Managed Care Organization (MCO)
A Managed Care Organization (MCO) is a health plan that delivers benefits through contracted provider networks while managing cost and utilization, including HMOs and PPOs. ASCs negotiate participation and rates with MCOs, whose authorization rules directly affect scheduling and revenue cycle outcomes.
What is a managed care organization (MCO)?
A managed care organization (MCO) is a health plan that delivers covered benefits through a contracted network of providers while actively managing cost and utilization. Health maintenance organizations and preferred provider organizations are common types of MCOs.
MCOs use tools such as provider networks, prior authorization, and care coordination to guide how and where members receive services. In many states, Medicaid programs also contract with MCOs to administer benefits for enrolled populations.
What role does a managed care organization (MCO) play in the revenue cycle?
Ambulatory surgery centers negotiate participation agreements and payment rates with MCOs, and those contracts determine much of the facility's reimbursement. The terms can vary considerably from one organization to another, which makes contract management a core revenue-cycle responsibility.
An MCO's authorization and medical-necessity rules also drive scheduling and claim outcomes. Verifying eligibility and securing the right authorizations up front is essential, since the organization's requirements directly affect whether a clean claim is ultimately paid.
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