PPO

What is a PPO and how is it different from an HMO?

A Preferred Provider Organization (PPO) offers the option of obtaining services from a network or non-network provider. Each time a participant accesses care under a PPO, the choice to obtain that care in- or out- of the network must be made. Typically, PPO participants are required to meet applicable deductibles and pay coinsurance equal to a percentage of the cost of the care rendered to them.

A Deductible is a flat dollar amount (usually $250, $500 or $1,000) that participants pay toward the cost of their care before an insurance carrier begins paying a benefit. Typically, deductibles must be met annually. Coinsurance is usually reflected as a percentage (10%, 20%, 30%, etc.). Under a typical PPO, participants are responsible for this percentage of the cost of the services rendered to them. Usually, this payment is made directly to the provider. Some PPO plans include physician office visit copays ($5, $10, $15, etc.), which allow participants to obtain standard office visit services without first meeting applicable deductibles and without the additional expense of coinsurance.

Unlike a typical HMO, most PPOs do not include a PCP/Gatekeeper feature. Most PPOs require that participants meet applicable deductibles and pay some form of coinsurance. By contrast, most HMOs do not include either deductibles or coinsurance thereby reducing the cost of medical care to the participant. Many consider the additional expense they encounter as participants in a PPO a fair trade for the additional freedom of choice available to participants in a typical PPO.

What does UCR mean and how does it affect my plan?

If your medical plan includes a non-network option, then UCR limitations are more than likely built in. Regardless of whether your plan is a EPO, POS, PPO or Indemnity, if you obtain services from a non-network provider you will encounter UCR.

UCR refers to Usual, Customary and Reasonable payment limitations imposed by insurance carriers on non-network service charges. UCRs are typically expressed as a percentage. UCRs govern and limit the fee an insurance carrier is willing to honor for services rendered and, as a percentage, reflect the number of providers in a given locale that are charging at or below the established UCR.

What is managed care and how does it impact my medical plan?

One thing most medical plans have in common is "Managed Care". This includes not only HMOs, but most EPO, POS, PPO and Indemnity plans too. The term managed care refers to cost containment features imposed by insurance carriers, by a medical group, or by a State or Federal legislative body. Most plan participants encounter managed care in the form of:

pre-authorization requirements imposed on surgical and other services;
limits on the number of visits available for certain services such as physical therapy, out-patient counseling and chiropractic;
limits on the dollar amounts an insurance carrier will pay for certain services;
penalties for the inappropriate use of an emergency room and other emergency service;
the use of Primary Care Physicians (PCP)/Gatekeepers; and/or
capitation.

Managed care features are specific to a plan and insurance carrier so you may encounter other forms of managed care. The impact of managed care on you will be specific to your plan and personal circumstances.

How do I find out if my doctor is in the PPO network?

There are several ways to determine if your doctor is in your health plan’s network. The best way is to consult the insurance carriers’ online provider directory. Provider directories can be found at most insurance carrier’s home website addresses. The provider directory found there is the most current reliable information. Website links to many insurance carriers can be found in the links section of this website. You may also contact your doctor’s office or your insurance carrier’s Member Services department.