The distinction between health care providers and health care insurers have blurred substantially 10 Years ago managed care organizations were often referred to as alternative delivery systems Managed care is now the dominant form of health insurance coverage in the United States Managed care can mean managing the provider delivery system can be equivalent in its outcomes to managing the medical care delivered to the patient Managed care may not perfectly describe this current generation of financing vehicles, it provides a convenient shorthand description for the range of alternatives to traditional indemnity health insurance On one end of the continuum is managed indemnity with simple pre-certification of elective admission and large case management of catastrophic cases, superimposed on a traditional indemnity insurance plan Further along the continuum are PPOs, POSs, open-panel [individual practice association (IPA) type] HMOs, and closed-panel (group and staff model)
HMOs are organized health care systems that are responsible for both the financing are the delivery of a broad range of comprehensive health services to an enrolled population HMO health insurer and a health care delivery system HMOs are responsible for providing health care services to their covered members through affiliated providers, who are reimbursed under various methods HMOs must ensure that their members have access to covered health care services HMOs generally are responsible for ensuring the quality and appropriateness of the health services they provide to their members The five common models of HMOs are staff, group practice, network, IPA, and direct contact PPOs PPOs are entities through which employer health benefit plans and health insurance carriers contract to purchase health care services for covered beneficiaries from a selected group of participating providers PPOs often limit the size of their participating provider panels and provide incentives for their covered individuals to use participating providers instead of other providers In contrast to individuals with traditional HMO coverage individuals with PPO coverage are permitted to use non-PPO providers PPOs sometimes are described as preferred provider arrangements (PPAs) PPA is used to describe a less formal relationship than PPO
The term PPO implies that an organization exists, whereas a PPA may achieve the same goals as a PPO through an informal arrangement among providers and payers Key common characteristics of a PPO include: Select provider panel Negotiated payment rates Rapid payment terms Utilization management Consumer choice Exclusive Provider Organizations Exclusive provider organizations (EPOs) limit their beneficiaries to participating providers for any health care services The EPO generally does not cover services received from other providers, although their may be exceptions EPOs, like HMOs, require exclusive use of the EPO provider network and also use a gatekeeper approach to authorizing non-primary care services The difference between an HMO and an EPO is that the former is regulated by HMO laws and regulations, and the latter is regulated under insurance laws and regulations Employee Retirement Income Security Act of 1974 EPOs usually are implemented by employers (b/c its cost efficient) POS Plans Hybrids of HMO and PPO models.
Characteristics include: Primary care physician are reimbursed through capitation payments (i.e. Fixed payment per member per month) An amount is with held from physician compensation that is paid contingent upon achievement of utilization or cost targets The primary care physician acts as a gatekeeper for referral and institutional medical services The member retains some coverage for services rendered that either are not authorized by the primary care physician or are delivered by non-participating providers Open Access or POS HMOs Provides some level of indemnity-type coverage along with the HMO coverage HMO members covered under these types of benefit plans may decide whether to use HMO benefits or indemnity-style benefits for each instance of care The member is allowed to make coverage choice at the point of service when medical care is needed Most POS plans experience between 65 percent and 85 percent in-network usage, thus retaining considerable cost control compared to indemnity-type plans There are two primary ways form an HMO to offer POS option 1) Via a single HMO license a. HMO provides the out-of-network benefit using its HMO license 2) Via a duel-license approach a. The health plan uses an HMP license to provide the in-network care and an indemnity license to provide the out-of-network coverage b. More flexible Coverage under HMO POS plans recently has been the fastest growing segment of health insurance Self-Insured and Experience-Rated HMOs.
The federal HMO Act originally mandated community rating for all HMOs that decided to pursue federal qualification Under a typical self-insured benefit option, an HMO receives a fixed monthly payment to cover administrative services (and profit) and variable payment that are based on the actual payments made by the HMO for health services Under experience-rated benefit options, an HMO receives monthly premium payments much as it would under traditional premium based plans The HMO regulations of some states and federal HMO qualification regulations preclude HMOs from offering self-insured or experience rated benefit plans Specialty HMOs Specialty HMOs serving other health care needs (e.g. mental health) have also developed in certain stated where they are permitted under the insurance or HMO laws and regulation Managed Care Overlays to Indemnity Insurance Managed care overlays have developed that can be combined with traditional indemnity insurance, service plan insurance, or self-insurance The term indemnity insurance is used to refer to all three forms of coverage in this context The following types of managed care overlays currently exist General utilization management complete menu of utilization management activities selected by individual employer or insurers Specialty Utilization management Catastrophic or large case management (regardless of specialty involved).
Workers compensation utilization management to address the unique needs of patients covered under workers compensation benefits Physician-Hospital Organizations Physician-hospital organization (PHOs) are organizations that generally are jointly owned and operated by hospitals and their affiliated physicians A vehicle for hospitals and physicians to contract together with other managed care organizations to provide both physician and hospital service Physicians and one or more hospitals are shareholders or members PHOs can offer several advantages for providers who develop them They may increase the negotiating clout of their individual members with managed care organizations They provide a vehicle for physicians and hospital to establish reimbursement and risk-sharing approaches that align incentives among all providers They can serve as a clearinghouse for certain administrative activities, including credentialing and utilization management, thereby reducing the administrative burden on their individual physician and hospital members They provide an organized approach for physicians and hospitals to work to …
