Managed Care

Description In managed care, patients select an insurance plan to manage all of their health benefits. The insurance plan contracts with a network of providers to deliver services. Enrollees are limited to receiving care from network providers only, except in limited circumstances.
Patient Population

All and increasingly for Medicaid populations with long term services and support needs that had traditionally been excluded from managed care

Typical Lead

Commercial Managed Care Organizations; Large Providers, e.g., Hospitals, Large Physician Groups, and Integrated Delivery Systems for Provider-Led Variation

Role of Home Health Home health providers contract with MCOs to provide a subset of services. MCOs are generally not restricted by the same rules as government payers (Medicare and Medicaid). Therefore, home health agencies may contract with MCOs to provide a broader range of services
Reimbursement Model Payers reimburse MCOs on a capitated per member per month basis. MCOs generally accept full risk for costs associated with managing their enrolled population.

MCOs contract with providers through a variety of mechanisms. While most contract on a fee-for-service basis, MCOs are increasingly looking at value-based payment methodologies, including capitated payments for primary care services, and pay-for-performance for other providers.
Minimum Infrastructure Requirements
  • Insurance license
  • Back-office services
  • Provider network
Variations Provider-led MCOs, which are generally operated either by a large provider (e.g., hospital, large physician group) alone or in partnership with an existing MCO serving in an administrative capacity.