Group Medical Expense Benefits, Managed Care Plans - MULTIPLE-OPTION PLANS

Until recently, an employer who wanted to make an HMO or POS option available to employees had to enter into a separate contractual arrangement with an HMO. Unless a PPO was sponsored by the insurance company or Blue Cross-Blue Shield plan of an employer, a similar contractual arrangement was also required. Several insurance companies and Blue Cross-Blue Shield plans are now providing all these options under a single medical expense contract. For example, one insurer markets a so-called quadruple-option plan that gives employees the choice of a traditional major medical contract, a PPO, an HMO, or a POS plan. In most cases, the HMOs and PPOs used in such arrangements have been formed or purchased by the insurance company or Blue Cross-Blue Shield plan, but occasionally a contractual relationship has been established with an existing HMO or PPO. HMOs, in addition to offering POS options, also frequently offer PPO products to employers as part of a multiple-option plan.

These plans offer certain advantages to the employer. First, administration is easier because all elements of the plan are purchased from a single provider. Second, costs may be lower because the entire plan, including the HMO, may be subject to experience rating. Because federally qualified HMOs cannot fully use experience rating (particularly on a retrospective basis), only nonfederally qualified HMOs are often used in multiple-option plans.

Group Medical Expense Benefits, Managed Care Plans - Accreditation

As managed care matures and becomes more widespread, there is an increasing focus by government, employers, and consumers on quality. This has led many employers, particularly large employers, to require that managed care organizations for their employees meet some type of accreditation standards. Accreditation does more than just provide consumers with information about health plans. The process, which may cost a managed care organization several thousand dollars, compares it with what are considered benchmark standards of quality care. The organization knows where it stands in relation to its competitors and also what must be done to become accredited or to achieve a higher level of accreditation.

The leading organization for accrediting appears to be the National Committee for Quality Assurance (NCQA), an independent, not-for-profit organization that has been accrediting HMOs and POS plans since 1991 and plans to start accrediting PPOs. (It also accredits managed behavioral health care organizations, credentials-verification organizations, and physician organizations.) Unlike some accrediting organizations, NCQA makes detailed information available to the general public. The NCQA accredits managed care organizations by evaluating the following five areas of performance (the percentage weighting of each area in the overall accreditation decision is also indicated):

1. Access and service. Do health plan members have access to the care and service they need? For example, are physicians in the health plan free to discuss all treatment options available? Do patients report problems getting needed care? How well does the health plan follow up on grievances? (40 percent)

2. Qualified providers. Does the health plan assess each physician's qualifications and what health plan members say about their providers? For example, does the health plan regularly check the licenses and training of physicians? How do health plan members rate their personal physician or nurse? (20 percent)

3. Staying healthy. Does the health plan help people maintain good health and avoid illness? Does it give its physicians guidelines about how to provide appropriate preventive health services? Are members receiving tests and screenings as appropriate? (15 percent)

4. Living with illness. How well does the health plan care for people with chronic conditions? Does the plan have programs in place to assist patients in managing chronic conditions such as asthma? Do diabetics, who are at risk for blindness, receive eye exams as needed? (15 percent)

5. Getting better. How well does the health plan care for people when they become sick? How does the health plan evaluate new medical procedures, drugs, and devices to ensure that patients have access to safe and effective care? (10 percent)

From this information, the NCQA gives health plans one of the following accreditation outcomes:

Excellent

Commendable

Accredited

Provisional

Denied

The NCQA has also developed a set of performance measures that are designed to enable purchasers and consumers to have necessary information to reliably compare the performance of managed care plans. These measures are commonly referred to as the Health Plan Employer Data and Information Set, or HEDIS. The current version (which tends to change almost annually) has more than 50 measures that fall into the following categories:

Effectiveness of care

Access/availability of care

Satisfaction with the experience of care

Health plan stability

Use of services

Cost of care

Informed health care choices

Health plan descriptive information

Examples of a few of the measures that HEDIS reports, which then can be compared with suggested norms, are the following:

Percentage of adolescents receiving immunizations

Percentage of patients receiving beta-blocker treatment following a heart attack

Percentage of patients receiving appropriate treatment for asthma

Percentage of women receiving counseling at the onset of menopause

There are also other bodies that accredit various types of health care organizations, including managed care plans, and make their data available to consumers. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) has accredited hospitals for many years. It also accredits health care networks (including PPOs), home care organizations, long-term care facilities, behavioral health care organizations, ambulatory care organizations, and clinical laboratories.

Another major accrediting organization is the American Health Care Commission/URAC, commonly referred to just as URAC. URAC focuses on accrediting specific aspects of managed care, such as utilization review. Managed care organizations, such as HMOs and PPOs, can have their own utilization review activities accredited if prescribed standards are met. In addition, URAC accredits the activities of organizations that specialize solely in utilization review and that sell their services to managed care plans that do not have their own utilization review staffs. URAC also accredits organizations with respect to the following: case management standards, health call center standards, health network standards, health plan standards and network credentialing standards.

