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
©2009 Jones and Bartlett Publishers
©2009 Jones and Bartlett Publishers
Wholesale Vs. Retail
©2009 Jones and Bartlett Publishers
©2009 Jones and Bartlett Publishers
Enrollment and Billing
©2009 Jones and Bartlett Publishers
©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