Question

1. Why would an MCO want to reimburse hospitals by a DRG payment?

2. How will ACO models potentially impact MCOs in the future?

See the rubric for posting guidelines.

Answer 1

1 . Managed Care organisation ( MCO) is a Health care . MCO wants to reimburse hospitals by a DRG ( Diagnosis - related group ) payment as it saves money and also there will be incentives for more accurate coding and billing as itis a code based reimbursement . DRG payment offers coverage for all charges associated with all steps of inpatient stay from admission to discharge. Encouragement of cost containment initiatives, standardisation of prospective payment to hospitals etc are the advantages of DRG payment .

2. Impact of ACO models on MCO in future:

ACO - Accountable Care Organization is an association of Insurers, Healthcare facilities and health care providers and they all assume the Medical and financial responsibilities for patients who are with Medicaid plan . ACO model is mainly focusing on value based care  and  it rewards outcomes .

ACO model inspires patient to focus more on preventive care and it makes the helth care providers  to be responsible for the services they provides; its appropriateness , safety and quality. This model can impact the MCO in future as the whole health care sector may shift to Value based care from a volume - based care . As the topic of Quality of Health care coming to the front scene evolving ACO model can influence MCO to shift from fee for service ( FFS) to Value Based Reimbursement ( VBR).