the practice of managing medical services utilization
How health insurance companies attempted to control costs prior to managed health care
they relied soley on cost sharing
What activities are included in Basic Utilization Management
Prospective utilization, Concurrent utilization, Retrospective utilization
Prospective utilization management
utilization management that occurs before the service: demand management, referral management and pre-certification of institutional services
Concurrent utilization management
applies to inpatient care and complex expensive cases. Large HMOs usually perform concurrent review via telephone. if the case is not on track, the nurse will work with the provider to extend coverage. if coverage is denied, they will discharge and find an alternative way to treat the pt. ex. home health services
Retrospective utilization management
utilization management that occurs after the fact. falls into 2 categories: case review and pattern analysis
Methods used by HMOs to influence future demand for medical services
demand management influences future demand for medical services. ex.access to preventative services, convenient hours of operation and medical advice manuals.
confined to gatekeeper model. members PCP determines which medical services are truly necessary, coordinate services and discourage overuse. authorizes services with specialists and # of visits.
inpatient and outpatient. someone (member or provider) calls the MCO to ask for authorization of a procedure. MCO gives authorization if it meets criteria and assigns # of days in the facility
past cases are examined for appropriate review. may investigate or adjust payments accordingly
amassing of significant amounts of utilization data to look for patterns. search for reasons why patterns exist. Give data to providers for comparision
External review of coverage claims
most MCOs required to provide a plan for external review of coverage claims. outside specialists look at the relevant facts of a particular decision to determine whether the MOC should provide coverage. Typically used with experimental treatments.
How do MCOs attempt to control ancillary costs instead
befits design, cost sharing, favorable contracting
pharmacy benefits management company: manage pharmacy benefits. rarely assume the financial risk. allows for economies of scale. uses: formulary, DUR, benefits design, mail order
list of drugs covering medical needs. several cost options. tiered formulary. PBM provides formulary, MCO adjusts it to the needs of physicians
how the infrastructure of the MCO is related to quality and to make changes in the infrastructure to bring about quality improvement
the way that care is actually rendered
looking at adverse events and MCO-wide measures
creating a strategy for entering a market and building an infrastructure that will allow for the sell of the MCO’s product
the actual activity of selling to those in the position to sell
MCO’s sales personnel, benefits consultants, agents, brokers, self service websites
MCO’s product for a large employer group
employer has work sites in multiple states and needs many options, benefits design varies, premiums are either fully experience rated or self-insured
MCO’s product for a small employer group
represents the largest number of employer firms, products are fully insured, premium rates offered are usually heavily regulated by the state. do not allow premiums to vary based on experience = fixed
MCO’s product for midsized employer groups
middle market. harder to differentiate. benefits may be less regulated, premiums vary based on experience and larger groups may self insure
MCO’s product for individual purchasers
ability to get insurance regulated by HIPAA. directly related to age, sex, medical conditions. policies may include exclusions. not all mco’s offer policies in the open market.sales often through brokers.
other party liability; more than one party is potentially liable to pay for a medical service. complex set of rules to determine which one of several policies has primary payment responsibility and which are secondary
Electronic funds transfer; common payment form for hospitals. payment is received faster, less of a chance of check being lost or misplaced.
interface btw the members and company. provides general information, routine communication, addresses problems, complaints, appeals and grievances, practices proactice outreach, and gauges the level of member satisfaction
day to day functions of the finance department. receives the premium payments owed, determines where the money goes, track administrative costs, calculates the bottom line.
estimating medical costs done by nonactuaries. two primary activites are: rate development and determining the level of risk of medical costs.
estimate the future medical expenses. estimates influenced by design of teh benefits plan, changes in laws, the configuration of the network, assumptions about utilization patterns. determines the IBNR. external firms may be contracted.
creates reports for each employer, the US dept of Labor, medicare. use of analytics department and ensure that MCO is reporting accurate numbers and operating according to the companies policies and guidelines.
2 budgets to manage: medical expenses and operational expenses
department responsible for managing the cash and investments. must maintain adequate financial reserves using a formula called the “risk cased capital”