Network Vs. PPO Insurance
There are several types of health plans out there, and understanding how they differ can help save consumers a lot of money when choosing a plan. Two of the most popular types of health insurance plans available are PPOs (preferred provider organizations) and HMOs (health maintenance organizations, also referred to as network insurance plans). These plans are designed around working directly with providers and are both managed care plans.
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Out-of-Network Coverage
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HMOs do not offer out-of-network care unless it is in the case of an emergency or if the care is not available in a reasonable distance in-network. In a PPO, patients can go out of network if they choose. If they do decide to go out of network, the patient will usually have to pay the doctor upfront and then the insurance will reimburse them after the patient has submitted a claim.
In-Network Coverage
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HMO plans contract with doctors and hospitals, and typically this is the exclusive list of doctors whom patients can see. In a PPO, the doctors the plan contracts with are simply considered "preferred" and cost less than "nonpreferred" (or out-of-network) doctors. When a patient sees an in-network provider, she usually pays a co-payment directly to the provider.
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Choosing a Doctor
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HMO patients must choose a primary care provider (PCP). The PCP acts as the main provider for all services and is the person the patient must go through in order to address all health care needs. In a PPO, a patient does not need to commit to a PCP.
Referrals to Specialists
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PPO patients typically never need a referral in order to see a specialist, at least not from the insurance company to cover. Sometimes the specialist may still require a medical doctor to refer the patient. Some particular services may require prior authorization for some plans.
In an HMO, patients always need to get a referral from a PCP before seeing any specialist. If they see a specialist without a referral, the plan may not pay for the visit.
Billing and Claims
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Patients in a PPO plan may have to file a claim if they decided to see an out-of-network provider. When a patient submits these claims, the PPO often does not pay these in full. The patient is responsible for the remainder of the bill and can be billed by the provider.
Because HMOs have contracts with all doctors that patients see, a patient will never have to file a claim. Providers and billing offices of providers must take care of filing all claims. Oftentimes, HMOs do not even accept claims from the patients. In-network providers will not bill a patient.
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