Here’s a summary of how a health plan organization is structured. Most the images and ideas come from this presentation.

HealthScape_Health Plan Anatomy - Oct 2023 (3).pdf

At the highest level

Within growth & revenue management

• Sales and Distribution is how health plans acquire new members. A health plan will have a diversified sales and distribution strategy to help them reach a wide array of members depending on which lines of business that they operate in.
  • Each line of business will require slightly different sales and distribution tactics to reach members. For example, the Medicare Advantage population is sold via licensed brokers that are contracted with the plan.
• Encounter management: The handling of the receipt of service, particularly for plans that are administered on behalf of the government, that require data submission to CMS for review.
  • Encounter Collection: Encounters are submitted to the health plan once a member has received a service from a provider. The provider office creates the encounter as a “receipt of services” and sends it to the plan. Once the encounter arrives at the plan, it is processed through the encounter processing engine to adjudicate it.
  • Encounter Submission: Encounters are submitted by the plan to CMS at least one time per month
  • Encounter Response: Managing feedback from CMS to address gaps with submitted encounters
  • Encounter coming into the encounter management function usually come from a clearinghouse. They are dealing with encounters data, which the government uses for risk adjustment, auditing and compliance, and quality reporting, whereas claims data is primarily used for billing and reimbursement.
    • Encounters vs. claims data: While there is some overlap, particularly in the area of cost information, claims data is primarily financial and transaction-focused, detailing the reimbursement process, whereas encounter data is primarily clinical, focusing on the documentation and reporting of patient care.
• Risk adjustment: The process of adjusting payments based on members' health status and demographics to ensure adequate funding for high-risk patients. It involves capturing diagnosis codes, submitting data to CMS or state agencies, and analyzing risk scores to optimize revenue and compliance.
• Underwriting & actuarial: Helps determine which medical coverage to offer (e.g., what is included and excluded), how to calculate premium costs, etc.
• Product: Build insurance products for the customer (HMP, PPO, copays, covered services, etc.)

Within healthcare management

• Clinical management: Ensure that care is provided in an affordable way while maintaining quality, manage the overall health of the membership population, and engage with high-risk individuals
  • Utilization Management / Prior Authorization: The plan seeks to manage individuals who use care frequently to ensure that they are seeking care at the most appropriate sites of care (e.g., outpatient ambulatory service center versus an inpatient hospital stay) and require pre-approval for a service to be rendered.
  • Case Management: Personalized management of a member’s care journey by a qualified case manager (often a nurse)
  • Pharmacy: A separate team functions to manage the prescription formularies and prescription utilization. This is often managed by a third-party pharmacy benefit manager.
  • Behavioral Health: Provide specialized care for individuals experiencing mental health and substance abuse challenges
• Network management: The creation and maintenance of the individual providers and health systems that a health plan has contracted with to provide services to its members.

Within stakeholder services:

• Member experience: Customer support for patients