Explain the benefit to a third-party payer of this approach over a program such as major medical that only gets involved when the patient has a major illness

Some believe that MCOs are best at managing a patient’s wellness and supporting preventive and early detection services.

Explain the benefit to a third-party payer of this approach over a program such as major medical that only gets involved when the patient has a major illness (hospitalization).

Be specific.

Discussion board

250 word count minimum,

please use APA format, in text citations, include references

Please include two additional post 50 words minimum.

CHAPTER 5

Internal Operations

Learning Objectives

Understand the basic components of the internal operations of managed care organizations
Understand the differences between marketing and sales
Understand the basic concepts of underwriting, premium billing, and financial management
Understand the application of medical policy and claims payment
Understand the various components of member services

Marketing and Sales

Distribution
Market Segmentation
Wholesale versus Retail
Large Employer Groups
Small Employer Groups
Midsized Employer Groups
Individual Purchasers
Determining What to Sell

Distribution Channels

Wholesale Vs. Retail

Enrollment and Billing

Claims and Benefits Administration

Claims Capture

Claims and Benefits Administration (cont’d)

Claims Capture (cont’d)

Claims and Benefits Administration (cont’d)

Basic Benefits Administration
Determining Level of Coverage
Pricing Claims Payment
Application of Medical Policies
Routine Medical Policies
Medical Policies for Exceptions
Management of Pended or Appealed Claims and Adjustments

Claims and Benefits Administration (cont’d)

Other Party Liability
Management of Claims Inventory
Payment and Evidence of Benefit Statements
Archiving
Productivity and Quality Management

The Banking Function

CDHPs
HDHPs
Flexible spending accounts (FSA)s
Although it is common for a bank or financial services company of some sort to manage the HRA, HSA, or FSA, some MCOs are now offering these banking services directly.
Even if an MCO does not offer banking services themselves, they still may team up with a bank to do so.

The Banking Function (cont’d)

In both cases, the MCO offers to automatically deduct the required funds from the HRA or HSA either to pay the provider or to send a check to the subscriber.
Not all expenses are considered eligible for reimbursement by an HRA, HSA, or FSA, and the banking function must verify that they meet certain criteria.

Member Services

Finance

Operational Finance
Premium Revenue
Medical Costs
Administrative Costs
The Bottom Line
Treasury
Budgeting
Reporting
Actuarial Services

Finance (cont’d)

Underwriting
Rate Development
Adjusted community rating and community rating by class
Experience rating.
Rating for self-insured employers.
Determining the Level of Risk

Information Technology

Comprises the computer hardware and software and the telecommunications technologies that it uses to store and transmit information.
Includes:
a mainframe system to handle day-to-day operations,
an internal network to allow electronic communication within the MCO
Internet or e-commerce capabilities for communication with the outside world, and telephone systems.
Private communications systems for business-to-business electronic interchange
data storage and analysis systems, etc…
Informatics

Conclusion

Although 80–85 percent of each dollar of premium is spent on clinical services, administrative activities make up most of what an MCO does from day to day.
The MCO’s normal functions include:
enrolling members, billing for and receiving premium payments
processing authorizations and other aspects of medical management, and paying claims.
ensuring the means to help members resolve problems and manage complaints, appeals, and grievances.
managing finances

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