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Dr. Shahram Yazdani Managed Care
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Dr. Shahram Yazdani Managed Care. Dr. Shahram Yazdani What is Managed Care? Some say: 1. Patient health is being managed 2. Physician behavior is being.

Jan 15, 2016

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Page 1: Dr. Shahram Yazdani Managed Care. Dr. Shahram Yazdani What is Managed Care? Some say: 1. Patient health is being managed 2. Physician behavior is being.

Dr. Shahram Yazdani

Managed Care

Page 2: Dr. Shahram Yazdani Managed Care. Dr. Shahram Yazdani What is Managed Care? Some say: 1. Patient health is being managed 2. Physician behavior is being.

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What is Managed Care?

Some say:1. Patient health is being managed

2. Physician behavior is being managed

3. Patient behavior is being managed

4. Health care institutions are being managed

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What is Managed Care?

All are correct In managed care, everything is being

managed by the managed care organization (MCO)

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Managed Care

In the broadest terms, Kongstvedt (1997) describes managed care as a system of healthcare delivery that tries to manage the cost of healthcare, the quality of that healthcare and access to that care.

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Managed Care

A “managed care” system defines the framework within which a service system’s three principal players (the payer, the service providers, and consumers) interact.

A “managed system” is distinguished from an “unmanaged system” by defining these interactions globally rather than in a piecemeal fashion.

A managed system is organized to achieve key goals and objectives in a systematic fashion.

These goals and objectives typically include cost containment, improved productivity, and better targeting of resources.

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Characteristics of Managed Care

Managed care is a system that integrates the financing and delivery of appropriate medical care by means of:

1. Contracting selected MDs & hospitals to furnish comprehensive care

2. Setting a predetermined monthly, premium fee for services,3. Incorporating financial incentives to encourage patients to use

only resources in the plan.4. Having physicians assume some financial risk for their work --

thus the role changes from advocacy to allocation (gatekeeper), and

5. Monitoring health care providers for quality assurance and utilization management.

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Managed Care Organizations (MCOs)

MCOs are formal arrangements whereby distinct organizations are made responsible for managing a network of services and supports and are accountable for network performance.

These operational responsibilities are separate and distinct from the policy-level responsibilities of the public agency charged with governing the system.

As a rule, managed care organizations are responsible for keeping spending within established limits.

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Managed Care Organizations (MCOs)

In health care, the MCO plays a pivotal role in the implementation of managed care.

It manages the delivery system on behalf of the payor by delivering essential health care services at a cost the payer can afford.

In order to play this role, the MCO must serve as a conduit through which all funds are channeled.

The MCO organizes the supplier network, imposes rules on its operation, and serves as the service system’s fiscal intermediary.

Usually the MCO receives a fixed amount of money from the payer to perform these functions and, thus, has a strong economic interest in being a tough negotiator with suppliers, ferreting out over-utilization, and improving system-wide productivity.

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Characteristics of Managed Care Plans Versus Traditional Indemnity Insurance

CharacteristicIndemnity

Insurance

Managed

Care

Regulated by State Health Insurance Commission Member arranges for own health care services including use

of specialists

Member may be required to pay for health care and submit

claim for reimbursement

Staying solvent and providing a community benefit (not for

profit) and/or providing a return to shareholders (for profit)

Develop, disseminate and monitor use of clinical practice

guidelines

Use of payment models other than just reimbursement for

health care services delivered

Include coverage for preventive or screening services such as

immunizations or pap smears

Mandated annual reporting on quality, satisfaction and impact

related to health care services

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Characteristic Description

Care of a defined

population

· Population defined as the enrolled members at any point in time.

· Responsibility for acute services, preventive services, and ultimately the health status of this population.

· Focus on continuum of care rather than episodic visits.

Fixed budget · Health plan must provide all necessary services within the established per member premium amount or absorb the losses for each enrollment period.

· Health plan may not increase premiums within an enrollment period.

Evidence-based

clinical guidelines

· Goal is to reduce unnecessary practice variation and define the expected patterns of care.

· Guidelines are not absolute and providers may deviate from a guideline for individual patients as appropriate. Documentation of variation is provider's responsibility.

