Activity 3: Health Plan Operations

Activity 3: Health Plan Operations

Respond to the prompts below in no more than two pages total. Separate and identify your responses to Part A, B, C, and D.

The below scenario is only to provide you with an example of a setting to frame the activity questions. The details of this scenario are not essential to answering the activity questions. Activity 3: Health Plan Operations 



You’re the chief operating officer of a Medicaid-managed care plan serving Medicaid and CHIP members in the southwest United States. You oversee overall operations of your health plan and assist your chief executive officer in defining and executing your health plan’s strategy. Although the financial and accounting operations fall under the responsibility of the health plan’s chief financial officer (CFO), you frequently meet with the CFO to identify initiatives that result in improved patient outcomes and reduced long-term costs. By federal law, your health plan’s medical loss ratio (MLR) is limited to 85%. If you exceed the MLR limit of 85%, the health plan is unable to recover the loss, so it’s essential that patient care is rendered when appropriate. Your health plan covers a variety of services that span the care continuum and contract with all types of providers to ensure your members’ needs are met. Coverage determinations are based on medical necessity and the use of evidence-based clinical guidelines. Utilization management (prospective, concurrent, and retrospective) is a particularly important area of health plan operations, as you want to ensure that care is only rendered when deemed appropriate, and this can help you manage your health plan’s MLR. You’re particularly interested in promoting prevention and wellness and identifying ways to empower your members to take control of their health. However, many of your members have complex medical needs that require high levels of care, so you’re faced with daily challenges of meeting your members’ needs while also ensuring your health plan is profitable. Activity 3: Health Plan Operations

  1. Describe what MLR is and how exceeding the 85% limit can result in financial losses. (25 points)
  2. Describe what’s meant by medical necessity and provide examples of excluded types of services. (25 points)
  3. Describe what evidence-based clinical guidelines are and how they’re defined. Explain some limitations or challenges associated with determining evidence-based clinical guidelines. (25 points)
  4. Describe the differences between prospective, concurrent, and retrospective utilization management. (25 points) Activity 3: Health Plan Operations