Dr. George Goodman operates a small direct primary care officeout of Corona, Queens. His office staff consists of 4 individualswho handle all the administrative functions in the office such aschecking in and out patients, insurance and billing, etc. In directprimary care, providers are paid cash by patients for theirservices and do not contract with third-party payers forreimbursement. Dr. Goodman is now considering contracting with amanaged care organization (MCO) Metroplus, in order to participatein their Medicaid Managed Care Plan. He believes that contractingwith the managed care organization (MCO) will result in an influxof patients and thus, more revenues.
The Medicaid Managed Care plan under Metroplus, is a healthmaintenance organization (HMO) plan which follows the capitationmodel. Under capitation, Dr. Goodman will receive a per-member permonth payment for each of his patients that is enrolled in MedicaidManaged care. Moreover, an influx of patients may potentiallyresult in the need for more administrative support and an increasein supplies costs at the office.
Should Dr. Goodman contract with the MCO – Metroplus? Why or whynot?