Principles that states set for plan structure, operations, and the internal quality improvement/assurance system that each MCO/PHP must have in order to participate in the Medicaid program.

1. Generic term applied to managed care plans such as exclusive provider organizations (EPOs), health maintenance organizations (HMOs), preferred provider organizations (PPOs), and point-of-service (POS) plans. MCOs are usually prepaid group plans and physicians are typically paid by the capitation method. Also referred to as managed health care plan . 2. MCOs are entities that serve Medicare or Medicaid beneficiaries on a risk basis through a network of employed or affiliated providers. In the Medicaid program, other organizations may set up managed care programs to respond to Medicaid managed care. These organizations include federally qualified health centers, integrated delivery systems, and public health clinics.

1. Prepayment health care program in which a specified set of health benefits is provided in exchange for a yearly fee or fixed periodic payments to the provider by the plan. This category of third-party payers includes health maintenance organizations (HMOs), preferred provider organizations (PPOs), and independent or individual practice associations (IPAs). 2. Under the Medicare program, type of prepaid medical plan that must cover all Medicare Part A and Part B health care. Some managed care plans cover extra benefits such as extra days in the hospital. In most cases, a type of Medicare Advantage Plan that is available in some areas of the country. Cost to the patient may be lower than in the Original Medicare Plan.

Prepaid health plan that lets the patient use doctors and hospitals outside the plan for an additional cost.

Health delivery method that integrates the financing and provision of appropriate health care services to covered individuals by means of arrangements with contracted providers to furnish a comprehensive set of health care services to members, explicit criteria for the selection of health care providers, and significant financial incentives for members to use providers and procedures associated with the plan. Managed care plans typically are either health maintenance organizations (HMOs), preferred provider organizations (PPOs), or point-of-service (POS) plans. Managed care services are paid by a variety of methods including capitation, fee-for-service, or a combination of the two.

Health care reform system wherein health plans offer their most competitive rates to provide health insurance coverage. This system changes competition in the health insurance market from risk (insuring healthy persons instead of those with preexisting conditions) to price. Employers form large purchasing networks to obtain insurance coverage at reduced rates. The employers pay for the employees and the employees choose a health plan they want during open enrollment and pay the difference between the employer’s contribution and the cost of the plan. The insurance coverage is transferable if the employee changes jobs. Also known as managed cooperation . See also consumer health alliances .

System composed of a combination of fee-for-service (FFS) and managed care components to control inappropriate use such as precertification, second surgical opinion, and utilization review. The costs of covered services given to members are paid by the plan after the services have been used. Also referred to as managed fee-for-service product .