Practice Management
What Should You Do About Managed Care?
Many physicians in heavily penetrated managed care markets have found
that managed care requires changes in the way they practice medicine.
Practices with large numbers of MCO patients have larger staffs including
medical technicians, medical assistants, LPNs, RNs, and physician assistants.
Collectively, they provide a team approach to managing patient care.
In this fashion, other providers attempt to relieve physicians of the
tasks that need not be performed by a licensed physician. There is an
increased reliance on clinical protocols that help determine the course
of patient care. Physicians with excellent clinical judgment and efficient
operations are able to flourish economically in a managed care setting
that rewards them for appropriate resource use and for their efficiency.
As a new physician entering a practice, it is important that you start
to learn the behaviors that are rewarded in managed care and the actions
that are discouraged. Joining a group that has experience in managed
care contracting is certainly the best way to develop a greater understanding
of appropriate managed care behavior.
Types of Managed Care Organizations
Today, some health maintenance organizations (HMOs),
which formally required their enrollees to use only
a preselected group of participating providers, now
allow their members to use nonparticipating providers.
On the other hand, some preferred provider organizations
(PPOs), which historically offered their members unlimited
choice of physicians and other health care providers,
have implemented primary care case management (gatekeeper)
systems and have added elements of financial risk.
Many traditional indemnity (self) insurance plans
have added utilization management features such as
pre-authorization requirements to their plans. In addition,
new hybrid models of MCOs have begun to emerge. The
types of MCOs vary based on which physicians may provide
care to enrollees, the degree to which patient care
is directed by a selected primary care physician, and
the extent to which the MCO exercises control over
clinical decision making.
Health Maintenance Organizations
HMOs are organized health care systems responsible
for both the financing and the delivery of a broad
range of comprehensive health services to an enrolled
population. Traditionally, HMOs financed health care
for a prepaid fixed fee (premium) with little or
no additional cost to the patient. Common HMO models
include:
- Staff—Physicians are employed by the
HMO to serve its members and paid a salary with bonus
payments based on performance and productivity.
- Group—The HMO contracts with a physician
group practice which frequently is the exclusive
provider of physician services to HMO members. Physicians
are not HMO employees.
- Network—The HMO contracts with many
group practices to provide services to its members.
- Individual Practice Association (IPA)—The
HMO contracts with a pre-formed association of physicians
(the IPA) to provide services. Physicians join the
IPA, a legal entity separate form their own practices,
but remain individual practitioners and continue
to see their non-HMO patients. They also maintain
their own offices, medical records, and support staff.
- Direct Contact—The HMO contracts with
individual physician practices. Preferred Provider
Organizations (PPOs) PPOs are networks of physicians,
hospitals, and other providers with which employer
health benefit plans and health insurance carriers
contract to purchase health care services for covered
beneficiaries.
Preferred Provider Organizations (PPOs)
PPOs are networks of physicians, hospitals, and other providers with
which employer health benefit plans and health insurance carriers contract
to purchase health care services for covered beneficiaries.
The hallmark of PPOs is patient choice: PPO members can usually use
non-participating physicians, but have financial incentives (lower out-of-pocket
costs) to use participating physicians. Some PPOs select participating
physicians in the basis of strict criteria, such as cost efficiency,
community reputation, and scope of services, while others are open to
any physician willing to participate.
Exclusive Provider Organizations (EPOs)
EPOs are similar to PPOs in organization and purpose, consisting of a
network of physicians, hospitals, and other providers who have agreed
to accept the EPOs payments for services provided to its beneficiaries.
Employers trying to lower costs usually implement EPOs. Note that an
EPO grants an exclusive right-of-care to a single group. For this reason
they are most common in the carve-out areas of care, which include
cardiac care, vision/eye care, mental health, imaging, and orthopaedic
care.
EPO enrollees generally either do not have any coverage for services
provided by non-participating physicians, or have coverage only to a
very limited and expensive extent.
In some EPOs, members must use a primary care gatekeeper who authorizes
all other services. In others, members are free to initiate care with
any participating physician.
What You Need From Managed Care Organizations
The typical HMO combines the financing and the delivery
of health care services into a single organization.
The usual mechanism for this is the contract. Therefore,
any agreements between the managed care plan and he
actual providers of health care services must be reduced
to writing, negotiated, and renegotiated, perhaps annually.
The negotiating process is important to the ultimate
success of any managed care plan, because the terms
of the plan's agreements with providers are decided
through this process, and these terms strongly affect
whether the plan can compete successfully in the marketplace.
A managed care plan that fails to obtain effective
participation agreements from a sufficient number of
providers—or that fails to negotiate favorable
reimbursement arrangements with its providers—will
not attain its financial and market objectives, and
ultimately may be financially unstable.
Thus, beyond deciding to be more involved in managed
care, you must perform a "due
diligence" analysis of the MCOs in your area to
assess the MCO under consideration.
Contact membership@acc.org;
800-253-4636, ext. 5603; 202-375-6000, ext. 5603
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