MANAGED CARE
Managed Care can be a type of company or type of plan offered by company.

Managed Care Companies: Are both for profit and non profit companies, which offer only managed care plans. It is financed by premiums and sell both group and individual plans and only health insurance.

Managed Care Plan: There are three common types of managed care plans: Health Maintenance Organization, Point of Service Organization, and Preferred Provider organization. Each plan has a different balance of a patient’s cost for the plan. In general, the more choice a patient has of which provider he can see, the more expensive the plan.

Managed care is different from Commercial Insurance because it attempts to “manage a person’s care” by restricting the providers an enrollee can visit. Managed care usually has cheaper premiums than Commercial insurance.
The main emphasis of managed care is to control utilization of services to achieve appropriate, efficient use of resources along with positive outcomes. As a result, managed care organizations employ such strategies as pre-authorizations, re-authorizations, and on-going case review. Most often patient care under managed care is coordinated by a managed care case manager who may follow patients through all settings or just specific settings.

HEALTH MAINTENANCE ORGANIZATION (HMO)

HMO consists of a network of physicians, hospitals, and other healthcare providers that have contracted with an insurance company to manage an enrollee’s care. Services rendered by providers outside of network are not eligible for coverage.
With an HMO plan, a patient must first refer a primary care physician (PCP); the PCP then manages the patient’s care and may refer that patient to other provider if necessary. HMO’s are generally the least expensive managed care plans for enrollees because this type of plan has the most restrictions on provider choice.

POINT OF SERVICE (POS)

In POS, patients have the option of using in-network providers or out-of-network providers. A POS plan will reimburse services received from in-network providers at a higher rate than out-of-network providers.
If the patient remains in-network, the patient must still use a PCP to coordinate care; patient who seeks out-of-network care does not need to go through a PCP. Claim received from the out-of-network providers may be rejected or paid at a lower rate. Also the patient responsibility on a bill would be higher if he goes out of network.

PREFERRED PROVIDER ORGANIZATION (PPO)

PPO is made up of group of providers who have simply agreed to discount their services for a specific insurance plan; this provider group is generally much larger than the network in an HMO and POS.
With PPO’s, a PCP or even the group of providers does not manage a patient’s care; a patient can see any physician he wants to among the providers offering discounts. Out of all managed care plans, PPO’s give patient the most choice of providers and so they are the most expensive plans. Also, patients are not required to visit a PCP before visiting a specialty care physician.