Managed Health Care Plan Types

Health Insurance & Managed Care There are four main types of managed care plans. First, it helps to have a basic understanding of what managed health care is. Managed care "combines healthcare delivery with the financing of services provided" (Green & Rowell, Chapter 3). In a typical managed health care system, the payer restricts the patient with respect to what facilities and doctors the patient can use. The facilities reduce their fees in exchange for the promise of substantially more business from the managed health care organization.

Managed health care takes six distinct forms, according to Green and Rowell (2013, Chapter 3). The first of these is the exclusive provider organization (EPO), which "provides benefits to subscribers who are required to receive services from network providers." In this model, the patient coordinates care within this network, with the primary care physician. Under this plan, the EPO coordinates the network of providers, and the patients work within that network (Green & Rowell, Chapter 3).

The second type of managed care plan is the Integrated Delivery System (IDS), which is an organization of health care providers that join together to offer services to subscribers. An IDS is similar to an EPO except that the providers are the managed care organization, rather than members of a network contracted to the managed care organization. There are several types of IDS, depending on who organizes them. The third type of managed care plan is the health maintenance organization (HMO).

An HMO provides comprehensive health services to enrolled members on a prepaid basis (Green & Rowell, Chapter 3). The HMO pays a monthly capitation and tries to keep health care costs below that level. The subscriber still manages his/her own care with a primary care provider in this model, again within the network. HMOs typically provide preventative services as a means of controlling costs, require copayments. So for any given service, there will be a provider fee, a copayment and the insurance payment from the HMO (Green & Rowell, Chapter 3).

There are several different sub-models of HMO, including both closed- and open-panel models. The point of service plan (POS) "some HMOs and preferred provider organizations have implemented the POS, under which patients have the freedom to use the managed care panel of providers or to self-refer to out-of-network providers. If the primary care provider agrees, the patient can go out-of-network and only pay the usual copay (Green & Howell, Chapter 3).So the POS combines elements of the HMO and the PPO.

A PPO (preferred provider organization) is a "network of physicians and hospitals that have joined together to contract with insurance companies, employers or other organizations to provide health care to subscribers for a discounted fee" (Green & Rowell, Chapter 3). There is usually a fair bit of flexibility with a PPO for patients to go out-of-network. PPOs do not necessary include pharmacy services. A Triple Option Plan (TOP) is usually offered by an insurance company and is something of a cafeteria plan.

In a TOP, risk pools are created by the insurance company for insurance purposes, and the cost of health care is determined by the.