Managed Care

A system of healthcare delivery that seeks to manage costs, quality, and utilization of services through various mechanisms such as provider networks, preauthorization requirements, utilization review, and financial incentives.

 

Health Maintenance Organization (HMO)

A type of managed care organization that provides comprehensive healthcare services to its members for a fixed periodic payment. HMOs typically require members to select a primary care physician (PCP) who coordinates all their healthcare needs.

 

Preferred Provider Organization (PPO)

A managed care organization that contracts with healthcare providers, such as hospitals and physicians, to create a network of participating providers. PPO members have the flexibility to choose providers within or outside the network but usually receive higher benefits when using in-network providers.

 

Point of Service (POS) Plan

A type of managed care plan that combines elements of HMOs and PPOs. POS plans require members to choose a primary care physician (like in HMOs) but allow them to seek care from out-of-network providers at a higher cost.

 

Capitation

A payment arrangement in managed care where healthcare providers receive a fixed monthly payment per enrolled member regardless of the quantity or nature of services provided. This payment method incentivizes providers to deliver cost-effective care.

 

Utilization Review

A process used by managed care organizations to evaluate the appropriateness, necessity, and efficiency of healthcare services provided to patients. This can occur prospectively, concurrently, or retrospectively.

 

Gatekeeping

A practice in managed care where a primary care physician (PCP) serves as a “gatekeeper” for specialty care and referrals. Patients typically need a referral from their PCP to see a specialist or receive certain medical services.

 

Out-of-Network Services

Healthcare services received from providers who are not part of the managed care organization’s contracted network. Out-of-network services often result in higher out-of-pocket costs for members compared to in-network services.

 

Disease Management

A structured approach to managing chronic diseases and conditions within a managed care framework. Disease management programs aim to improve patient outcomes and reduce healthcare costs through preventive measures, patient education, and coordinated care.

 

Quality Improvement Initiatives

Activities undertaken by managed care organizations to monitor, assess, and improve the quality of healthcare services delivered to members. This may include collecting and analyzing clinical data, implementing best practices, and promoting patient safety initiatives.