A managed care contract is an agreement between a medical facility and an insurance company to provide patient care while the latter covers the cost of these services. Managed care contracts are how things work in the US healthcare system and what makes medical services more affordable to people.
When signing a managed care contract, a medical facility enters an insurance network. That means that if you have a specific insurance plan, it covers certain medical services from all the practices that are in the network.
Read on to learn why managed care contracts matter so much and what you can do to get a better one as a medical provider.
Managed Care Contracts Explained
A managed care contract is a legal agreement between a healthcare practice and a managed care organization that explains and defines the level of care and financial aspects for both sides. The goal is to control the quality of care, ensure patient safety, and manage healthcare costs.
Different levels of medical professionals can sign a managed care contract, including individual physicians, private practices, hospitals, and more.
So, how do you sign a managed care contract?
Well, you need to go through payer enrollment. During this process, you look for insurance companies you can enroll with and prepare documentation. After you send the application, the insurance company does provider credentialing, which is a process that verifies your competency and ability to provide a certain level of care.
Keep in mind that payer enrollment is a lengthy process, and most practices hire outside help to navigate it. Then, after 90-120 days (sometimes more), you receive a managed care contract offer if everything is alright.
Different Types of Managed Care Plans
There are different managed care organizations offering these plans. That includes integrated delivery systems, provider-sponsored networks, health maintenance organizations, and other healthcare plans.
You can choose between several types of managed care plans, and they all offer a different spectrum of benefits. Medical practices need to think about their needs and balance between flexibility and costs of a managed care plan.
The three primary types of managed care plans are:
- Health Maintenance Organizations (HMO)
HMO plans typically pay periodically for medical services received within the network. These plans are fixed, so they are not as flexible as other types. Individuals with HMO plans choose a primary care doctor responsible for most of their care.
- Preferred Provider Organization (PPO)
PPO plans are more flexible and include groups of hospitals and other medical providers in their network. These insurance plans cover more services offered by in-network organizations, but they will also pay for some costs outside the network. However, that’s why PPO plans are typically more expensive than HMOs.
- Point of Service (POS)
These highly flexible plans allow you to choose between PPO and HMO options whenever you need medical care.
Can I Negotiate a Managed Care Contract?
The good thing about managed care contracts is that you don’t have to settle for one if you are not okay with the conditions. Instead, you should review it and negotiate better terms.
If you are unsure whether your managed care contract is good and you need help getting better terms, a professional healthcare consultant agency like Peregrine Healthcare can help. We have experience executing effective contracting strategies and maximizing effective reimbursement for our clients. Click here to learn more about our services and how to get in touch.
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