Managed care is about tightly managed . To accomplish the concept of managed care and controlled benefit administration, these companies require pre-authorization of certain services, careful review and payment of claims, and maintenance of a provider network. Each of these benefit administrative functions contributes to lowering the cost of care by managing benefits closely. Managed care health plan designs include Health Maintenance Organizations (HMO) and Preferred Provider Organizations (PPO).
Preauthorization of Services
Most managed care benefits require pre-authorization of services. This means that the member or provider must contact the health benefits company to pre-approve certain doctor visits, procedures and hospitalizations before they occur. This function is the cornerstone of managed care , as it is designed to control costs and excess usage of services. The managed care company staffs representatives for intake of the authorization requests and has clinical staff employed to review the requests and make a decision for approval or denial based on medical necessity criteria.
Claims Processing
A primary benefit administration function of managed care companies is to pay claims. Claims are bills submitted for reimbursement of provided services. Automation of the claims process is becoming more common. However, manual submission of claims still is acceptable. The managed care company employs staff to price, process and document claims sent in for payment. Often customer service representatives operate phone lines to answer questions and help with calls about claims. Focus has shifted to faster turnaround times, accuracy in payment and denying or reducing billing, if necessary.
Provider Network Maintanance
Most managed care companies have their own provider network. A provider network consists of health professionals and facilities that provide services to the managed care company's membership. The managed care company is responsible for provider recruitment, contracting and credentialing in the network. Provider networks allow members to access in-network benefits at a reduced cost. Arrangements with contracted providers stipulate that they cannot charge over a certain amount for their services and they must accept a certain amount of payment from the managed care organization. The purpose is to keep the cost of benefits down.
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