· Guidelines generally taken from specialty societies or governmental agencies and define recommended approaches to diagnosis and treatment of a specific condition.

Common characteristics of managed care plans

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Characteristic Description

Disease

management

· Goal of program is to improve quality of care and control costs for specified disease state such as asthma, diabetes, or heart failure.

· Focus on improving member education to maximize self-care, monitoring, and early recognition of exacerbation.

· Provide support to health care providers in terms of clinical guidelines, disease registries, formal data collection and reporting and outcomes assessments.

Explicit quality

measures

· Us laws required all plans seeking accreditation through National Committee on Quality Assurance (NCQA).

· Employer groups and government purchasers may request specific quality monitoring and reporting.

· Member satisfaction surveys required by NCQA/purchasers.

Strong primary

care role

· Members choose or are assigned to a primary care physician and become a part of his or her "panel."

· PCP acts as a gatekeeper if his/her approval is required for referrals, tests, treatments or hospitalizations.

· Held accountable for members obtaining recommended preventive services and screenings.

Financial

incentives

to providers

· Some providers "capitated;" receive a fixed fee per member per month

· Fraction of the total payment may be withheld until the end of the year. Distribution of withhold amount may be dependent on meeting quality, financial or utilization targets.

Common characteristics of managed care plans

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Differences Between Managed Careand Fee-For-Service Coverage

The most important characteristic that distinguishes managed care from other forms of health insurance is the active influence on medical decision-making through: Dissemination of clinical guidelines, Pre-authorization programs for referrals, admissions,

and diagnostic testing, Creation of limited provider networks whose

members agree to adhere to the practice standards developed by the plan.

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Dr. Shahram Yazdani

Managed Care Organizations

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Managed Care Organization Continuum

Managed care plans are sometimes described as either loosely or tightly managed, indicating how much they actually manage the care of their members.

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Managed Care Organization Continuum

A loosely managed program might allow a member to: Receive specialty care without approval from

his/her PCP, Seek care from a physician who is not part of

the plan’s network and have the care at least partially paid for by the plan benefit,

Obtain care at urgent care centers without preauthorization.

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Managed Care Organization Continuum

A tightly managed program however, would require a member to: Select a PCP from providers affiliated with

the health plan, Seek routine care from his/her PCP, Seek prior authorization for urgent/emergent

care that is not life threatening, Request referral for specialty care services

from his/her PCP.

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Managed Care Continuum

Use of Managed Care TechniquesLess More

TraditionalIndemnity

Health Plan

Traditionalwith Cost

ContainmentPOS PPO HMO

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Types of Managed Care Organizations

1. HMOs (Health Maintenance Organizations) Group IPAs (Independent Provider Associations)

2. PPOs (Preferred Provider Organizations)

3. POS (Point of Service Plans)

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Health Maintenance Organizations (HMOs)

There are 2 types:1. One group of HMOs consists of MDs who

contract with an HMO Doctors sign up and work exclusively for HMO Patients enrolled in HMO must use their own or

contracted facilities for health care Patients can only see HMO’s health care providers

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Health Maintenance Organizations (HMOs)

2. Independent practicing MDs join an association (IPAs) which contracts with an HMO (most MDs are here)

These doctors retain their own individual practices (have own offices)

They are reimbursed via capitation* or at a discounted rate for health services

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HMOs The HMO is generally the most tightly managed form of

managed care. This term describes a plan in which routine care is provided

exclusively by physicians who are affiliated (or contracted) with the plan.

In most HMOs, primary care providers may act as “gatekeepers” and be required to approve all ancillary services.

Prior authorization may also be used to review non-emergent or non-urgent procedures and services.

This usually means that a request is sent to the health plan for a procedure or service before it occurs, allowing the plan time to review the request and determine if it is a covered benefit under the member’s policy and meets clinical guidelines for care.

If the plan does not feel the service is medically necessary or if it does not fall within the benefit structure, payment could be denied.

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HMOs

It is important to note that the MCO is not saying the patient cannot have the care or service, simply that it will not be paid for under their benefit.

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PPOs

PPO describes an organization where independent physicians agree to provide services at discounted rates. This differs from an HMO because in PPOs contracts are not generally prepaid but are paid as services are delivered.

