Medical expense policies differ in covered expenses, provider access, and how they organize care. This unit compares common plan structures and shows how multiple policies coordinate.
It also introduces utilization management, which means reviewing services against plan criteria. A provider network is the plan's contracted group of providers. Preauthorization is advance plan approval for a named service. Either may affect access or cost, but neither guarantees claim payment.
Learning path
- Medical Expense Policies and Managed Care: Basic and major-medical coverage and health maintenance organization (HMO), preferred provider organization (PPO), and point-of-service (POS) approaches to networks and referrals.
- Coordination of Benefits and Claims: Primary and secondary coverage; nonduplication, meaning prevention of duplicate reimbursement; coordination rules; subrogation, meaning insurer recovery from a responsible third party; and how claim records support payment.
- Cost Containment and Utilization Management: Preauthorization, concurrent and retrospective review, case management, and cost-containment tools; distinguish review from the final claim-payment decision.
Apply the unit
A family member has coverage through two plans and receives a service after an approval.
- Determine which plan is primary, how the secondary plan coordinates, what approved care means, and why the claim still must satisfy coverage and cost-sharing terms, which set the member's share of covered costs.
Study checkpoint
- Can you compare HMO, PPO, and POS access patterns?
- Can you apply the first governing rule to identify primary and secondary coverage, and separately recognize excess coverage that pays after specified base coverage?
- Can you explain why preauthorization is not a promise of payment?