The Global Organization Impact of Transitioning to Managed Care
Are you concerned about transitioning to managed care?
Let’s talk about transitioning to managed care. Many organizations are struggling to find their identity as a Managed Care Organization. A myriad of changes occur when an organization changes into a Managed Care entity and these changes impact not only the organizations, but the patients they care for and the providers they work with.
In the Managed Care Environment, Medicaid recipients are automatically enrolled in a Managed Care Organization, typically by geography.
Enrollees then only have access to those providers, or healthcare professions who are contracted by that Managed Care Organization.
These providers together are called a “Provider Network” and are responsible for the provision of all aspects of a patients care. While consumers still have some choice in their healthcare providers, they are limited to only those providers who are part of the network.
Additionally, only authorized services are provided and patients could be seeing more barriers to getting the care that they want vs. the care that meets Medical Necessity Criteria, even if they have previously received this care.
Providers often transition from an “open network” to a “closed network” in a Managed Care Environment. This means that Managed Care Organizations will direct their Enrollees to specific providers who have become a part of that MCOs network.
A provider, who is willing and able to provide services to consumers, will not be authorized to do so in this environment, unless they are part of the network.
Inclusion in the Managed Care network can be a cumbersome process that typically includes a time mandated application process, and stringent credentialing requirements.
Providers, once becoming part of the network, will be held to specific performance measures which will determine whether the cost of care they are providing, and the efficacy of that care meets certain standards.
Financial Changes for Managed Care Organizations
In a Managed Care Environment, a Managed Care Organization receives a set amount of money to provide care for each of its members or Enrollees, often for a fixed amount of time. Most commonly, Managed Care Organizations are paid per member per month by the State. This referred to as a Per-Member-Per-Month, or PMPM payment.
A Managed Care Organization is expected to cover all operational costs, including all administrative costs based on this fixed payment.
The Managed Care Organization will be responsible for authorizing all services for Enrollees, and paying all claims to Providers.
The Managed Care Organization is “at risk” for financial amounts exceeding the PMPM fixed payment amount. This means that if it costs more to provide care than the allocated state payment, the Managed Care Organization will be responsible for paying the difference.
Managed Care strives to ensure that treatment is appropriate and effective, and its purpose is to improve the accessibility of care and the outcome of the care provided.
Transitioning to managed care may seem like a drastic change. These changes create a paradigmatic shift for organizations who were not previously Managed Care Organizations, and providers, enrollees, and MCOs will have to make significant adjustments for the future.
For more information on how BHM can assist your organization please contact us at email@example.com.