Insurance Panels, Which Way is Up?

There are several different types of commercial insurance plans and its useful to know so you can help your clients navigate and you can anticpate what you will be paid since different types of plans can reimburse different rates.

An HMO (or “health maintenance organization”) requires the client to select a primary care physician (PCP) who acts as "gatekeeper." Think of the clients PCP as their personal health-quarterback, strategically coordinating all of their care and providing for their basic healthcare needs. If they ever need to see a specialist or require a diagnostic service (such as a blood test), they will need a referral from their PCP. Your referral will always be to a provider within your HMO network. If they choose to see a doctor outside of the network or without a referral, they will generally have to pay all costs out-of-pocket unless it is a true medical emergency or they have no other options. With an HMO, their physician network is local. These can often pay less even though you provide the same service.

A PPO (or “preferred provider organization”) is a health plan with a “preferred” network of providers in their area. They do not need to select a primary care physician and they do not need referrals to see a specialist. If they see a “preferred” (or “in-network”) provider, they will only be responsible for paying a portion of the bill (according to their plan's coverage structure). If they choose to see a doctor who is outside the preferred network, they will generally have to pay a larger portion of the bill than they would for an “in-network” provider, but most plans will still cover a portion of the bill. With a PPO, they will have access to out-of-state providers that are considered in-network. These plans often reimburse at a higher rate.

An EPO (or “exclusive provider organization”) is a bit like a hybrid of an HMO and a PPO. EPOs generally offer a little more flexibility than an HMO and are generally a bit less pricey than a PPO. Like a PPO, they do not need a referral to get care from a specialist. But like an HMO, they are responsible for paying out-of-pocket if they seek care from a doctor outside your plan's network. An EPO is a good option if they want to see specialists without a PCP referral within your network. These plans are almost always high deductible plans.

A POS (or "point of service”) plan is also a hybrid of an HMO and PPO plan. Like an HMO, they will need a referral from their PCP in order to see a specialist. But, like a PPO plan, they will pay less if you use doctors, hospitals, and other healthcare providers in the plan’s network, and they will have access to out-of-network providers at an increased cost. Similar reimbursement process as EPO’s.