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Preferred Providers Organization (PPO)

Group of health care providers contract with an organization to negotiate contracts

Providers are paid at a discount rate (e.g. paid 80%) Patients enrolled in PPOs do not have gatekeepers

and don’t need permission to see a specialist by their PCP

Patients are restricted to a panel of doctors and cannot see anyone outside the health plan

Often times, there is a greater monetary cost to patients/employers (co-payments, deductibles, etc).

E.g. Patients may have to pay a $500 deductible before the PPO/ or insurance company “kicks in”

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Health Care Systemor Insurance Company

Contracts

IndependentPractitioners

IndependentPractitioners

IndependentPractitioners

IndependentPractitioners

IndependentPractitioners

IndependentPractitioners

IndependentPractitioners

PPO

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Point of Service

Similar to PPO except patients can use other facilities and doctors outside of plan

Cost to patient is much higher than a PPO

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POS

The Point of Service (POS) product is less tightly managed than the HMO, allowing members to choose whether they will go to a provider within or outside of the plan’s established network at the time medical services are needed.

The member will generally pay a larger co-pay or percent of the total cost for care provided outside of the network.

This plan structure was originally created as a transition product to move patients from indemnity to managed care coverage with a higher level of comfort about their ability to seek care from a wider variety of providers.

However, it has become one of the most popular managed care plan structures as Americans continue to equate choice with quality in healthcare.

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Practitioners May Contracts With Many Insurance Plans or MCOs

Independent PractitionerMD, Dentist, Pharmacist

PPO #1 PPO #2 PPO #3 HMO #1 HMO #2 HMO #3 POS #1

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The Problems With Contracting

Health professionals such as doctors often contract with a number of HMOs and PPOs.

This is why they often ask you, as the patient, what type of insurance (MCO plan) you have.

Each plan has its own restrictions on care and reimbursement scale. So this can be very confusing and time consuming to those who work in the provider’s office.

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Indemnity Insurance

PCP

Specialist

Hospital

Specialist

Hospital

80%

80% 80% 80%

80%

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Indemnity Insurance with Utilization Review

PCP

Specialist

Hospital

Specialist

Hospital

Managed Care Plan

80%

80% 80% 80%

80%

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POS

PCP

Specialist

Hospital

Specialist

Hospital

Managed Care Plan

70%

70% 70% 30%

30%

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PPO

PCP

Specialist

Hospital

Specialist

Hospital

Managed Care Plan

80%

80% 80% 0%

0%

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HMO

FCP

Specialist

Hospital

Adm

issionReferral

Specialist

Hospital

Managed Care Plan

90% 90%

0% 0% 0%

0%

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Outcomes of Managed Care

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MCOs and Controlling Costs

MCOs do so by controlling 1) MDs

2) Patients

3) Health Care Institutions

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Managed Care Controls Costs by Controlling MDs Behaviors

1. Specialistsi. In HMOs, patient needs a referral by a PCPii. Reimbursed via capitation/or discounted fee

2. Utilization Management- MCOs monitor what resources doctors use—too much expenditure, you’ll hear about it

3. Quality Assurance- doctors are monitored for how well they do. Patient satisfaction surveys are common ways of evaluating doctors.

4. Bonuses- doctors may be given bonuses if they do a good job for their work or for saving money (not using too much resources)

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Managed Care Controls Costs by Controlling Patients

Permission from MD or gatekeeper (HMO) to get treatment

Co-payments Deductibles Nurse phone service (prevent access

to care) Need approval for experimental or

expensive Rx Follow rules of MCO’s plan or you will

pay

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Managed Care Controls Costs by Controlling Institutions

1. For some providers, capitation 2. DRGs: one fee for everything3. Accountability-audits are done to

evaluate quality of care 4. Performance Evaluation- patient

satisfaction surveys

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Studies have shown some outcomes on Managed Care

1. PPOs don’t save money2. HMOs do save money3. Patient satisfaction survey results show

consumers: i. Don’t like bureaucracyii. Like low costs for HMOs (compared to PPOs)iii. Don’t like the idea that MCOs can deny essential

care4. Public outcry about managed care has caused

lawmakers to write laws to protect the consumer.

