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What are Managed Care Plans and What Are My Rights?

 

What are Managed Care Plans?

Managed care plans are businesses that manage the delivery of health care services to consumers to control the costs of providing care. There are many types of managed health care plans, but HMOs (Health Maintenance Organizations) are the most common. Other types of managed care plans include PPOs (Preferred Provider Organizations) and POS (Point of Service plans).

What most managed care plans have in common are cost-saving factors like covering only a set package of services, limiting the number of providers that an enrollee can use (in-network), and/or higher costs for enrollees who go to doctors outside the plan’s network. The plans also contract with doctors and health care providers on what is called a capitation basis. Under a capitation agreement, a plan pays providers a set amount for each enrollee they see and not according to the cost or the complexity of the services they give the enrollee. Also, managed care plans usually require enrollees to have one doctor as their primary care provider who must approve and authorize the enrollee’s use of any medical specialists.

Examples of Managed Care Plans in New Jersey

HMOs (Health Maintenance Organizations). HMOs arrange for the coverage of specific health care services that are needed by plan enrollees for a fixed, prepaid premium. Most HMOs also require a co-payment from enrollees for such services as office visits and prescription drugs.

There are currently 12 HMOs that are approved by the New Jersey Department of Banking and Insurance (DOBI) to issue HMO and POS products. Some are commercial HMOs (sell their benefit plans/policies to the public) and some cover only Medicare and/or Medicaid beneficiaries. You can see by the charts on DOBI’s Web site (see Contacting Your HMO) that two of the six Medicaid-contracted HMOs for New Jersey also have benefit plans (“product lines”) that they sell directly to individuals and employers.

PPOs (Preferred Provider Organizations). PPOs pay providers an agreed-upon amount to treat their enrollees. Enrollees often have a larger selection of providers in a PPO plan.

POS (Point of Service Plans). A POS plan generally permits its enrollees to decide, at the time the service is needed, whether to see an in-network or out-of-network provider. Enrollees will have a much larger co-pay if they choose an out-of-network provider.

Do I Have Any Legal Rights to Get the Care I Need in Managed Care Plans?

If you are enrolled in a managed care organization, such as an HMO, and you have Medicaid or Medicare in New Jersey, you have special rights under federal and state law to appeal decisions that affect your Medicaid and Medicare eligibility, coverage, and access to medical care. Please see the NJ FamilyCare, Medicaid, or Medicare topics in LSNJLAW’s Health section for more information. If you need help, you should also contact your nearest Legal Services office or call LSNJ-LAW™, Legal Services of New Jersey’s statewide, toll-free legal hotline, at 1-888-LSNJ-LAW (1-888-576-5529) to see if you are eligible for free legal assistance. Hotline hours are Monday through Friday, 8:00 a.m. to 5:30 p.m. If you are not eligible for assistance from Legal Services, the hotline will refer you to other possible resources.

All consumers who are enrolled in a managed care organization in New Jersey are protected by the Consumer Bill of Rights (from the New Jersey Department of Banking and Insurance). These legal rights include such important protections as having access to a primary care provider 24 hours a day for 365 days a year for urgent care, the right to have a doctor—and not an administrator—make the decision if your care is denied or limited, and the right to appeal decisions that deny or limit coverage of your medical care.

All managed care consumers have the legal right to appeal decisions that negatively affect their health care. These appeal rights are explained on HMO Appeals and Complaints and at the Division of Insurance of the NJ Department of Banking and Insurance's Office of Managed Care page. If you need help, you can contact your nearest Legal Services office or the LSNJ-LAW hotline at 1-888-LSNJ-LAW (1-888-576-5529).

This information last reviewed 10/26/11

 

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Low-income New Jerseyans can get free legal help by phone: call our toll-free hotline at 1-888-LSNJ-LAW (1-888-576-5529), Monday through Friday, 8:00 a.m. to 5:30 p.m. Outside of New Jersey, please call 732-572-9100 and ask to be transferred to the hotline.