Market Segments And Distribution Channels For The MCOs
This week’s chapter discusses the various market segments and distribution channels for the MCOs. Outline the market segments and identify the most successful distribution channels for those markets. Use some outside research to support your statements. Why do you believe each distribution channel successfully reaches the targeted market?
Chapter 6: Sales, Governance and Administration
Learning Objectives
Understand the basic structure of governance and management in payer organizations
Understand the basic elements of the internal operations of payer organizations, including:
Information technology (IT)
Marketing and sales, including insurance exchanges
Underwriting and premium rate development
Eligibility, enrollment and billing
Claims and benefits administration
Member services, including appeal rights
Statutory accounting and statutory net worth
Financial management
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Board of Directors
May be specific to a plan, may be pro-forma for a subsidiary of a larger company, etc.
Responsibilities:
Final approval of corporate bylaws
General oversight of the profitability or reserve status
Oversight and approval of significant fiscal events
Review of reports and document signing
Setting and approving policy
Oversight of the quality management program
In for-profit plans, responsibility to protect shareholders’ interests
In free-standing plans, hiring the CEO and reviewing CEO’s performance
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© P. R. Kongstvedt
Typical Key Management Positions
Chief Executive Officer/Executive Director
Chief Operating Officer/Operations Director
May be a separate position from CEO in large companies
If separate from CEO, the COO may also be the President
Chief Medical Officer/Medical Director
Vice President (or SVP or EVP) of Network Management
Chief Financial Officer/Finance Director
Treasurer
Chief Marketing Officer/Marketing Director
Chief Underwriting Officer
Chief Information Officer/Director of Information Systems
Corporate Compliance Officer
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Typical Key Operational Committees
Quality Management Committee
Credentialing Committee
Utilization Review Committee
Pharmacy and Therapeutics Committee
Medical Grievance Review and Appeals Committee
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Foundational Information Technology (IT) Systems
Key software functionality includes:
Benefit configuration
Employer group and member enrollment
Premium management
Provider enrollment, contracting and credentialing
Claims payment
Document Imaging and Workflow
Customer Servicing
Medical Management
Ability for two-way EDI with insurance exchanges, employers, state and federal government, members, providers, etc.
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HIPAA Mandated Electronic Transaction Standards
HIPAA requires covered entities that conduct certain electronic transactions to use only ANSI X12N 5010 defined standards
ACA is creating new standards and requiring more standardization of implementation
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| Transaction | Standard |
| Provider Claims submission | ANSI X12 – 837 (different versions exist for institutional, professional, and dental) |
| Pharmacy claims | NCPDP |
| Eligibility | ANSI X12 – 270 (inquiry) ANSI X12 – 271 (response) |
| Claim status | ANSI X12 – 276 (inquiry) ANSI X12 – 277 (response) |
| Provider Referral certification and authorization | ANSI X12 – 278 |
| Health care payment to provider, with remittance advice | ANSI X12 – 835 |
| Enrollment and Disenrollment in health plan* | ANSI X12 – 834 |
| Claims attachment (additional clinical information from provider to health plan, used for claims adjudication) | ANSI X12 – 275 (not finalized at the time of publication), and HL7 CDA |
| Premium payment to health plan* | ANSI X12 – 820 |
| First report of injury | ANSI X12 – 148 (not yet issued) |
| * These are for voluntarily but not mandatory use by employers, unions, or associations that pay premiums to the health plan on behalf of members. |
Source: Compiled by author based on 45 CFR §160.920 and other sources at the Center for Medicare and Medicaid Services (CMS);
Accessible at http://www.cms.gov
HIPAA Mandated Privacy and Security Requirements
HIPAA requires high levels of privacy and security for electronic information, to:
ensure the confidentiality, integrity, and availability of electronic PHI;
protect against any reasonably anticipated threats or hazards to the security and integrity of electronic PHI;
protect against any reasonably anticipated uses or disclosures of electronic PHI not permitted by the HIPAA privacy rules; and
ensure compliance with the above by its workforce (Source: Federal Register, 45 CFR § 164.308)
There are eighteen standards for HIPAA security rules:
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| Security Management Process | Assigned Security Responsibility | Workforce Security |
| Information Access Management | Security Awareness and Training | Security Incident Procedures |
| Contingency Plan | Evaluation | Business Associate Contracts |
| Facility Access Controls | Workstation Use | Workstation Security |
| Device and Media Controls | Access Control | Audit Controls |
| Integrity | Person or Identity Authentication | Transmission Security |
| Source: Federal Register, 45 CFR § 164.308(a & b), 45 CFR § 164.310(a-d); 45 CFR § 164.312(a-e) |
Standardized SBC/SOC
ACA requires all health plans, including self-funded, must provide a standardized Summary of Benefits and Coverage (SBC), also called a Summary of Coverage (SOC) to all current and prospective enrollees
The SBC/SOC to be done in a uniform and common format that defines the number of pages, the exact information that must be provided, and even the size of the font
The SBC does not replace the far more detailed Evidence of Coverage (EOC), sometimes called a Certificate of Coverage or Certificate of Insurance
