Managed Care 101 (Medicare Advantage, SCO, Managed Medicaid, HMO, PPO)

Please note that this is a very basic overview to get you started.

What is managed care?

Managed care is a health care delivery system organized to manage cost, utilization, and quality.

Individuals who have enrolled in Medicare Part A and Part B are eligible for coverage by an approved private insurer through Medicare Advantage (Medicare only) or SCO (Managing both Medicare and Medicaid).

Before the 2003 Medicare Modernization Act, seniors didn't have the option to enroll in Medicare Advantage.

Medicare Advantage is also known as Medicare Part C.

Residents qualify for Medicare Advantage if:

• They have Medicare Part A and Part B coverage.
• They don't have permanent kidney failure that requires dialysis or transplant (with some limited exceptions).

Medigap should not be confused with Medicare Advantage.

Medigap coverage is a Medicare Supplement Insurance that protects people who buy traditional Medicare against many of the additional costs they might pay. In return, Medigap charges a premium in addition to what the person already pays for Medicare Parts A (many people get this free), B, and D.

Medicare Advantage is technically still a part of Medicare, but it is not sold or managed by the federal government. The government sets rules and guidelines, but private insurance companies sell and administer the plans. Medicare pays the insurance company to administer your Part A and B benefits through the Medicare Advantage plan. All plans must cover the same services as Parts A and B, but different Medicare Advantage plans will have different networks, copays, and drug formularies.

Key things to remember:

• Network/in-network facilities: Selective contracting with providers. The facility has to have a contract with the insurance, or the facility will obtain out-of-network case by case.
• Prior Authorization/Pre-certification: Oversight of specialty visits/elective procedures. Prior to admission/readmission, the facility has to obtain authorization. During inpatient care, the facility has to send updates to the insurance for continued coverage. Mostly weekly, but the insurance will let the facility know how often.
• Remember to keep insurance case manager contact information.

Please note the same goes for Managed Med B. That is, before the start of any services, you have to obtain authorization.

Benefits Package: Defined set of covered services. Each has different benefits and rules but must cover what original Medicare would cover. Note that most insurance uses 100 days. The insurance may waive qualifying stay that is often needed by original Medicare, but you have to verify.

Formulary: Rationalized and/or tiered pharmaceutical list.

Utilization Review/Management: Managing in-patient admission and length of stay.

Other things good to know:

• Do your certification...see cert training.
• Confirm payment method...contract or through MDS assessment (RUG, PDPM).
• Remember to give a denial letter at the end of skill care.
• Run your insurance verification at the start of every month. Business office manager usually does this.
• If a resident switches to original Medicare, start the clock and do the required MDS. Remember that used days count against 100 days. Also, restart your certs.
• If a resident switches from original Medicare to manage, obtain authorization and find out the payment method. Remember that used days count against 100 days. Also, restart your certs.

Custodial care...mostly SCO (Managing both Medicare and Medicaid) pays for custodial through Medicaid benefits.

Care that does not meet skilled nursing facility criteria...Medicare and most Medicare Advantage manage care does not pay for residential care room and board.

Examples of custodial care include:

• Assistance with activities of daily living (ADLs) like grooming, bathing, going to the bathroom, taking medications, and routine