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Studies have shown some outcomes on Managed Care

5. Health outcomes: i. basically managed care and “fee for service”

(FFS) are comparable in terms of health outcomes.

ii. In some studies, managed care patients do better

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Patients Satisfaction

One 1997 national survey reported 79% of PPO members, 83% of HMO members, and 81% of POS members were satisfied with their health plan compared to 75% of fee-for-service members.

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Patients Satisfaction

% of EnrollmentPlan Type 1996 1999FFS 26% 9%HMO 33% 28%PPO 25% 38%POS 16% 25%

KPMG Peat Marwick, Health Benefits in 1996Kaiser Family Foundation & Health Research Education Trust, 1999 annual survey

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Main Questions to Ask

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Main questions to answer about MCOs:

Whether the MCO will be expected to serve all individuals or whether some will be kept outside the agreement.

A managed care approach can wrap around the full range of persons served in a system or it can be designed only to address the needs of pre-designated populations (e.g., “people who require 24-supervision”) with the needs of other individuals addressed through alternative configurations.

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Main questions to answer about MCOs:

The scope of benefits, services, and supports that an MCO will be contractually obligated to deliver to individuals.

This benefit package defines the contractual obligation of the MCO to the payor (the state).

In determining the scope of benefits, the payor must decide whether some services/supports will be placed outside the agreement (e.g., “carved out”) and thus be paid for separately.

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Benefit Structures of Managed Care Products

The typical benefits offered in managed care plans are: physician services (ambulatory and inpatient), hospital services, well-child care (including immunizations), prenatal care, periodic health maintenance exams, some home care services, emergency services, diagnostic and laboratory tests.

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Main questions to answer about MCOs:

The conditions under which the MCO must furnish contracted benefits to its enrollees.

These are sometimes referred to as “care criteria”. Such criteria may take many forms. In essence,

however, they define the core of the system’s response to consumer needs.

These criteria describe the MCO’s obligations under its contract with the payor.

Care criteria also serve as the basis of MCO utilization management activities as well as service substitution strategies.

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Main questions to answer about MCOs:

The payor must decide whether it will contract with a single MCO or multiple MCOs and the criteria it will use in selecting such organizations.

There are various pros and cons in using a single MCO versus multiple entities.

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Main questions to answer about MCOs:

The payor can decide to restrict its contracting to nonprofit entities.

It also may impose other requirements (including consumer involvement in the MCOs governing structure).

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Main questions to answer about MCOs:

The payer must specify its economic relationship with the MCOs. This relationship will have at least three dimensions: 1) Determining the amount of the capitated payment to

the MCO(s), including whether to use a single rate or multiple rates geared to potential differences among enrollees;

2) Deciding the extent to which the MCO(s) will be held at risk; and,

3) Imposing additional contractual terms and conditions, including limits on profit-taking, sanctions for nonperformance, and any special incentives that might affect payments.

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Main questions to answer about MCOs:

The payer must specify its expectations concerning the manner in which the MCO will organize, manage and operate the provider network. Such expectations can include: 1. Maintaining a sufficient supply and distribution of providers to

ensure that consumers have ready access to needed services; 2. Directing the MCO to contract with specified “essential

providers”; 3. MCO monitoring of provider agency performance; 4. The extent to which the MCO may limit the number of providers

with which it contracts (“open” versus “closed” panel); and, 5. The extent to which an MCO may impose risk to network

providers (in the form of its own payment policies).

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Main questions to answer about MCOs:

The payor will need to specify how consumer appeals/grievances will be addressed, including provisions governing the filing of appeals with a party not controlled by the MCO.

The MCO model delegates major system responsibilities to a single organization.

Consumer appeals/grievance mechanisms represent a critical “check and balance” when such delegation occurs. These mechanisms must be defined.

Provision also must be made for consumer appeals/grievance resolution when a satisfactory resolution of the issues cannot be reached between the individual and the MCO.

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Main questions to answer about MCOs:

The payor must decide how it will monitor and assess the performance of the MCO and network providers.

This may include specifications directing the MCO to file regular and periodic management reports, a requirement that the MCO itself operate an internal quality assurance system, provision for an independent assessment of MCO performance, consumer satisfaction surveys, and independent regulatory oversight of network providers.

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Thank You !

Any Question ?