Models of Managed Care

As with most things related to healthcare, the rules are not simple or consistent. Here are the basic concepts behind managed care.

Patient Experience

Models of Managed Care

There are various structures to managed care. Some models demand rigid adherence to protocols and reduced fees in exchange for a limited number of contracted providers which, essentially, increases the number of available patients.


Other models do not have limited provider networks but require the practitioner to demonstrate clinical necessity for the rendered care. Still others do internal reviews of care by either employed or outsourced reviewers. However, the fact remains that participation in managed care requires the provider and the patient to demonstrate active participation in the process.

If you would like to participate in one or more of the managed care models, please see the traditional managed care concepts outlined below. Keep in mind, however, that managed care models are constantly changing as they are shaped by consumer demand, employer needs and payer requirements. In addition, provider behavior also can shape management models.

The basic concepts that must be addressed include:

  1. Discounting services. Most management methods come down to a negotiation between the doctor and a manager who requests the doctor's discounted services in exchange for something of value to them. Typically, the doctor may be given the opportunity to gain access to patients via a directory. The doctor must be able to understand and evaluate the relative benefit of these deals and determine if it outweighs what the doctor must give away.
  2. Defining medical necessity. Management defines and requires the doctor provide evidence for the medical necessity of any services offered. It requires that doctors understand the definitions and the requirements for evidence. This can be difficult to accomplish. Therefore, doctors must decide whether they can provide clinically necessary services within the confines of the manager's definitions and requirements. If they cannot, they may not want to participate.
  3. Defining scope of practice. As with medical necessity, managers often limit the scope of a doctor's practice to facilitate management simplicity. The doctor must understand and agree to these limitations to participate in these systems.

The information in the NCMIC Learning Center is offered solely for general information and educational purposes. It is not offered as, nor does it represent, legal or professional advice. Neither does this information constitute a guideline, practice parameter or standard of care. You should not act or rely upon this information without seeking the advice of an attorney familiar with the specific legal requirements of the state(s) in which you practice. If there is a discrepancy between the site and an insurance policy you have with NCMIC, the policy will prevail.