Which term best describes insurance plans where the insurer and healthcare provider have a contractual agreement to minimize costs?

The term that best describes insurance plans where the insurer and healthcare provider have a contractual agreement to minimize costs is Managed Care Organizations (MCOs). MCOs are designed to reduce healthcare costs while maintaining quality of care through various strategies, such as negotiated discounts with healthcare providers and coordinated care among different services.

MCOs involve a network of providers who agree to offer services at reduced rates in return for a steady stream of patients from the insurance plan. This structure promotes preventative care and efficient service utilization, as providers are incentivized to keep costs low while ensuring that patients receive necessary treatment. The arrangement often includes limiting the choice of providers to those within the MCO’s network, which helps in controlling costs and enhancing the quality of care delivered.

In contrast, other options like fee-for-service plans allow providers to charge fees for each service rendered without the same level of cost control or network restrictions. Exclusive Provider Organizations (EPOs) are a type of managed care plan but typically do not offer out-of-network coverage, which is a specific aspect of MCOs. Indemnity plans operate on a more traditional model, where patients can choose their providers without in-network restrictions but also lack the cost containment strategies that characterize MCOs. Thus, M