Medical Insurance Primer for Practice Staff

Do you know the difference between an IPO, PPO, EPO, HMO, etc.? A quick explanation and definition of each of the major insurance types will provide you a better understanding of how and what you are paid for your services.

1. HMO: Patients enrolled in a health maintenance organization (HMO) will need to receive most or all of healthcare from a network provider. HMOs require that patients select a primary-care physician (PCP) responsible for managing and coordinating all of your health care. PCPs serve as your personal doctor to provide all of your basic healthcare services. If patients need care from a specialist in the network, their PCP will have to provide a referral or authorization. If patients do not have a referral or choose to go to a doctor outside of the HMO's network, they will most likely have to pay all or most of the cost for that care. Patients are almost always required to obtain authorization to be seen.

2. PPO: A preferred provider organization (PPO) is a health plan that has contracts with a network of "preferred" providers from which patients can choose. Patients do not need to select a PCP and do not need referrals to see other providers in the network. If they receive care from a doctor in the preferred network, they are only responsible for annual deductible (a feature of some PPOs) and/or a copayment or coinsurance for the visit. If patients get health services from a doctor or hospital that is not in the preferred network (known as “going out of network”) they will be asked to pay a higher amount.

3. EPO: A more restrictive type of a PPO plan under which employees must use providers from the specified network of physicians and hospitals to receive coverage; there is no coverage for care received from a non- network provider except in an emergency situation.

4. POS: A POS plan is an "HMO/PPO" hybrid; sometimes referred to as an "open-ended" HMO when offered by an HMO. POS plans resemble HMOs for in-network services. Services received outside of the network are usually reimbursed in a manner similar to conventional indemnity plans (e.g., provider reimbursement based on a fee schedule or usual, customary and reasonable charges).

5. Medicare: Medicare is the federal health insurance program for people 65 years of age and older. There are some exceptions to this “65 and over” rule: people with disabilities, people with amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease), and people with end-stage renal disease (ESRD).

6. Medicare Advantage Plans: Formerly known as Medicare+ Choice Plans, Medicare Advantage plans include HMOs, PPOs, special needs plans (SNPs), private fee-for-service (PFFS) plans, and Medical Savings Account (MSA) plans. Private insurance companies offer these plans. To join, patients must continue to pay Part B premiums but receive all Medicare-covered benefits through the private plan chosen.

Print this out and leave it for your front- and back-office staff, or better yet, place it in your employee manual. It really does take the guesswork out of trying to understand all of the types of plans that are available!

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