An episode-of-care is the care a patient receives by a healthcare provider or health system for a specific illness, condition, or problem over a specific timeframe.

A single payment is received for an episode-of-care. The provider is responsible for deficits that may raise the cost of the care provided. In some cases, this may include the cost of readmittance to a health facility for additional treatment for a length of time after discharge.

An example of an episode-of-care is pregnancy and delivery. In a fee-for-service model, care is paid in a piecewise fashion with little incentive to coordinate the care. In an episodes-of-care approach, the patient has inclusive care during pregnancy, delivery, after delivery for the mother, and after delivery for the baby. The incentive of great care during pregnancy is ensuring healthy birth weights for the baby upon delivery.

Value-based-care promotes continuity of care and tries to bridge many different aspects of healthcare. This encourages a team-oriented approach to patient care. By implementing this model, we can ensure that the best quality services are provided to patients for a lower cost. Managed care is a broad term that encompasses many types of insurance plans and organizations.

The different types of managed care options differ in their cost and coverage of services. However, the common trait between these organizations is to keep costs low while still providing effective patient care.

All valuing cost-effective patient care, these managed care plans vary in patient autonomy, coverage of services, and cost. All services utilized outside of the network are not covered by the HMO plan. When in need of a medical specialist, the patient must receive a referral from the primary care provider.

By keeping the patient within the network, the managed care plan can guarantee a standard of care at a lower cost. PPO, or Preferred Provider Organization, gives the patient more flexibility and autonomy in choosing where they want to receive healthcare services. Many plans have penalties if a member receives care without pre-certification, and some won't pay benefits if pre-certification isn't obtained.

Pre-existing condition PEC : Any medical condition that has been diagnosed or treated within a specified period of time before the member's effective date of health coverage. Treatment may be excluded or limited for a set amount of time, after which these conditions would be covered. Preferred provider organization PPO : A group of healthcare providers that contract with an employer or other entity to provide certain healthcare services at a discounted rate.

Usually, the benefit contract provides much better benefits for services received from these preferred providers. Covered persons are usually allowed benefits for non-participating providers' services at a reduced level. Providers are usually reimbursed on a discounted fee-for-service basis. The PPO providers benefit from increased market share of patients.

Many PPOs lease their networks to a variety of insurance companies in one geographic region, and they may be fully insured or offered on a self-funded basis. Preferred provider : Physicians, hospitals and other healthcare providers who contract to provide healthcare services to persons covered by a particular health plan. See preferred provider organization PPO. Primary care : Basic health care provided by pediatricians, family practice physicians and internal medicine doctors that focuses on preventive care and differs from healthcare services provided by specialists.

Primary care physician : Often referred to as a "gatekeeper physician," this physician is usually the first healthcare provider a person sees for an illness or injury. PCPs are devoted to internal medicine, gynecology, family practice or pediatrics.

Prior authorization : This is the process of obtaining prior approval by a health plan as to the appropriateness of a service or medication. This process doesn't guarantee coverage or ensure that benefits will be paid. Provider : A physician, hospital, nursing home, pharmacy, or any individual or group that provides healthcare services or supplies.

Most insurers pay a percentage of the "reasonable and customary" fees, while the insured individual is responsible for paying any amount charged over this "reasonable and customary" fee.

Referral : Authorization by the health plan to send a member to another provider, including specialists and hospitals. Referral requests are made by participating health providers and approved by the primary care plan's medical directors. Referral provider : Physicians who provide services to patients who are referred to them by a participating provider in the health plan.

Second opinion : An opinion obtained from an additional healthcare professional prior to the performance of a medical procedure or service.

This may be a mandatory, formal process, which is used to educate the patient, seek alternative treatments, and determine the medical necessity of the care. Standard benefits package : A specific set of healthcare benefits that would be offered by an integrated delivery system. This could include preventive care, hospital and physician services, prescription drugs, long-term care, and mental health services.

Subscriber : The individual who's responsible for the payment of premiums through the employer or directly to the health plan. Also, the person who's the primary member forming the basis for eligibility for membership in an HMO or other health plan. Third-party administrator TPA : An organization that provides administrative services, including claims processing and underwriting for other entities, such as insurance companies and employers.

TPAs are used by organizations that actually fund the health benefit costs but find it more cost effective to outsource the administrative functions. Workers' compensation : The state-governed system that addresses work-related injuries and illnesses. Under this system, employers assume the cost of medical treatment and lost wages due to an employee's job-related injury or illness, regardless of who is at fault. Common managed care terms and definitions.