Regulatory Requirements and Reporting of Managed Care Organizations

Paper Type:  Critical thinking
Pages:  4
Wordcount:  879 Words
Date:  2021-06-17

The health care system needs the right management and control so that the public can enjoy the maximum benefits that will assist them in leading a comfortable life (Kongstvedt, 2012). Hence, the government through the different agencies ensures that they have regulatory measures that govern the financial reporting as well as the solvency for the different types of the managed care organizations (Cleverley, Cleverley, & Song, 2010). Their role is to ensure that people get quality care while visiting the local healthcare institutions. This paper will discuss two of the managed care programs namely the Health Maintenance Organization (HMO) and the Preferred Provider Organization (PPO). It will describe each of the agencies and the impact they have on the healthcare system as well as the different aspects of governance that each employs. A description chart will be used to make it easy to view the similarities and the differences between these two agencies.

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Characteristics Health Maintenance Organization (HMO) Preferred Provider Organization (PPO)

Description The HMO attempts to reduce the skyrocketing health care costs in the country and ensure that they are within the law requirements (Kongstvedt, 2012).

The HMO gives the members the ability to access different healthcare providers as well as facilities

Hence, it helps in the managed of the entire health care system and has the power to receive some form of developmental funds

The government recognizes the role they play in the health sector and provides them with an operating license PPO works with the various health insurance companies in the country and may also include the input of the third parties that help in the administration

It helps the holders to work with the preferred provider organizations that help in the management of their health care

They report to the department of health on the number of people using their services to maintain the quality care services

The government encourages more people to register with the PPO due to the diverse needs that the healthcare providers provide them both in the short-term and in the long-term (Cleverley, Cleverley, & Song, 2010). There is also the option of covering the emergency cases that patients may present in the hospitals.

Type of healthcare organization impacted

The HMOs influence the general healthcare providers. The management recognizes that the healthcare system is wide and the people in the country deserve the right kind of treatment options. It also helps create the confidence among the people on the relevance and reliability of the healthcare system (Shi & Singh, 2015).

In the recent past, most private healthcare practitioners are adopting the HMO so that their patients can enjoy the wide and diverse range of services provided by the entire health industry. Prior, only the patients with accessibility to the public hospitals accessed these services The PPO affects the general health care providers who offer their services to the public (Shi & Singh, 2015)

They earn their income through the excess amount charged to the insurance companies as they use their network in reaching more customers

Different aspects of its governance It has a copayment cost share aspect. This means that the holder makes the nominal repayments at the time they will receive the service (Cleverley, Cleverley, & Song, 2010).

Each member of the HMO gets a specific physician that provides him or her with the specialized care. This means that each time they need the healthcare services, they must adhere to the guidance and guidelines from the allocated physician (Shi & Singh, 2015).

However, the specialists from the public hospitals must do referrals to the HMO practitioner to prevent them from having a large workload

They also ensure that they meet the emergency services and cases of their members as and when required The PPO offers the co-payment opportunity

It has the co-insurance feature that ensures the insurance and the holder help each other in meeting part of the expenses

(Kongstvedt, 2012).The deductible feature means that the benefits paid are repaid in full and the holder enjoys all the profits

The deductible feature works before the co-insurance aspect can work

It is the least expensive cover and most people in the society are in a position to afford it comfortably

In conclusion, both HMO and PPO exist so that a large number of people can access the right form of medical care. They follow the regulatory requirements by the local government that ensures that there is a body on the ground to help in management of both the private and public health providers in the market (Cleverley, Cleverley, & Song, 2010). The interests of the consumer are put into consideration as they help them get more from the insurance health covers that serve them. it also gives them the confidence that irrespective of the health condition that any of them have, they will get the right kind of treatment. The managed care organizations also understand that need to maintain a healthy competition amongst them. Their priorities surround the comfort of the consumers (Shi & Singh, 2015). Hence, both the HMO and PPO existence in the market is an added advantage.


Cleverley, W. O., Cleverley, J. O., & Song, P. H. (2010). Essentials of health care finance. 6th edition Sudbury MA Jones & Bartlett Publishers.

Kongstvedt, P. R. (2012). Essentials of managed health care. Jones & Bartlett Publishers.Shi, L., & Singh, D. A. (2015). Essentials of the US health care system. Jones & Bartlett Publishers.

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Regulatory Requirements and Reporting of Managed Care Organizations. (2021, Jun 17). Retrieved from

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