Managed Care Resources "Signature Series"

---

Managed Care Resources, Inc. is pleased to bring you the "Signature Series".

The "Signature Series" consists of articles about topics in managed care, written by experts in the field. While not an exhaustive manual for those entering the world of managed care, the Signature Series provides a sound basis that can then be supplemented through further discussion and consultation with individuals who have extensive experience in these areas. The first two Signature Series are Managed Care Contracting and Medical Management. Both series of articles are available on-line.

The Signature Series gives providers in all types of markets the building blocks for constructing a managed care organization. Whether the provider is in a geographic area where managed care has had significant market penetration or in a region where there has been little or no managed care enrollment, the articles can provide insight as well as practical advice.

The growing need for this kind of information becomes apparent when one considers that as individuals and organizations enter the arena of risk contracting, it is imperative that they understand the differences between their current practice model and the managed care model. Depending on whether the perspective is that of an individual medical practitioner in a solo or group practice, a hospital, or an ancillary service organization, the reimbursement method and the procedures and controls for the healthcare services provided will be different in risk contracting. All parties involved will continue to participate in the important decisions that affect patient care, but the reimbursement method will change and additional communication with other health professionals will be required. Once these differences are understood, it will become evident that providers still primarily determine the quantity and quality of patient care within the managed care environment.

Besides the differences in the reimbursement methods and the level of control exercised through medical management, a major difference in managed care organizations is whether they are licensed as traditional insurance carriers or HMOs. This is an important distinction, as it affects how an organization can contract with a provider, the level of risk that can be assigned to the provider, the amount and extent of funds that the entity must reserve for claims expenses, and other similar issues. It also affects the types and levels of service that may be provided under a contract with an employer or individual.

It is important to note that the meaning and scope of the term "managed care" have mutated substantially since the passage of the Health Maintenance Organization Act in 1973. Originally the term applied to pure HMOs only, but as new organizations evolved that used many of the techniques and practices of HMOs, they too were included under the managed care umbrella. Today the term encompasses a number of models, including preferred provider organizations (PPOs), exclusive provider organizations (EPOs), along with a variety of HMO products including open access plans (OPAs), point of service products (POSs), individual practice associations (IPAs), group practice models, and staff model plans. These organizational forms themselves exist in a variety of manifestations. In most cases, in fact, companies providing managed care services offer a combination of many, if not all, of these model types.

Two of the basic elements common to all models of managed care service are the medical management component and the formal contractual relationship with the carrier necessary for participation in the insurers' network. These elements illustrate the fundamental difference in the way medical services are provided under managed care versus the traditional fee-for-service model. In managed care, medical services are managed either through controls on reimbursement or through a series of formalized processes in the delivery of healthcare services. Managed care does not have to shift risk in order to effect control over the cost of delivery of healthcare.

The first Signature Series covers contracting for services, Managed Care Contracting. In this series, we have examined all aspects of contracting, including financial terms and conditions, legal requirements and contract language, division of responsibilities (or services to be provided under the provider agreement), and contract implementation. Once we looked at these issues in general terms, we focused on the issues as they apply to specific types of contracts (primary care, specialty, hospital, ancillary, etc.). Finally, we completed the series with a summary article tying together all of the key concepts. The articles in the Managed Care Contracting series are:

The Managed Care Contracting Signature Series is now published on-line.

The second Signature Series has addressed the various issues that apply to medical management in the managed care environment. The Medical Management series looks specifically at ten issues including medical management, quality assurance, credentialling, NCQA, HEDIS, critical pathways, demand management, etc. Again, the series has closed with a summary article. The articles in the Medical Management Series are:

The Medical Management Signature Series is now published on-line.

Managed Care Resources, Inc. hopes these articles will be thought-provoking as well as practical to anyone moving toward the managed care model, regardless of previous experience. The Managed Care Resources, Inc. team has over 150 years of combined experience in the development and implementation of managed care services. Please visit our home page to learn more about how we can assist you with your managed care needs. We also invite you to contact us with questions or comments.

Sincerely,

Ira H. Rosenberg

President, Managed Care Resources, Inc.

www.mcres.com email: info@mcres.com