Managed Care Health Insurance

The United States healthcare system has changed profoundly over the past few years. Those changes helped to slow the rise in health care costs, which from the mid-1960s to the early 1990s leaped up to double-digit levels. Employers who were providing insurance benefits to most Americans quickly turned to managed-care programs after being faced with the rising costs of health care (Health Care: Overview, 2007, par.1). Statistics show that in 1996, about 60 percent of Americans were enrolled in some sort of managed healthcare plan which was a 36 percent increase from 1992 (Froomkin, 1998, par. 4).

There are three basic types of managed care plans. These plans consist of Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Point of Service (POS) plans. There are a number of important differences between the different types of managed care plans, but there are numerous similarities as well. All managed care plans have an arrangement between the insurer and a selected network of health care providers. Policyholders are all offered significant financial incentives to use the providers in that network. There are usually specific standards in place for selecting providers as well as formal steps to ensure that quality care is delivered (Indemnity vs. Managed Care, par. 7). Individuals can join a managed care plan through their employer's health benefits program or as an individual by buying their own insurance policy. Once someone joins a plan, they are referred to as a "member" of that plan (Managed Care, par. 8-9).

Health maintenance organizations are a type of managed healthcare system. HMOs along with preferred provider organizations (PPOs), share the goal of reducing healthcare costs by focusing on preventative care and implementing utilization management controls. HMOs provide medical treatment on a prepaid basis. This means that members of an HMO pay a fixed monthly fee, regardless of how much medical care is needed in a given month. In return for this fee, most HMOs provide a wide variety of medical services, which may include office visits, hospitalization, and surgery. HMO members must receive their medical treatment from physicians and facilities within the HMO network. The size of this network varies depending on the individual HMO. When an individual joins an HMO, they are able to choose their primary care physician. Their primary care physician provides any general medical care the individual may need. Advantages of health maintenance organizations include low out of pocket costs, they focus on wellness and preventive care, and there is typically no lifetime maximum payout. Some disadvantages are that there are tight controls that can make it more difficult to get specialized care and care from non-HMO providers are generally not covered (HMOs, PPO & POS Plans, par.1-9).

A preferred provider organization (PPO) is also a type of healthcare organization. PPOs consist of a group of doctors and/or hospitals that provide medical services to only a specific group or association. PPOs may be sponsored by a particular insurance company, by one or more employers, or by some other type of organization. PPO physicians provide medical services to policyholders, employees, or members of the sponsor (employer or insurance company), at a discounted rate. PPO members pay for services as they are rendered. The PPO sponsor generally reimburses the cost of the treatment to the member, less any co-payment percentage. The physician sometimes may submit the bill directly to the insurance company for payment and the insurer then pays the covered amount directly to the healthcare provider, and the member pays his or her co-payment amount. The healthcare providers and the PPO sponsor negotiate the prices for each type of services in advance. Advantages of preferred provider organizations are that individuals are not required to seek care from PPO physicians and healthcare costs paid by individuals are limited. Disadvantages include less coverage for treatment that is provided by non-PPO physicians and PPO members have to fill out their own paperwork (HMOs, PPO & POS Plans, par.10-16).

A Point of Service (POS) plan is a type of managed healthcare system that combines characteristics from both health maintenance organizations and preferred provider organization plans. Like HMOs, Point of Service plans have no deductibles and there is usually only a minimal co-payment when individuals use a healthcare provider that is within their network. PPOs allow individuals to choose their primary care physician. They may go outside of the network for healthcare, but will likely be subject to a deductible and their co-payment may increase. Advantages include maximum freedom, minimal co-payment, no deductible, no "gatekeeper" for non-network care, and out of pocket costs are limited. Disadvantages include increased co-payment and deductibles for non-network care (HMOs, PPO & POS Plans, par. 17-24).

Upon a patient's arrival to the office, the Administrative Medical Assistant should verify insurance coverage and collect co-payment before the patient's appointment. The patient should be carefully questioned about preauthorization requirements. If prior authorization has been required for a certain medical procedure, then the MA should inform the patient and process the authorization. If the patient has received authorization for the service the authorization number should then be obtained. Services that are rendered to the patient should be checked off on an encounter form. A copy should be made and kept in the physician's files and the original copy should be forwarded to the health plan's administrative office (Fordney, Follis, & French 363-364).

References

Fordney, M. (2006). Insurance Handbook for the Medical Office. St. Louis: Elsevier Inc.

Fordney, M., Follis, J., & French, L. (2004). Administrative Medical Assisting. New York:
Delmar Learning.

Froomkin, D. (1999). Backlash Builds Over Managed Care. Retrieved July 18, 2007, from: http://www.washingtonpost.com/wp-srv/health/policy/managedcare/overview.htm

Health Care:Overview. (2007). Retrieved July 18, 2007, from: http://www.publicagenda.org/issues/overview.cfm?issue_type=healthcare

HMOs, PPO & POS Plans. Retrieved July 18, 2007, from: http://www.agencyinfo.net/iv/medical/types/hmo-ppo-pos.htm

Indemnity vs. Managed Care. Retrieved July 18, 2007, from: http://www.agencyinfo.net/iv/medical/types/indemnity-managed.htm

Managed Care (2007). Retrieved July 18, 2007, from: http://www.aarp.org/health/insurance/managed_care/a2003-04-21-hmooverview.html