Managed care organization liabilities.

ABSTRACT

While certain efficiencies and cost savings have been achieved, Managed Care Organizations (MCOs) have risk exposures never before considered. MCOs provide a number of services for their clients. Specifically, they are involved in credentialing, network development, utilization review, and the hiring and firing of physicians and other allied medical professionals subject to rather complex and detailed contractual arrangements. The insurance industry has responded to the increase in claim exposure associated with the aforementioned activities by providing any number of insurance products. Depending on the insurance provider, a number of different coverages are available. The final decision as to which coverage to purchase will be governed by the risks associated with a particular MCO, contractual protections, available cash flow, protections under federal and state laws. The point of this article is to apprise MCOs of the claims now starting to develop against MCOs as well as alternative insurance products that can be purchased in order to protect both the firm's assets as well as those of individual directors and officers.