CARD T192
Health Maintenance Organization (HMO)
A health plan generally using a defined provider network and coordinated care. Out-of-network benefits are usually limited, with exceptions such as emergencies.
How it works
HMOs usually emphasize network care and coordination through a primary care provider. PCP selection and specialist referrals are common, though specific arrangements vary. Routine out-of-network care generally is not covered, while emergencies and other required exceptions can be. Prior authorization and a PCP referral are separate requirements. [10] [11]
A member obtains a required PCP referral before a network specialist visit. An emergency requires a different network analysis.
Use “generally” for HMO features; do not claim every HMO has identical referral rules.
Practice Health Maintenance Organization (HMO) · 3 questions
CARD T193
Preferred Provider Organization (PPO)
A health plan with contracted providers and typically some out-of-network coverage at higher cost. Members generally have greater provider choice.
How it works
PPOs generally cover both network care and some out-of-network care, with higher member costs outside the network. Members generally can see specialists without a PCP referral, though prior authorization may still apply. Out-of-network deductibles, coinsurance, and permissible balance billing can increase costs; legal protections may limit some charges. [10] [11]
A member visits an out-of-network specialist without a referral. The PPO may cover part of the allowed cost while applying less favorable out-of-network benefits.
No referral requirement does not mean no authorization, deductible, or network cost difference.
Practice Preferred Provider Organization (PPO) · 3 questions
CARD T194
Exclusive Provider Organization (EPO)
A plan generally covering care only through its network, except specified circumstances such as emergencies. Out-of-network routine care is usually not covered.
How it works
EPOs generally cover routine care only within their provider network. Emergency care and other legally required or contractual exceptions can be covered outside it. Many EPOs do not require specialist referrals, but the plan’s rules govern. An EPO’s network restriction does not automatically mean it has the same referral structure as every HMO. [10] [11]
A member voluntarily chooses a routine out-of-network appointment that has no exception. The EPO ordinarily does not pay simply because the provider is licensed.
Network restrictions and referral requirements are separate features.
Practice Exclusive Provider Organization (EPO) · 3 questions
CARD T195
Point-of-Service (POS) Plan
A plan combining managed-care features with an option for out-of-network care at higher cost. Referral requirements depend on the plan.
How it works
POS plans combine coordinated network care with an out-of-network option, usually at greater member cost. PCP referrals are a common feature, and benefits can depend on following the required route. Compare network, referral, and authorization rules separately; choosing out-of-network care does not eliminate deductibles or legal billing protections. [10] [11]
A member uses a PCP-directed network specialist for lower cost, or uses permitted out-of-network benefits with higher cost sharing.
POS combines features; it does not mean every service is paid equally wherever received.
APPLY THE TERMS
Practice questions
Select an answer, then check it to see why each option is right or wrong.
T192 · Health Maintenance Organization (HMO)
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T193 · Preferred Provider Organization (PPO)
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T194 · Exclusive Provider Organization (EPO)
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T195 · Point-of-Service (POS) Plan
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Sources & further reading
Original explanations and practice scenarios informed by the following regulatory, legal, and product resources. State examples are not presented as nationwide deadlines or requirements.