Evaluation of Provider Service Network (PSN)

Continuing increases in the cost of medical care threaten the viability of Medicaid programs. Many states have responded with cost-containment initiatives. In Florida, the Provider Service Network (PSN) demonstration project is based on a model in which a provider organization, or network of organizations, provides care to a defined population and also agrees to perform associated "insurance" functions, such as enrollee services, provider credentialing, claims processing, and quality assurance. The concept is built on an assumption that health care costs can be contained when money flows directly from payer to provider, removing the insurance "middle man" from the transaction.

Florida's PSN uses a fee-for-service approach, with established payment limits and a linkage between payments and quality of care on a series of performance indicators. Additionally, the pilot program required implementation of disease state management programs in order to control costs and enhance outcomes for those patients with predictably expensive conditions.

Agency Contact: Mel Chang

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