Managed Care Plans (MCP)
The term "Managed Care Plan" is used to describe a type of healthcare focused on helping to reduce costs while keeping quality of care high.
In other words, a manage care plan is a healthcare delivery model used by insurance companies to design various types of health plans that aim to control costs, improve care quality, and tailor coverage to meet different individual's needs.
Managed Care Organization (MCO)
A MCO is indeed a healthcare company or health care plan that utilizes a managed care model to manage health cost while striving to maintain or improve the quality of care. These organizations work to coordinate and manage health care services for their members, often through networks of contracted providers (In-network providers).
Who can be MCO?
Any insurance company/payer (private + Gov.) that uses managed care plan model to make new plans or provide care coverage called MCOs. Normally private insurance companies coordinate with Medicaid agencies to make new coverage plans or provide care, are also called MCO. Like BCBS or Cigna can also be MCOs in most cases.
Features of Managed Care Plan
- Provider Network
Health care companies contract with group of providers including hospital, clinics, healthcare centers, etc. to offer their plan members reduced /negotiated rates on services. In short, in network providers used to provide low cost health care services
- Preventive Care
Preventive care refers to medical services designed to prevent diseases or catch them early, before symptoms appear. The preventive care services are covered at 100% by a managed care plan to keep their members healthy.
- PCP (Primary Care Physician)
Managed Care Plans require patients to choose PCP if patients don't already have one. And patients may be required to see PCP first before going to any other doctor or specialist.
- Utilization Management
This involves reviewing and approving certain health care services (like surgery or other specialized medication) before they are provided to ensure they are medically necessary and appropriate.
- Cost-sharing
Managed Care organizations (MCOs) may be required, their members to pay PR (patient responsibility) for the certain services, which can encourage them to be more mindful of health care cost and help MCOs to manage cost risks.
Managed Care Plan Types
Here are the basic types of manager organizations or plans.
- Health Maintenance Organization (HMO)
HMO is a low cost plan (typically lower monthly or annually premium and out of pocket cost) with some restrictions. HMO manages care by requiring patients to see in network providers and also have to choose PCP within the network for care coordination. Patients have to see a PCP first and can go to in network specialist or other health care professionals with PCP referral only and out of network providers care is not covered except in emergence. Preventive Care services are covered at 100%
In short, HMO requires PCP must, can go to in network specialists with PCP referral. Cost less but offer less flexibility. - Preferred Provider Organization (PPO)
PPO is high cost plan (typically higher premiums per month and deductibles) with more flexibility without restrictions like HMO. In PPO patient can go to both in and out of network providers, no PCP required nor referral. Patient can go directly to any specialist or healthcare professional. But note, if a patient goes to out of network provider, the patient may have to pay higher cost sharing as compared to in-network. Preventive Care services are covered at 100%
In PPO, insurance companies will provide a list of doctors (including specialists) that are in network with the insurance to patients, such a list called provider directory.
In short, PPO is high cost plan with higher flexibility, no PCP nor referral required and patient can go to any in-network provider directly as well as out of network if benefits are available. - Exclusive Provider Organization (EPO)
EPO is a mid-range plan typically higher cost than HMO but lower than PPO. Like HMO, patients can go to in-network providers, hospitals and specialists and not covered out of network services / visit except in emergency but like PPO patient do not need to choose PCP nor obtain referral for specialists. With EPO, patients can see any provider (including specialists) within the network directly.
In short, patient can go any in-network provider directly no PCP nor referral required but out of network services are not covered except in emergence. - Point of Service (POS)
POS plans are the combination of both HMO and PPO. Patient can go to both in and out of network providers, hospitals, and facilities but often required to choose a PCP who will manages care and provide referrals for specialist.
Note: Patient have to pay higher cost share if use out of network care and also POS requires referral for covering specialist care. The POS has typically higher premiums and deductible then HMO but lower than PPO.
Metallic Tiers
There are four tier levels, bronze, silver, gold, and platinum. These tier levels indicate how the health care cost are split between the insurer and the insured or in other word, how much your health care cost will be covered by your insurance company.
Let's break down further:
| Tier | %per Ins. Paid | %per Pat. Paid | Description |
|---|---|---|---|
| Bronze | 60% | 40% | Bronze low monthly premium but higher out of pocket cost, best if you rarely need care. |
| Silver | 70% | 30% | Silver moderate premiums, and cost sharing. Eligible for cost sharing reduction. |
| Gold | 80% | 20% | Gold higher monthly premiums but lower out of pocket costs. Good if you need regular care. |
| Platinum | 90% | 10% | Platinum highest monthly premiums with the lowest out of pocket cost. Good if you have a certain disease that needs continuous care. |
Differentiate between MCP and Metallic Tiers
Managed Care Plan is a healthcare delivery model, describes how healthcare coverages / benefits are provided to the patient while metallic tiers indicate how much health care cost will be covered by insurance company according to the contracted percentage.
Note: Health insurance uses these two frameworks to create a range of plan options, allowing individuals / patients to select a plan that meets their desired coverage, potential out of pocket expenses, and provider access.
For example, a plan might be a PPO with a gold metal tier, offering a balance of network flexibility with less cost sharing (80% / 20%).
Is every healthcare plan created with Managed Care Plan Models?
No, every insurance plan is not created with Managed Care Plan Models, some have other coverage styles which makes them very costly. we will discuss in upcoming chapters.
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