In a time in which healthcare providers, payers, insurers and the government are all looking for ways to reform healthcare through lower prices and higher quality of service, it’s no surprise that new ideas and strategies are gaining traction in the industry. One common healthcare delivery method that has been popular in recent years is known as managed care, and it has gained popularity particularly with the government for its potential cost-saving and outcome-enhancing methods. Read on to learn about managed care and how it’s changing the healthcare industry.
What Is Managed Care?
Managed care is a healthcare delivery system that seeks to lower costs and improve outcomes through the use of a network of providers working together to support patients’ overall wellness needs. It is unlike the Fee-for-Service method, in which patients and insurance companies pay directly for whatever services physicians provide (which can lead to overpricing and providing unnecessary services). It’s also unlike Value-Based Care, in which payment is dependent on care quality rather than quantity. Under this model, prices and reimbursement are often set on a per capitation, or per-person, basis in a managed care organization (MCO), resulting in more predictable costs. Managed care agencies select a network of providers for patients to see and write out contracts with these providers that include reduced fees and care accountability. There are many forms of managed care scenarios, such as a Health Maintenance Organization (HMO), a Preferred Provider Organization (PPO) and a Point of Service plan that allows flexibility in working between the previous two.
In an HMO, the patient works with providers and insurers in a single network to receive care and receives lower cost of care as a result. While this does make getting healthcare cheaper for the payer, this also means that insurance won’t cover out-of-network costs in most cases. A PPO is similar to an HMO, but is more flexible when it comes to where the patient receives treatment (and therefore more costly). Insurance in this case will pay for out-of-network costs, but the costs will be lower and incentives higher for staying in-network. A Point of Service plan lets you choose whether you want to use an HMO or a PPO when you have healthcare needs.
How Does Managed Care Impact A Healthcare Organization?
Healthcare organizations are always looking for ways to improve patient experiences, lower the cost of care and keep themselves financially stable. The insurance and payment models they adopt in order to do this depend on how they operate, on the cost of care, on the needs of their communities, on their revenue cycle management strategies and much more. Managed care is meant to unite healthcare professionals of all kinds in order to provide a cheaper and more holistic approach to healthcare.
Since an MCO bundles hospitals, clinics, primary care offices and specialized medical practices into one unified group, there are many ways to experience healthcare under this model, though prices should remain consistent. Being treated in-network means reduced costs for patient and provider alike and a more restricted network of healthcare professionals who are able to provide care. And because many people who receive health insurance through their employers do so through an MCO, it gives patients simpler, if sometimes restrictive, options for finding care.
Managed Care Organizations and Medicaid
Many individuals who rely on Medicaid for their healthcare are enrolled in managed care scenarios. This involves states making contracts with private healthcare organizations to provide care to Medicaid enrollees, with states paying a set amount of money to these organizations per patient, known as comprehensive or capitated care. It’s easier on states to do this because it leaves the finer and more technical details of providing patient care to their providers, under the assumption that people in the healthcare field will know better than states how to manage patient experiences and outcomes.
As of July 1, 2019, 40 states including D.C. rely heavily on MCOs to provide Medicaid-subsidized care to patients. Approximately 40 percent of Medicaid patients are enrolled in MCO plans. However, many of these patients are those who require long-term and more expensive care, which becomes a funding issue that healthcare organizations must maneuver their way through. Using MCOs for Medicaid care has improved the predictability of healthcare organization operating budgets, but it has not entirely improved the funding issues that many are facing.
Medicaid costs are rising and passing by the cost of public education to be one of the biggest spending and debating points in the federal government. Because of this and the set reimbursement amounts that healthcare organizations receive per patient, it’s easy to see how even with this model, these organizations continue to struggle to make ends meet. Even with shifts in finances and the MCO model, maneuvering through the logistics and regulations of Medicaid can be difficult for a healthcare organization.
How Can DECO Help?
We understand the ins and outs of healthcare reimbursement and revenue cycle management. We’ve worked with many healthcare organizations and many forms of reimbursement to create sustainable and forward-moving solutions for care provision, and we understand the challenges of the healthcare field. Our staff is well-trained and knowledgeable and can help provide answers on the front lines of the medical field, addressing both patient and provider concerns. Additionally, our proprietary computer network is flexible enough to cater to your healthcare organization’s overall revenue needs.
We advocate for the needs of patients and get their information in order to set them on the right financial path. At the same time, we work with clinical staff to determine best courses of action for the organization as a whole, especially when it comes to getting reimbursed for services rendered by the government and managing revenue. If your healthcare organization needs answers on how to improve outcomes and lower costs, whether you’re in an MCO or not, contact us today!