For the purpose of this report, a broad definition of a managed care plan is employed. A managed care plan is defined as any plan that employs a network of participating providers and guarantees the provision of health benefits to a defined population for a fixed payment. There is a natural evolution and chronology to the model legislation's component parts. To enter the market, managed care plans must meet certain health plan standards in order to be licensed. The model legislation sets health plan standards, a state licensing process, and enforcement mechanisms for plans that do not comply.
Plans entering the market succeed or fail on the basis of enrollment.
The model legislation creates a state health care information system for the purpose of producing annual comparative reports on plan performance. Informed consumer choice guides plan selection and influences enrollment. Consumers enrolled in managed care plans are entitled to certain rights, none more important than the right to air complaints and appeal plan determinations. This is particularly important in the managed care setting because of the incentives of capitation and the potential for underservice. The model legislation establishes a comprehensive internal and external complaint and appeals system that protects the rights of enrollees to quality service and quality health care.