Additional Contractual Terms
Additional dimensions can be defined on the basis of intrusiveness of oversight of physician practice, and whether the physician is forced to assume some of the risks of insurance. Contractual arrangements vary from situations in which a physician group agrees to treat the MCO’s patients for a set fee schedule, to situations in which there is a total capitation where physicians agree to assume the insurance risks for a panel of patients. MCO involvement in monitoring medical decision making may be minimal, but more often it involves a very intrusive review of all medical decisions that involve procedures, pharmaceuticals, or hospitalization—anything that costs extra. Enforcement mechanisms in these types of contracts may involve a pure financial incentive scheme, or the group may face contract termination for violating established norms.