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.

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

CHAPTER 5

Internal Operations

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

Marketing and Sales

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

Distribution Channels

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©2009 Jones and Bartlett Publishers

Wholesale Vs. Retail

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©2009 Jones and Bartlett Publishers

Enrollment and Billing

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©2009 Jones and Bartlett Publishers

Claims and Benefits Administration

  • Claims Capture

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

Claims and Benefits Administration (cont’d)

  • Claims Capture (cont’d)

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

Claims and Benefits Administration (cont’d)

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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.

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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.

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

Member Services

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

Finance

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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

©2009 Jones and Bartlett Publishers

©2009 Jones and Bartlett Publishers

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

©2009 Jones and Bartlett Publishers

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