What Is a Managed Care Organization (MCO)?

Melissa Whetzel
nurse seeing child and adult patients

What does MCO Stand for in healthcare?
MCO stands for Managed Care Organization. MCO is an organization or group that helps provide acute healthcare. In risk-based management of care, it is vital comprehensive care that is focused on limiting costs while maintaining the high standards of the healthcare plan.

What is a managed care organization?

A managed care organization (MCO) is a company that is finding ways to create valuable healthcare with accessible and affordable prices. Common MCOs include health maintenance organizations (HMOs), point of service (POS) organizations, and preferred provider organizations (PPOs).

What does a managed care organization do?

A managed care organization may include a healthcare maintenance organization with a carefully outlined plan for affordable healthcare. MCOs influence healthcare organizations and have a track record of improving outcomes which, along with providing cost-effective management, has lead to their popularity and expansion.

Managed care organizations provide:

  • A primary care provider – A MCO will seek out local options that provide a way to manage the care that a patient will be receiving. The goal of the MCO is to find the most affordable healthcare for the patient.
  • A provider grapevine – A MCO helps to create a network that partners with groups that aim to find the best possible accessible care. They could partner with primary care providers, hospitals, specialists, laboratories, or any other kind of healthcare entity.
  • Financial incentives – MCOs provide financial incentives which give providers a financial stake to encourage following the MCO’s health care plan.
  • Prescription drug tiers – Managed care plans find ways through prescription plans (part of the greater health care plans) that find cost-savings on prescriptions. The name-brand prescriptions are often expensive. However, compared to the lower-cost generic brand, they get the same job done as they are often the same formula.
  • Prior Authorizations – There are a lot of prescriptions or procedures that are performed that are often not needed. A managed care organization needs to authorize all prescriptions and procedures beforehand to ensure that they are necessary, reducing costs.
  • Preventative Car – To cut costs and protect MCO participants, it is essential to take preventative measures. Health issues caught at an early stage tend to be less costly. This includes annual checkups with a primary care provider, screenings, and some vaccinations. Someone in good health will have a less costly bill than someone who does not take preventive measures for their health.

A Managed Care Organization is one that is a valuable resource for accessible health care that takes a personable approach to laying out a health care plan.

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