Group Medical Expense Benefits, Managed Care Plans - Quality of Care

A difficult question to answer is whether persons covered by managed care plans receive the same quality of care as persons covered under traditional medical expense plans. If the sole objective of a managed care plan is to offer coverage at the lowest possible cost, there may be a decline in the quality of care. However, some type of quality assurance program is one aspect of any managed care plan. If properly administered, this type of program can weed out providers who give substandard and unnecessary care. In this regard, managed care plans may be more progressive than the medical field as a whole.

The results of numerous surveys and studies on the quality of medical care plans have been mixed. Some studies show that persons in managed care plans are less likely than persons in traditional medical expense plans to receive treatment for a serious medical condition from specialists, and they are also likely to have fewer diagnostic tests. There are those who argue that family physicians can treat a wide variety of illnesses and avoid unnecessary diagnostic tests and referrals to specialists. On the other hand, an opposing argument contends that the decline in the use of specialists and frequency of diagnostic tests is also a clear indication that there is a decline in the level of medical care. Other studies show that persons in managed care plans are much more likely than the rest of the population to receive preventive care and early diagnosis and treatment of potentially serious conditions such as high blood pressure and diabetes. In addition, managed care plans are viewed as having been successful in coordinating care when it is necessary for a person to see several different types of specialists. There is no doubt that there are some small provider networks with a limited choice of specialists, but most networks are relatively large or allow persons to select treatment outside the network. There are also many managed care plans that do refer patients to highly regarded physicians and hospitals or have these providers as part of their networks.

In evaluating the quality of medical care, it is also interesting to look at surveys of participants in the various types of medical expense plans. Most persons in traditional medical expense plans are convinced they receive better care because of their unlimited ability to choose providers of medical care as needed. While surveys of participants in managed care plans usually show a high degree of satisfaction with the medical care received, there are some concerns that have resulted in recent plan changes and legislative actions and interest.

Two recent developments relate to the quality of care provided by managed care organizations—an increased interest in accreditation and a consumer backlash against some aspects of managed care. This backlash has led to the introduction or passage of laws in many states aimed at solving consumer and provider concerns about access to care, quality of care, and choice.

Group Medical Expense Benefits, Managed Care Plans Issue - Limited Choice of Medical Providers

DIFFERENCES FROM TRADITIONAL PLANS
True managed care plan should have five main characteristics:

Controlled access to providers

Comprehensive case management

Preventive care

Risk sharing

High-quality care

The major characteristic of managed care plans that differentiates them from traditional medical expense plans is probably the limitations on the choice of medical care providers that may be used. The question arises as to whether these choice limitations lead to a different quality of care. Despite these apparent or perceived differences, more than three-quarters of the population is now in some type of managed care plan, and the majority seem reasonably satisfied with the arrangement. In the past few years, much of the growth in managed care has come from employers with fewer than 50 employees. Unlike larger employers, who usually give employees a choice between one or more managed care plans and a traditional indemnity plan, small employers are more likely to offer a single managed care plan rather than any options.

Despite the relatively high level of satisfaction, there has been some recent consumer backlash against managed care that has led to plan changes and legislation, particularly at the state level.

Limited Choice of Medical Providers
Managed care plans attempt to eliminate the unrestricted use of medical care providers by either requiring or encouraging participants to use preapproved providers. The earliest managed care plans, which were HMOs, usually provided no coverage for treatment outside the managed care network, discouraging enrollment because many Americans valued the choice that had traditionally been available when medical treatment was needed.

The concept of managed care received considerable attention in the late 1960s and early 1970s, culminating in the passage of the Health Maintenance Organization Act of 1973. The act resulted in modest growth of HMO plans, but the real growth that came later for managed care was encouraged by several developments that gave employees more choice in selecting providers of medical care. One of these changes was more flexibility under HMO plans. For example, many of the early HMOs assigned a primary physician to a new member. Gradually, new forms of HMOs developed, and existing HMOs were modified to allow members to select a primary care physician from a list of primary care providers.

At the same time, the traditional insurance industry was entering managed care, primarily through the marketing of PPO products, which allowed more flexibility than most HMOs with respect to selection of specialists. In addition, benefits were usually available for treatment received outside a managed care setting, though at a reduced payment level.

The popularity of PPO products with both employers and employees forced the HMOs to adopt even more flexibility. This they did through the establishment of POS plans, which covered nonnetwork treatment. The typical POS plan is more flexible than a typical HMO but more restrictive than a typical PPO product. However, the variations in all three types of plans today are so significant that it is sometimes difficult to determine exactly what is typical.

Survey statistics of the percentage of managed care participants in each type of plan vary, depending on who conducts the survey. However, results of these surveys are similar and indicate that about 40 percent of managed care participants are enrolled in PPOs, 35 percent are enrolled in traditional HMOs, and 25 percent are enrolled in POS plans. All of the surveys show that the percentage for PPOs has recently been increasing. While the percentages for both HMOs and POS plans have declined somewhat, each of these types of managed care plans have continued to have growth in absolute enrollment as more employees leave traditional insured plans and move to managed care.