Managed Care is a health care delivery system organized to manage cost, utilization, and quality. Unlike a traditional fee-for-service system, in which a provider is paid directly by an insurer for every service delivered, under managed care, an organization or provider is responsible for providing a specified set of services for each insured member in return for a set monthly payment, known as the capitation rate.
A managed care organization is an entity that receives a capitated payment and coordinates a patient’s care through a defined network of physicians and hospitals. An HMO, or Health Maintenance Organization, is a variety of managed care organization that typically requires patient to seek care from doctors and other providers who work for or contract with the HMO. In exchange for being limited in their choice of providers, patients enrolled in an HMO typically have lower out-of-pocket costs than in a fee-for-service plan.
Oklahoma’s Medicaid program, known as SoonerCare, operates a limited form of managed care. Under the SoonerCare Choice program, most children and working-age adults select or are assigned to a Primary Care Provider/Care Manager (PCP/CM), who receives a monthly capitated payment for coordinating the care of each of their patients. Oklahoma ran a fully capitated managed care HMO program in urban areas from 1996 to 2004.