Managed care refers to a system developed within the health care sector, which ostensibly works to reduce the cost while providing high-quality health care services. Managed care hospital reimbursement denotes to a system whereby the beneficiary prepays for comprehensive coverage for hospital services. The beneficiary is mandated to choose a primary care physician. Refunds will only be made if the patient sought services from authorized care providers or those within the network of the primary care physician (Iuga & McGuire, 2014). Managed care provider reimbursement denotes a more open-ended form, which requires the enrollee to choose a primary care provider. However, in this case, the patient could decide to seek services from providers unauthorized by the primary care provider (Cleverley & Cleverley, 2017).
For the managed care hospital reimbursement, the most employed method of payment is capitation. This is how the method works, the care provider requires the enrollees to pay a fixed amount of fee per given period regardless of the few instances the beneficiary sought healthcare services within that time limit. For example, a requirement for payment of $500 annually. The disadvantage of this kind of payment method is that the enrollees may end up paying fees that they will not use during that period as they do not need any health care services. The main advantage of capitation is that it provides financial security to the care providers since their annual earnings are predetermined. Most people avoid paying for capitation because they believe it is a waste of money given that people who do not get sick often do not require these services.it is important to introduce better communication channels that help people to understand the importance of capitation despite their financial status in the society. Research suggests that only the rich pay for such services because they have extra cash to spend on medical insurances and bills.
For the managed care provider reimbursement. The most common employed method of payment is copayment. In this approach, both the healthcare provider and the beneficiary cost share on the cost of health services. The contract dictates flat rates for certain services provided (Iuga & McGuire, 2014). A classic example would be the requirement that the enrollee pays $15 for every consultation session with the physician. The main demerit in resorting to this kind of payment method is that it may result in higher priced drugs whose burden is spilled over to the insurance companies (Cleverley & Cleverley, 2017). The advantage, on the other hand, is that is lower out-of-pocket costs for the provider. It pocket friendly for employees because in case of a medical bill, their employers are liable to step in and help them with the costs. Most middle class employees benefit from copayment because it is realistic.
Moreover, other payment methodologies have arisen from the Patient Protection and the Affordable Care Act. The first is the prevailing charge amount. The payment is premised on customary charges for the insurance services that are covered by Medicare. If Medicare covers a particular healthcare service, the fees charged in Medicare are the maximum amount allowed for any insurer. The other payment methodology is the reasonable charge. In this method, Medicare considers the reimbursement for services which are not covered in any of their fee schedules. The reasonable cost is usually determined by looking into the lowest charges, the charges currently prevailing in the locality, and the providers’ customary charges.
There are forecasted changes that could appear in reimbursement methodologies. One of such changes is the assessment of reasonable costs. In that regard, Medicare will determine the both the direct and indirect costs incurred by the healthcare services providers when considering the amount of reimbursement that ought to be paid. This will determine that neither parties incur costs that are considered too high when seeking or providing health care services.
In conclusion, managed care system has brought forth change within the healthcare sector. This can be witnessed by the improved quality of services provided, which have not compromised on the quality. With the commencement of patient protection and affordable care act, managed care worked as a complementary system which has continued improving the performance of healthcare sector. Another importance is it has enabled people to receive the best medical care at low cost or the cost is shared with the insurance companies. These methods are important and the only way to convince people is to facilitate better communication methods that will make people understand. Health is an important aspect in human life, and some of these health benefits like managed care must be offered to everyone despite their social status in the society.
- Cleverley, W. O., & Cleverley, J. O. (2017). Essentials of health care finance. Jones & Bartlett Learning.
- Iuga, A. O., & McGuire, M. J. (2014). Adherence and health care costs. Risk management and healthcare policy, 7, 35.