Quick Guide To Medicaid and Medicare Managed Care Plans

In Medicare and Medicaid services, managed care plans fall under Part C, a Medicare Advantage plan alternative to Parts A and B. Medicare Advantage plans often include integrated self-administered drug coverage similar to the standalone Part D prescription drug benefit plan.

Download our whitepaper, "Living in a Medicaid and Medicare Managed Care World," for more information on the advantages and disadvantages of Managed care plans:

Medicare Managed Care

In Medicare and Medicaid services, managed care plans fall under Part C. While Parts A and B are the original Medicare insurance for hospital and physician services, Part C of the Medicare Advantage plan is an alternative to Parts A and B. Most, but not all, Medicare Advantage plans (and many of the other public managed-care health plans within Medicare Part C) include integrated self-administered drug coverage similar to the standalone Part D prescription drug benefit plan. The federal government makes separate capitated-fee payments to Medicare Advantage plans for providing these Part-D-like benefits, if applicable, just as it does for anyone on Original Medicare using Part D.

Medicare Part C plans come in two basic types:

• Managed care
• Fee-for-service

Medicare Part C managed care plans

There are several kinds of managed care plans, but they all operate under the same basic rule: You get full coverage only if you see a healthcare provider who is a member of the plan's "network." The most common, least expensive, but most restrictive Medicare Part C managed care plans are health maintenance organizations (HMOs). There are also Medicare Part C preferred provider organizations (PPOs) and Part C HMOs with a point-of-service (POS) option that adds certain variations to basic HMO rules.

Medicare Part C fee-for-service plans

A Medicare Part C fee-for-service plan works differently than a managed care plan but without the same "network" limitation of managed care. Instead, a Medicare Part C fee-for-service plan allows you to see any provider, but only if that provider accepts the plan's restrictions on a particular medical service, and accepts the amount the plan is willing to pay for that service.

Since the 1970s, Medicare beneficiaries have had the option, under Medicare demonstration programs, to receive their Medicare benefits through managed, capitated-fee health plans, mainly HMOs, as an alternative to FFS Original Medicare. The Balanced Budget Act of 1997, which formalized the demonstration programs into Part C of Medicare, introduced the term Medicare+Choice as a pseudo-brand for this option. Then, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 changed the name from +Choice to Medicare Advantage. These names are government artifacts and may or may not be visible to the beneficiary. Other managed Medicare plans include:

• COST plans (which are not capitated)
• Dual-eligible (Medicare/Medicaid) plans
• PACE plans (which try to keep seniors that need custodial care in their homes)

Understanding the ins and outs of medicare managed care gives your practice more opportunities for reimbursement and your patients more opportunities for care.