If you have health insurance, do you know what kind of coverage you have? According to a September 2000 study from the Center for Studying Health System Change, almost a quarter of the people surveyed incorrectly identified whether or not they were in an HMO. It's important to understand how your health plan works so that you have coverage when you need it.

An HMO (health maintenance organization) is one type of managed care. There are many types of managed care. Other types of managed care plans offered in Wisconsin include point-of-service plans and preferred provider plans. And there are variations within each of these types.

A traditional health insurance policy provides coverage on a fee-for-service basis. An insured individual can see any health care provider for services. The insured person pays the provider for each service and then the insurance company reimburses the individual for a portion of those charges that were covered by the policy.

So what is a managed care plan? It is a health insurance plan that encourages insured individuals to use certain providers. A managed care plan is defined as any health benefit plan that requires or creates incentives for an insured person to use providers that are owned, managed, or under contract with the insurer offering the health benefit plan. These incentives may be financial incentives or may be additional benefits. For example, the health plan may pay a higher percentage of the charges for the services of a plan provider. Or the health plan may offer additional benefits, such as coverage for some preventive care when the services are provided by a plan provider.

There are many types of managed care plans offered by insurers. Some only provide coverage for services if the person insured sees a plan provider. Others allow the individual to choose any provider but provide additional benefits if a specific plan provider is used.

• HMOs provide coverage for a broad range of health care services when an insured person uses the services of a plan provider. An HMO is generally the most restrictive type of managed care plan. Coverage is only available when the individual obtains services from a plan provider. The insured person must also follow the HMO's procedures for obtaining services, such as obtaining a referral before seeing a specialist. In exchange for the limitations on the choice of provider, an HMO may provide coverage at a lower cost or may provide additional benefits.
• Point-of-Service Plans (POS) are generally offered by HMOs and provide both HMO-type benefits and traditional health insurance benefits. POS plans provide financial incentives to use network providers, but allow insured individuals to choose providers outside the plan.
• Preferred Provider Plans (PPP) are offered by traditional health insurance companies. They are similar to POS plans in that they provide coverage regardless of the choice of provider, but generally will pay a larger portion of the bill if the insured person uses a provider selected by the plan.

All managed care plans seek to provide medically appropriate services while at the same time controlling costs. They may do this by using some or all of the following elements:

• Primary care provider - Some managed care plans require insured individuals to choose one physician to provide routine medical services and to coordinate care when the insured needs specialty services. The primary care provider is sometimes referred to as a "gatekeeper" because he or she controls the insured person's access to specialty care.
• Referral requirements - Some managed care plans require the person insured to receive an authorization from the plan or from the primary care provider before obtaining certain services. The plan may only provide coverage or may only provide the highest level of coverage if the insured person obtains services from his or her primary care provider or with a referral from the primary care provider.
• Prior authorization - Some services, such as an inpatient hospitalization or some diagnostic tests, may require the insured person to receive approval from the insurance company prior to receiving the service.
• Case management - For a person with a complex medical problem, the medical management department of the managed care plan may work directly with her or him and with the attending physician to ensure that the treatment plan provides the most appropriate care.

With so many different types of health plans, how can a consumer know what procedures to follow when obtaining services?

• Read the policy or certificate and the other written information provided by your health plan.
• If you have questions, call the health plan's customer service representatives.
• Contact the Office of the Commissioner of Insurance (OCI).

This article is one of a series written by Barbara Belling, Managed Care Specialist for the Office of the Commissioner of Insurance. She can be reached by electronic mail at ocihmo@wisconsin.gov. The OCI's brochures "Fact Sheet on Managed Care Consumer Protections in Wisconsin" and "Managed Care Health Plans in Wisconsin" are available toll-free at 800-236-8517 or on the Internet at http://oci.wi.gov/oci_home.htm.

By Barbara Belling
Office of the Commissioner of Insurance