What care should be covered?

Area of Science:

• Health Services Research
• Managed Care Policy
• Healthcare Economics

Background:

• Managed care organizations (MCOs) contract with payers to provide healthcare services within defined benefit packages.
• The definition of 'consumer' in managed care is often the employer (payer), not the individual patient.
• Patient preferences and interests may diverge from the benefits negotiated by employers.

Purpose of the Study:

• To explore the criteria used by managed care plans to determine healthcare service coverage.
• To analyze the discrepancy between payer-defined benefits and patient needs within managed care.
• To discuss the concept and application of 'medical necessity' in coverage decisions.

Main Methods:

• Analysis of managed care contracting and benefit design.
• Review of criteria for determining medical necessity.
• Discussion of stakeholder perspectives (payers vs. patients).

Main Results:

• Coverage decisions in managed care are primarily driven by the payer's willingness to pay.
• The employer acts as the primary 'consumer' negotiating benefits.
• The concept of 'medical necessity' is a key, often debated, criterion for coverage.

Conclusions:

• Managed care coverage is fundamentally determined by the payer's negotiated benefits.
• A gap can exist between employer-selected benefits and individual patient needs.
• Understanding 'medical necessity' criteria is crucial for navigating managed care coverage.